Retirement planning? I am only young..
The population generally is fitter and healthier than ever before and have the potential to work long into their Sixties. There is also a widespread disinclination to save for the long term so the problem of retirement provision for international workers inevitably escalates.
It is the sole responsibility of an expat worker to provide for his or her retirement. No-one is going to do it for them.
A failure to save during what is probably the most productive and financially rewarding period in any career, means inevitably that a bleak lifestyle awaits you in retirement.
Around the world, it is the norm for expats to earn a tax-free salary and receive an end of service benefit, equivalent to a lump sum payout of one month’s salary for each year of employment. However, it is extremely unusual for employers to make any sort of provision towards an employee’s pension plan. It is therefore absolutely essential to set aside a portion of income from the very outset of any employment contract – no matter what your age, no matter what your circumstances.
The good news is, that by planning early, you will not necessarily have to forfeit very much and regular and longterm saving will not make a noticeable dent in your lifestyle. The key to all of this is to take advantage of the myriad regular savings, pensions and investment products which are specifically designed for the international market.
In conjunction with other assets, the most reliable way to take control over future pension provision is to apportion a comfortable amount of any surplus income each month and invest in a flexible, long-term investment plan. This diversifies your savings across a range of geographies and asset classes such as equities, property, alternative investments, bonds and commodities. This method of saving for retirement can not only be managed in line with your own risk profile and changing circumstances, it offers a better way of making sure your savings are not eaten away by inflation. It also helps avoid the need to boost retirement plan shortfalls, often when you can least afford to.
Further considerations include choosing a plan which is flexible. The large majority of investment plans will have an Initial Contribution Period (ICP) which must be paid. After this time, changes can be made to the level of contributions. A ‘payment holiday’ is also favourable. This is advantageous if you are between employment contracts and are thus unburdened by payments during this time.
Finally, ensure that your chosen plan is geographically portable, in that you can continue paying in while living and working in various locations and that it is also placed with a custodian based in a safe, secure international jurisdiction.