Bill, you have to explain your definition of retirement first as the islands are different for living.
Price differences, if any, dont matter because they are going up everyday.Does it matter if Penang is cheaper than Langkawi today if Penang has 30% inflation this year and becomes higher than Langkawi?
Over my 15 years here prices for things I measure are up 400-500%. Used to be Malaysia was really about 1/4 of US prices, now many US prices are cheaper than Malaysia. In terms of raw dollars, housing has had the greatest increases. Many things I dont buy anymore because they are too expensive now. And this is only the beginning.
Langkawi would be isolated, without full services and goods. On the other hand Penang itself is isolated from KL and has less, whether one lives on the island or mainland side.
When I came to Malaysia in 2000, I didnt know how to drive. I went to Langkawi, rented a Proton Saga for RM20 a day and taught myself. I have a too-long story to tell about the trip but to keep it simple, I was almost alone on the island. Every night I would drive to town, buy dirt-cheap liquor from duty-free and go to the beach where I could yell and scream and run around naked and drunk and nobody was the wiser. Now its expensive, crowded, developed and ruined. That time, I may have liked the idea of retirement there but not anymore.
I have lived in Penang for the past three years and pretty much hate it and therefore i personally cant imagine retiring to either place. Used to be that Penang had the best food in the country but not now. The old cooks are all dead and gone and the kids didnt want to continue the tradition or the business, so now the food is crappy. Prices are waaaay up, roads are jammed and full of un-fixed potholes, services remain unmatured, medical is not the greatest, there is no public transportation system like KL, list goes on and on.
You and I may not measure by the same yardstick. I know plenty of people who are happy as a clam in Penang, and I know others who didnt even last two years in Malaysia before they ran out of here. I cant say whats good for any one person, youd have to spend time in both places and decide for yourself.
Before I actually got an address in Malaysia i made 3 trips of 3 months each. And I wasted those trips by not first having a list of things and were truly important and then running them down one by one and thinking hard and objectively to reach a informed decision. I made decisions based on the wrong criteria and I sure paid for it later. So thats what im suggesting to you, make a firm list of what you are looking for and must have and if the list doesnt pan out, then stay out. If it does pan out, its possible either place could become your paradise.