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.
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