Retiring early is the dream for most expats in Dubai but the financial reality is few know if they can afford to give up work. For too many years, retirement has been decided by age rather than financial status.
As soon as you reached 65, you stopped work and received a state pension. Now retirement is a much more flexible affair that is phased in over several years. That’s why expats need to benchmark their finances in the run-up to retirement.
Benchmarking retirement income
If you are in Dubai and ready to retire, you have already made the first important decision – where will you live when you retire. Make sure you and any loved ones with you have the right visa allowing you to remain in Dubai.
Next, you need to know whether you can afford to retire. Contact your pension providers and the Department of Work and Pensions and ask for a projection of how much your retirement savings and state pension should pay on your planned retirement date.
You may have to fund some living costs from savings while you wait for these to clock in. Then list your financial assets and their value while taking away any debts, credit card balances or mortgages to give your net worth.
Tax, wills and medical care
Both these exercises should give you an idea of how much pension income will come in and when as well as what you have in the bank. Tax on income and assets is not such a concern in Dubai as many other expat destinations as the emirate has no tax on capital gains or income.
Expats do need to register a valid will – one to deposit in Dubai where they can opt for similar legal treatment as in Britain on disposing of their assets to beneficiaries.
You will also need a will in the UK if you retain any property or assets. Paying for medical care is also an issue for expats as Dubai does not have a free health service. The government also demands expats have sufficient cover whilst working in the Country.