Retirement Planning

Why save for retirement?

There are a variety of very good reasons that people begin putting a little aside, and often it depends on personal priorities. It could be that you are saving for something specific; a property, a wedding, or perhaps just a rainy day. However, the most important reason, which any of us should start saving for, is our own retirement.

According to the Office for National Statistics, only 5% of those of us currently in our twenties will have achieved financial independence by the time we are 65 years old. Those who are not financially independent will have to continue working or be heavily reliant on family, friends, charity and the state.

The time is now

As an expatriate, you are in a more privileged position than most. Chances are that you’re enjoying a higher salary and extra benefits as a result of working away from home. However, if that money is just sat in the bank, it is currently losing value, due to global inflation and low interest rates.

As an expatriate, you have far greater freedom when it comes to making investment choices. You are not restricted in the same way as domestic investors.

Providing for retirement is a major consideration and one we all need to take a long honest look at. It affects not only ourselves, but our families too. The longer you leave it, the more costly it becomes.*Every individual’s circumstances are unique, and should be treated as such.

Browse our directory to find an independent adviser that can help you to build a flexible and hard-working investment strategy. There is no question that everyone needs money set aside for their future. The only question is how you approach it.

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Myth Busting

There are three common misconceptions when it comes to planning for retirement.

Myth #1 “I’m too young to worry about retirement planning…”

You may feel that retirement is a long way off. However, if you calculate how many ‘pay days’ you have left, you will see that it’s not very far away at all. Every month that you delay, you significantly increase the amount that you need to invest in order to achieve the same goal that you would achieve if you started today.
For example, a 25 year old who saved $300 a month from today could receive $1,000,000 at retirement age. However, delaying starting a plan for a further ten years would mean that as a 35 year old, he would need to save $800 a month to achieve the same amount at retirement age.

Myth #2 “There is always the state pension to fall back on…”

Most state pension schemes are not funded, meaning that the state pensions are paid from money collected by the government each month. As the workforce worldwide gets smaller and we live longer, there will be less and less funding for an increasing number of state pensions.
The reality is that state pensions may not even exist by the time we reach retirement age. If they do exist, the age at which you can access it will almost certainly be higher and the amount you can access much smaller.

Myth #3 “Women are equal…”

According to the eighth Scottish Widow annual report, only 42% of British women have adequate savings for retirement compared to 49% of men. Therefore many are approaching retirement without financial security.
A woman’s earnings still tend to be less than a man’s, meaning that they are also likely to have lower pension benefits. On top of that, up to 50% of working women don’t have a company pension plan. Women may have time away from work when starting a family, meaning that their state pension contributions will also be affected.
All too often, women rely solely on their husbands to provide them with a secure financial future, and sadly are left severely lacking if life does not go to plan.
All of this in conjunction with the fact that women, on average, live longer than men means that women need to be both independent and serious about their financial future.

Finances AbroadMaking the complicated simple!