Hey YouTube, Alex here and in today's video I want to answer the question, why don't wealthy countries want expat retirees?
And for this topic, it's going to be obvious to a lot of people, but there's also going to be a lot of people that have been wondering about this.
I've had people suggest, why don't I retire uh in Singapore or Japan or the United States?
and I thought I'd discuss why these aren't really realistic options for all but the most extreme scenarios.
So let's go ahead and get into it.
So reason number one is limited economic contribution.
So for these developed countries that have aging populations then they want people who are going to come and actually fulfill uh some kind of economic need.
So they're in their prime working years.
They're going to do something that the local people cannot do, right?
They might be a really specialized engineer.
They might be a really special medical professional.
They might be a tech founder.
They might have something really special.
And for most retired people, uh, this just isn't the case.
Most people by definition when they're retiring are no longer basically in the position where they're at their maximum economic potential.
Many cases they are not able to do a lot of jobs.
Let's just set aside the work permit issue where in these countries particularly in East Asia, not so much in the United States, but you have to have a work permit.
You can't just I'm going to go over here.
I'm just going to start working and it's going to be fine.
you have to actually get permission signed off by uh the government to be allowed to work and uh there's penalties for those who don't comply.
So um it's not so much that they don't want expat retirees, it's more so that's they're actually seeking out people who are going to come and work.
Um young students for example like hey you can come and study here with the idea being you'll fill a role we really need.
Maybe they'll study engineering or medicine and then they'll work throughout the course of their lives in that country and they'll contribute a lot.
They might buy a house.
They might start a family.
The lifetime value of a student, for example, is much greater than an expat retiree who's on a fixed income isn't likely to get some bonus check to go buy a new car or um invent some kind of new service or business that hasn't been done before.
um that really creates value at scale.
They're not going to even go for these convenience store jobs.
I if I'm retired, am I going to be working uh the midnight shift at 7-Eleven?
Probably not.
Um that's just probably not realistic because I think most retired people are starting to become more health conscience conscious.
They're becoming more aware of, oh man, I really need a good night's sleep.
uh they may need extra rest than say a young or middle-aged person.
Um they're not the what's the word?
They're not necessarily drivers of economic growth.
I think that's why you see economies that have advanced populations kind of stagnating economically.
Italy is a prime example of this but you even see this to some extent in the west in general uh where there are just fewer uh working age people as a percentage of the population and of those people there's a finite number of people who are in engineering medicine um you know the legal field etc uh such that it's just um you know moving into my Second point here, I that's a good segue.
High health care costs.
So, it's very expensive to take care of an aging population and they don't want to add to that.
It's I mean, it's kind of obvious if you're somebody who uh you're in a country that doesn't have great health care system or it's cost prohibitive.
Oh, I'll just move to this country where health care is cheaper, especially when I'm older and it's expensive.
That's a no-brainer.
Well, those countries have figured that out.
Scandinavian countries, Japan, Singapore, it's not uh lost on them that this is particularly advantageous to people who don't have these benefits in their home country.
And they're not going to just, oh yeah, you know, work your whole life in the US or work your whole life uh in Canada or Australia.
uh create a bunch of economic output for them, pay a bunch of taxes, and then when you're done and you're not satisfied with um their version of Medicare or their version of healthcare, oh, just come over here and we'll take care of you.
No problem.
We didn't get any of the benefit of your output.
Uh but sure, we'll we'll uh give you a lot of input.
That just doesn't make any sense.
As a person gets older, they're more likely to have different kinds of health concerns, whether it be heart disease, cancer, and these are expensive to treat.
The medication, the surgeries, um ongoing treatment costs, recovering uh from these treatments.
Um you know, it's not cheap to take care of people.
Healthc care is 18% of US GDP roughly speaking right now.
I suspect that's probably going to increase with the aging population.
And these other countries that are very developed, they tend to have educated populations that can calculate out, well, we estimate, it's often underestimated in any country, uh, that it's going to cost us this amount per person to take care of them.
And so, they're not going to just, oh, yeah, it's cool.
I mean, you don't see the US, as far as I know, Singapore or Japan, um, having retirement visas.
Why do they not have retirement visas?
Well, that's not the the demographic that they want uh entering their country.
They're trying to focus on taking care of their own people that actually paid into the system their whole lives, paid taxes, built businesses, worked for other people to create a lot of value.
And it just doesn't really make sense for them.
Oh yeah, we're going to pay for a hospital.
We're going to build expat hospitals or we just give this treatment.
If you're wealthy enough that you could consider moving to one of those countries, you're wealthy enough to afford health insurance in your home country.
Um, this is why the expat retirey countries tend to be uh at basically you tend to go down the ladder when you're looking to retire on a budget.
You're you're not going up the ladder in terms of development.
You're you're going to a country that is less developed because the costs are going to be less.
It's not that those countries are bad.
There's quite a few developing countries that I enjoy spending time in.
Uh but to say that, you know, you're um you're going to go for something more developed.
Those countries that are more developed are more developed for a reason.
