Expatriate Retirement

As expatriates we're in a privileged position that enables us to utilise highly flexible savings and investment schemes for our retirement savings, we're able to benefit from every taxation advantage that presents itself and often we're able to save far more than our peers back home.

Many of us continue to push the thought of retirement planning to the very back of our minds because we’re reluctant to save for an event that seems so far off, reluctant to tie in to an inflexible pension scheme and reluctant to put a large portion of our current income out of reach for the long term.

But as expatriates we’re in a privileged position that enables us to utilise highly flexible savings and investment schemes for our retirement savings, we’re able to benefit from every taxation advantage that presents itself and often we’re able to save far more than our peers back home.

Add to that the fact that in terms of expatriate retirement planning, putting off until tomorrow that which you could get done today will end up costing you very dearly and you’ll begin to realise how important it is to get a properly structured plan in place.

Firstly, let’s dispel those popular retirement myths

i) I’m far too young to worry about my retirement…

Every single month you delay your retirement savings planning you significantly increase the amount that you will need to invest to achieve the same level of retirement income than if you’d started today!

Fact - if a twenty five year old and a thirty five year old started saving today for their retirement at fifty five and the twenty five year old was investing £300 a month towards retirement, then the thirty five year old would have to raise his contribution to £803 a month to achieve exactly the same potential returns.

ii) I can rely on the State pension…

If you’re not continuing to pay towards your State retirement scheme whilst an expatriate this will reduce or even wipe out any entitlement you had.  And did you know that State pension schemes are not funded; they’re simply paid out each month based on the money the Government collects in taxes that month?  Over the coming years the workforce worldwide will get smaller and at the same time we are set to live longer meaning there will be far fewer workers to fund an ever increasing number of State pensions by the time you come to retire.  This makes the whole scheme unworkable and makes it ever more likely that future governments will reduce or even stop state retirement benefits altogether, so, do you really want to rely on the State? 

iii) I’m a married woman and I can rely on my husband’s pension…

On average one marriage in two ends in divorce so how can a woman be sure that she can rely on her husband to support her throughout life?  Also, a woman has a right to financial independence - but still only around 20% of all women receive a pension adequate enough to support them meaning most women approach retirement without any sort of financial security.  So, not only are woman’s earnings on average less than a man’s, their pension benefits are lower as well and yet women live on average longer than their male counterparts, retire earlier, are less likely to have a company or private pension scheme and will basically have to survive longer on less money!

A dire situation indeed, and one that must not continue...ladies, it’s time to take action for yourself and you need to do it today!

Now, let’s examine some unpopular facts about retirement.

The average person will spend up to 30% of their life retired; this means they will need to have built up a significant sum of money during their working life to support themselves throughout retirement.  However, industry figures show that people aged between 25 and 44 are saving only around a third of the amount they should be to fund their retirement. 

Expatriate Retirement Planning

As an expatriate you’re in a privileged position.  You’re possibly earning a higher salary, have a lower cost of living, reduced taxes, have greater freedom when it comes to available investments, and are not necessarily restricted by the same regulations that domestic investors suffer. 

Therefore you should make the very most of your circumstances today to benefit you financially in the future.

Here’s what you need to be aware of: -

Your personal situation and circumstances are unique, therefore it is not a case of being able to suggest one savings plan to suit every expatriate.  You need to plan your retirement savings carefully and take advice on the best offshore opportunities to suit your planning objectives.

You should be realistic about contribution levels.

Examine the charges, bonuses and flexibility of any expatriate retirement plan.

Be advised that a good offshore retirement plan usually allows for the following, penalty free:-

1 Contribution reduction.
2 Switching investments between funds.
3 Flexible retirement date.
4 Allows certain access to monies already invested.

Finding the right expatriate retirement solution

Consider seeking professional independent financial advice to get the right solution - saving you time and money and reducing your cost of delay.

And remember, if you already have a UK or onshore pension when you expatriate, cashing these policies in is seldom the best option available to you whether you want to take the offshore advantage for your future retirement savings or not.  Instead of encashment you must to speak to an independent financial brokerage to find out what options are available to you and which options are best for you.  You do not have to speak to the adviser or brokerage who set up the initial policy for advice - a good independent financial adviser will be happy to assist you with any previous policies.

And finally, as an expatriate you’re in a superior position when it comes to retirement planning, saving and investing.  Make the most of the options available to you while you can and secure your financial future, click here to let us assist you.