For the majority of clients that I speak to, planning for their own retirement is pretty much at the bottom of the list; behind buying that sports car they’ve always wanted and that dream trip to the Maldives. And who can blame them? retirement for some is 20+ years away for some of my clients, why do they need to think about retirement now? There’s plenty of time to think about that.
In my eight years of giving financial advice, I would say the average age of a client when the retirement penny drops is 50. This is when they realise that retirement is fast approaching, and when many people say they would like to retire, if only they had thought about it earlier.
In the UK, Europe, USA, and the like, contributing to a pension is standard procedure, almost second nature. In my home country of England, you are automatically enrolled into the governments state pension when you begin your working career. More recently, it has also become compulsory to contribute to the new workplace pension – with monthly contributions starting at £20.
The basic concept of retirement planning is simple. Put a small amount of your salary away each month, and over time this builds up to give you your retirement pot.
So why, when we decide to become expatriates, does this simple idea of putting small sums of money aside each month get lost by the wayside?
In Dubai, its pretty simple. Dubai Mall, Barasti, Saffron brunch. There are almost endless ways to enjoy your hard earned income.
The trick is finding the balance between enjoying all that the expat lifestyle has to offer, and planning for the future.
On average, 20% of a clients monthly income should go towards longer term financial goals, such as life insurance, retirement, their kids future.
Of course, it all depends on the individual. Those wishing to retire on six figure incomes will need to save more than those more modest individuals. Clients with alternative investments, such as property, may need to save less than clients with nothing.
Taking advice from a fully qualified financial professional should always be the first step.
When I ask clients at what age they would like to retire? The answer is usually “tomorrow!”.
This doesn’t have to be a light hearted joke. If planned properly, it is more than achievable to retire in your 30’s.
Don’t believe me? Follow the below link to read the amazing story of how a couple saved USD1,000,000 and retired in their 30’s.
They certainly chose pension over Porsche.
To find out how to plan sufficiently for your retirement:
- Twitter: CKADVISOR
- LinkedIn: Chris Keeling DipFA CeSRE