It's not just arbitrary or random that they're able to provide highquality services.
They're able to take care of their people.
These are very conscious decisions that those countries have made and they don't, you know, there's the exclusivity factor, right?
It's like, why is it nice to shop at a high-end grocery store?
Part of the reason for that is because not everybody can afford to shop at a high-end grocery store.
I personally go for budget groceries myself, but I could understand why somebody would want to go to an exclusive country club, drive exclusive car uh brand, live in an exclusive neighborhood, uh because they're just a better experience for many different reasons.
Um it's the same thing with healthcare.
It's like, okay, so we're going to take on all these retirement age people from other countries where the people are not as healthy.
United States is, I would not say, the healthiest country.
There's pockets like if you're in Southern California, you're in Colorado, you're maybe South Beach, Miami area, you're talking about very healthy, wealthy populations, but not representative as of the US as a whole.
And so these countries that have great health care systems, you could say singlepayer health care systems, uh they're focusing on taking care of their own people.
They're not thinking about how to save the world.
Uh they're thinking about how to take care of the people who have made those places what they are.
And I don't blame them.
I certainly don't blame Japan, Singapore.
I gout Taiwan has a retirement visa or if it does, it's probably really restrictive.
I've even seen in some countries that are more middle of the road where they've actually increased the retirement visa requirements.
So, they've actually uh seen some of the challenges in other countries that have tried to implement retirement visas.
I think Portugal or Spain come to mind and they're thinking, "Wow, well, we want to we want to address that before it becomes an issue here." And so, we'll make it more expensive.
We'll make it harder to get and we'll limit the numbers.
We're not expanding the program.
We're shrinking it.
And I'm sure some of these countries once they get to a certain point, they'll close the programs and basically really restrict it to where you have to have an even higher income to where it's cost prohibitive for most people.
And even then they may have stipulations like hey you've got to budget for uh health insurance and you've got to demonstrate this ability to where you can afford very very expensive health insurance for um for the rest of your life because we don't want to burden our people with the bills for your health care.
It just doesn't make any sense when you know I think that's what what you notice in Scandinavia.
uh you notice in East Asia, you can't just get up and move there to to many of these countries.
It's very difficult, expensive process.
In some cases, it requires you to learn the language and test at a like a native level or near native level.
Uh you have to demonstrate some unique skill that doesn't exist there very much.
uh and you you know it's not it's not for it's not open for everybody or everybody would do that like oh I can just go over there and they'll feed me and house me and put me up in a hospital anytime I want.
Um that's why these places are not retirement destinations.
People are retiring from those countries to cheaper countries or countries uh earlier in development stages rather than the reverse.
Um number three would be housing pressure.
A lot of these developed countries have a lot of pressure on the housing supply.
Um, especially like Singapore, I use Singapore a lot as an example.
I'm a fan of Singapore, but except for like when it comes to private housing, like non Singaporean housing, it's very cost prohibitive.
Look up the costs of apartments.
I think the most economical area in Singapore where you could buy a condo is near Changi Airport.
And you're talking at least half a million dollars to buy a condo there.
Um, and that's probably a modestized condo.
Uh, in some cases designed for like say business people that maybe they come to Singapore to do business.
Uh, the more desirable parts of Singapore, you're getting easily over a million dollars into the multiple millions of dollars to purchase a private house.
They do have public housing, but that public housing is not just, oh, anybody that wants to visit Singapore.
Oh, you know what?
You can just stay and you can live in the public housing.
It's restricted to citizens.
Singaporean citizenship is not only the most one of the most powerful citizenships in the world, but it's also very difficult to get.
It's not something that they just give out.
There's a lot of restrictions.
I don't blame them at all for that.
That's just what they've decided makes sense.
Um, but they're not looking to increase pressure on their housing stock.
It's very desirable.
It's a very desirable place to live.
A lot of people would really like to live in Singapore.
they have no shortage of people that want to live there and I don't see that changing in the immediate future.
Um, so you know, Japan is similar.
A lot of people talk about cheap housing.
The only real cheap housing in Japan is out in the middle of nowhere.
If you want to live in the places that most people want to live, it's cost prohibitive.
It's expensive.
I wouldn't say it's as expensive as the US um, for various reasons I'm not going to get into in this video, but it's not cheap.
If you want to live in a nice part of Tokyo, you want to have a decent sized place.
Uh once again, it might be cheap compared to some American cities, but by global standards, it's not cheap.
Um and so yeah, housing pressure is a big one.
There's I think post08 in a number of countries, the United States especially, but and other countries as well, there was this lack of housing construction for a long time.
And basically demand came back but housing construction did not keep up with demand.
And so we're seeing in quite a few countries rents are very very high in some cases dramatically outpacing local wage growth.
You see this in Portugal, you see this in Spain and it's actually leading to protests.
I think you see it in Mexico as well where people are saying, you know, all these expats are coming in here and bidding up the price of housing.
uh but the local people's wages aren't going up in line with that increased cost of housing.
