How to save for retirement? is a scary question at age 50.
It is also a great stopping point to sit down, review and plan ahead for one’s financial future.
If you have not planned for your retirement till now due to various commitments, don’t be disheartened! Now is the time, when the resources like time, money and experience are more than willing to help you save for your retirement.
Around 50 years of age, you would be at the top of your professional skills and abilities, thus resulting in increase of income.
Most of your personal responsibilities would be more or less over. Children would be out of college, ready to propel their own future. Goals like owning a home, starting a business, touring may have been achieved, thus resulting in higher disposable income.
More income and less expenses is a wonderful recipe for a successful retirement savings.
While savings is essential to build a nest egg, wise investment of your savings is crucial to mitigate inflation and currency risks.
You should carefully choose a good retirement savings plan which takes into account the following aspects;
Low Premium Payment Term
The premium payment period should be between 5 years to 10 years and no more. A plan with longer premium payment term comes with higher surrender charges, if the plan has to be stopped earlier than planned.
When you are looking for a company to protect and grow your wealth over a number of years, do all the due diligence necessary and choose the company which has solid foundations, giving you the confidence that your money is in safe hands.
As an Expat in UAE, your retirement plan has to take into account the currency exchange risk. Particularly Expats from India, and other South East Asian countries, whose currencies are falling down in value.
Although Indian expats prefer investing in Pension plans in India with Life Insurance Corporation (LIC), HDFC Life, SBI Life, Mutual funds and other pension plans. They would be better off, investing in Retirement or Pension plans in UAE in US Dollar, protecting them from currency depreciation risk.
The investment has to be diversified into various asset classes, industries and geographies to ensure that the portfolio is balanced and is not exposed to extreme volatility
The retirement plan should be flexible enough to adapt to the possible changes in your financial situation.
Check if the following flexibilities are available;
- Increase or decrease of the premiums,
- Premium holidays,
- Partial Withdrawal
- Full Surrender
It is always advised to choose an Offshore plan protecting your income earned as an Expat in UAE. This protects your savings from the tax implications in your home country. It also allows you to decide where and how the Maturity Proceeds of the plan are to be paid.
All savings and retirement plans have charges and other important caveats. It is extremely important to read the terms and conditions of the plan with your financial adviser, and demand satisfying answers; before signing up for the plan.
Your financial adviser plays a crucial role in helping you choose and manage your retirement plan. Be very careful on choosing your financial adviser. Obtain as much as information as possible about his back ground, experience, and qualifications. Seek testimonials of his past clients and other relevant information.
To know more about How to save for retirement...
or to help you choose and manage the most suitable retirement plan, based on your current financial situation and goals, Call me on 050-2285405
My goal is to provide residents of UAE; the necessary tools to help them make a wise decisions with their money.
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