The average life span has been steadily rising while the average age of retirement has stayed relatively the same. This means saving is even more crucial than before in order to ensure you don’t have to come out of retirement because of short funds. A report last year by HSBC said that of UAE expats, over 80 percent said they were not prepared for retirement, as their savings were less than ideal. Because of this, you can count on Globaleye preparing you for retirement; here are some facts and tips on what to do.
Know the Facts
According to HSBC’s report last year, The Future of Retirement: A New Reality, 57 percent of UAE residents expect cash savings to be their largest source after retirement, rather pensions, IRAs, 401ks, pensions and various investments. Almost half aren’t able to even save do to high costs and while most expect their retirement to last 15 years, their savings generally only amount to last about nine years. Expats living in the UAE cited the reasons for not saving for retirement as, too far away to think about and lack of knowledge of pension schemes for expatriates and retirement plans.
This is a huge difference from the UK and US, where most people start saving around the age of 25. Compare that to UAE residents who think they can put off saving till 37 and still have the same life style. On top of keeping the same standard of living, over half polled said they want to start their own business after retirement, versus only 7 percent in the UK. But all across the board, around 60 percent of people wanted to spend their years in retirement with family and friends. Though, without early planning and smart saving, one can expect to only be working more, which is why working with a financial advisor to plan your retirement is so important. Surprisingly, over 93 percent of the over 15,000 UAE residents polled, said they did not plan any of their savings with an advisor, using blunt approximations and guesses to save – only 18 percent in the UK admitted to doing so. Other troubling results of the poll revealed that UAE residents rely on cash savings, with 57 percent expecting it to be their primary source of income and 28 percent admitting to spending some of their retirement savings already. Of course this is a result of bad planning, but a key factor in all of this is lack of diversifying investments, as the sayings goes, “don’t put all your eggs in one basket.”
In favor of early planning and seeking professional financial advice is the fact that those who seek professional advice generally have 50 percent more in savings than those who don’t. In addition to that, those who at least planned typically doubled their retirement savings compared to those who didn’t.
How to Prepare
The best thing to do would be to sit down with an advisor, they’ll help you plan every aspect and put you in the best position for retirement. But before doing that, it’s always a good idea to think about what exactly you want in retirement, specifically mapping out all the costs from travel, housing, healthcare, hidden expenses, gifts – basically everything you can possibly think of being an expected cost. Mapping out expenses and setting a budget to adhere to is the best bet of not draining your retirement funds and ensuring they last.
If you haven’t started saving, start right now. Cut costs, invest, do whatever you can to start stashing away money in a diversified portfolio, which is where a financial advisor can really help put you in the green.
Convinced yet? Probably. So come talk to a financial advisor today to start planning your retirement and savings so you can enjoy those years to the fullest extent.