And so there's a lot of backlash even in countries that by global standards are are somewhat wealthy like Portugal and Spain.
Uh but you know even in Mexico that's arguably at a well not arguably most people would say is at a lower level development than US on average.
Uh even there there's backlash against expats.
So I think some things will change in some of these places but particularly uh when it comes to housing pressures it's like okay so we don't have enough housing for the people that actually work and make things function and we don't have enough housing for the people here from here who paid into the system.
So, we're just going to add to the challenge by bringing in people from other countries who never paid into the system, who are not in their prime working years generating a lot of economic activity, who are on limited budgets, where they're budget conscious.
They're not going to uh get any more promotions.
They're not going to increase their income dramatically anymore.
They're at a point where they're um you know, they're they're like third or fourth in line in a lot of these places.
Uh number four would be and this goes back to limited economic uh you know output is a lot of these developed countries are looking for people to either work to innovate or to fill labor shortages.
So if the retiree has no plans to work, they can't get a work permit but even if they could they don't intend on it.
uh they're not at a stage where they're innovating because typically innovation comes from young uh people who are really studied a lot of engineering at a from a young age and they're really in their prime energy and prime output years.
Uh and then they can't fill a labor shortage.
So they're thinking, well, you know, even if I wanted to work, do I want to work at a convenience store?
No, probably not.
Most people, if they have education or skill set, they've got a trade, they would prefer not to work at a convenience store, regardless of what country that's in, even if they could get a permit.
Um, so they're not really filling what these countries want uh in terms of people, in terms of um what their economies need.
their economies don't need any more people actually uh needing health care, needing a pension, uh needing and that'll be the fifth and last point I get into, but um basically trying to draw more than what they're putting in.
And the fifth one is going to be pension sustainability.
And a lot of these countries have these pension programs that are not sustainable.
They were designed and the projections were assuming a shorter lifespan and now lifespans have increased to where people are taking out far more than they ever paid in.
And so now a lot of governments have caught on to this like oh wow we thought they were going to you know draw like social security is a prime example.
We thought they might draw for 10 years.
There's people that have been drawing social security uh like my grandmother for over 30 years.
She's been drawing social security far more than what she actually paid in.
And a lot of countries are in this position.
I mean, you see this in Japan where some senior citizens are actually uh because they're in such a budget hardship, they're committing crime to be able to go to a incarceration situation where their basic needs are covered.
I'm not saying this is widespread or happening everywhere, but it has made the news in Japan and international news to some extent as well.
And so for them, it's like, okay, you're going to come here and you're going to want healthcare and you're going to want uh to withdraw from a pension.
And then people might say, oh no, I'm not going to take from the pension.
It's like, well, how much how much resources do you have?
Well, I'm I'm really wealthy.
people.
It's like well there there's too much risk basically in accepting retired populations for the more developed countries.
The cost of health care, the demand on their health care systems, the pension systems.
um their their thinking is look, if you're from a develop if you're from an undeveloped country, you better be really really wealthy to be able to get citizenship at an early enough age where you can make a meaningful impact on the economy.
And if you're from a developed country, why would you want to like retire here anyway?
I mean, whatever situation you've got back home uh is probably going to be better.
And even if it's not, you're not a refugee, right?
like you're not if you can realistically budget for another developed country, you're not an econ you're not an economic scarcity versus somebody who wants to go to a lowerc cost country.
They probably are coming from a position of scarcity.
They probably are, look, I can't afford to live in my home country anymore.
Um, I need goods and services that I can't afford back home.
And this uh country with lower rents, lower food costs, lower transportation costs is going to make a lot more sense for me.
And um these countries, they have they're more likely to have like an excess supply of labor.
So they've got people who need jobs or need work uh but can't find it.
Maybe they have underemployment.
Oh yeah.
Well, if we get this community of expats in our country, they're going to be going to restaurants more.
They're going to be hiring more house cleaners.
They're going to be uh hiring more cab drivers.
They're going to be paying more visa fees.
They're actually like a net positive for our goals and what we need for our level of development.
Uh versus those countries where it's like, well, you're you're not really what we're looking for.
Um so, yeah.
Anyway, this video has just been kind of broad, but I just thought why don't I discuss why these wealthy countries typically don't offer retirement visas.
Um, why they're not seeking out retirees.
You got to look at the demographic pyramid, the structure of their population.
They need uh young people to come and contribute, not retired people to come and relax.
This isn't an anti-retired people kind of thing.
just kind of explaining why most expat retirees are picking the places that they're picking.
Are there exceptions?
Sure.
I'm sure there's some investors that are very very wellto-do, but I'd say probably most of those have a long history of being an expat.
Like they moved to work in Singapore or Japan decades ago and they built a life there.
They have family there.
It's uh you know, for whatever reason they're not doing a marriage visa.
It's not just I'm going to retire there.
So, uh, let me know what you think down in the comments below.
Have you thought about, uh, this topic?
Is this redundant to you or obvious to you?
Maybe it's not.
It always helps to have an interesting discussion.
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