Contemplating your retirement dream?

Many people dream of a comfortable retirement but don’t take the time to plan their journey. Here Chris Cain highlights how Middle East expats can make their retirement dreams a reality.

With the steady rise of both global life expectancy and government pension funding deficits resulting in increasing retirement ages, people’s retirement dreams are being pushed further and further into the distance. Responsibility is falling more and more on individuals to adequately prepare for their later life supported, hopefully, by their employers with appropriate funding solutions. 

Experts suggest that retirees will need to have set aside between 50% to 80% of their final salary for every year that they will be retired*. So, for example, if you retire at the age of 60 on a final salary of USD100,000 and live until age 85 you would need to have saved a retirement fund of around USD1.25 million to enjoy a comfortable retirement, not including government pension, other income sources and growth of your lump sum during the retirement period. 

Plan for the future

By far the most efficient and cost effective way to save and arrange for the future is through Workplace Savings Plans, which provide access to low cost institutional investment options, allowing contributions to grow over time. However, most employers in the Middle East outside of the Dubai International Finance Centre (DIFC), where they now have the DIFC Employee Workplace Savings plan (DEWS), do not offer this type of benefit. Instead, employees are usually left to try to source their own private savings solutions, which tends to be more costly and less flexible for the individual. 

If you are an employee in the Middle East and your employer isn’t offering a Workplace Savings Plan as a benefit, it is something you could raise with them in the first instance. Workplace Savings Plans are relatively straightforward to set up and administer, as well as allowing employees to plan for their future by saving at source through salary deduction - an important step towards achieving the retirement dream! With financial wellbeing becoming more and more prevalent, such plans are a fantastic addition to an employer’s total rewards package and not only attract, but also retain key staff.

Equiom is proud to be the long-term trustee for the Emirates Airlines Group Provident Fund as well as the Master Trustee for the DEWS plan.

For further information on how Workplace Savings Plans could work for you or your organisation, please contact Chris Cain.

*https://www.investopedia.com/articles/personal-finance/092414/retirement-what-percentage-salary-save.asp

This article has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The article cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. This is not financial advice; if you are looking for investment advice, you should seek your own professional advisor.

Equiom Group, its partners, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this article or for any decision based on it. 

Equiom Fiduciary Services (Middle East) Limited is regulated by the DFSA. Any information contained herein is intended only for Professional Clients or Market Counterparties as defined by the DFSA, and no other Person should act upon it.