Posted by jonathan on March 27th, 2009
About Offshore Retirement Planning
Filed under: offshore
Retirement planning is a part of the financial planning, including the offshore pension savings plan. The purpose of retirement planning is for the expat to achieve the determined retirement objectives. This starts with an analysis of all the assets an expatriate already has and leads to a tailor-made retirement plan.
How does retirement planning work for expats?
To reach the most optimal retirement plan several steps have to be taken.
* Determine the personal retirement objectives – The expat has to decide when one wants to retire and what level of income is needed to enjoy retirement in the lifestyle he/she wants/ is used to.
* Check the current situation – Based on the set objectives a check will be made to see if the current situation is sufficient and, more importantly, if this is the most optimal solution to achieve the set objectives.
* Optimize the retirement plan – After the current retirement plan has been checked, the investment funds will be selected and the retirement plan will be optimised to make sure the set objectives will be achieved.
* Arrange (offshore) pension savings plan – The (offshore) pension savings plan has to be arranged to start regular and lump sum savings for retirement.
* Evaluate the retirement plan – When the personal situation of an expat changes, e.g. by marriage or childbirth, this might effect the retirement objectives. By evaluating and adjusting the retirement planning, the expat keeps investing in a tailor-made solution based on these changed objectives.
What do expatriates have to take into account?
There are several issues expats have to be aware of while planning their retirement.
* The costs of delay – The sooner the expat starts with retirement planning, the lower the total costs to achieve the determined fund. Each delay will lead to an increase of the total costs. As the investment has less time to gain returns and the regular savings have to be higher to achieve the same fund.
* State pension – Expats cannot solely rely on state pension. As it is not sure state pensions will still exist when the expat retires. And if it/they still exist, it might not be certain this/these state pensions are sufficient because the expat has moved from country to country and therefore might have state pensions in several countries.
* Offshore pension – Expats have a more privileged position than most because they have more freedom in making investment decisions. Therefore they can choose to invest in tax-friendly offshore funds.
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March 27th, 2009 at 12:51 pm
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