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1. Run the numbers

Do you know how big a nest egg you’ll need down the road? According to a recent Wells Fargo study, four out of ten expats are unable to estimate the amount required to live a comfortable retirement. Check out the retirement calculator at and plug in your particulars to come up with a concrete figure. Then invest the money ASAP. Sure, you have other expenses to deal with, childcare, school tuition, but the earlier you start; the more it becomes a lifelong habit.

Here is an example of a retirement calculation for a 40-year-old expat looking to retire at aged 65, earning an income of $65,000 per year in today’s terms. We have to factor in, an annual global inflation rate of 3% to preserve buying power.

Annual income in retirement from age 65 – USD 65,000.00

Assuming inflation at 3% per annum to age 65 – USD 136,557.64

Lump sum required to provide this income* – USD 2,731,153.00

Monthly saving required to achieve income @ 10% growth – USD 2,642.00

*Based on 5% annual income from growth after maturity. How do you feel about these figures?

2. Invest in pension provider

The problem we face in the UAE is that very few companies offer any form of financial provisions for our long-term financial goals, such as retirement. The majority of us have come from a structured financial jurisdiction where financial benefits are provided as common law. Sadly in the UAE, it is up to ourselves to replicate said provisions to ensure we are not aiming towards a shortfall. Of course, if you can afford it, you should set aside more. Aim to save at least 10 percent of your gross income. If you can’t manage that, put in what you can and bump up your rate by 1 percent every year. Don’t bank on government pension plans, which are no longer being contributed into. Not contributing to your pension fund will almost certainly lead to a shortfall.

3. Attack debt

Every dollar you spend on interest payments means less money you can invest toward your retirement. If you have significant high-interest debt (such as from revolving credit-card balances), whittle it down before ramping up retirement savings, since the percentage you pay can easily cancel out investment gains. Prioritising debt might mean cutting down on luxuries to set side extra money. You might also try snowballing your debt, that is, paying off your smallest balance first and then reallocating toward the next-largest number. Wiping debt off the books now makes it a lot easier to save for later.

4. Maintain your Rainy-Day Fund

If you don’t already have six months’ worth of emergency living expenses, build it up now. Having this cushion enables you to keep your retirement savings plan on track when an unexpected bill or expense comes along.

5. Keep your costs down

Got a raise? Great. Don’t upgrade your lifestyle. A bump in pay can entice you to move to a nicer place or buy a new car. A better approach is to stay where you are, keep driving your old vehicle, and invest the money for retirement.

By Aaron Crotty

Aaron is a certified Senior Financial Planner with over seven (7) years experience in the financial industry. He is based in Dubai where he utilises his expertise representing Arlo Associates. Contact Aaron via email at

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