How much do expats in UAE need to save to ensure a comfortable retirement

Given that most expats working in the UAE have chosen the job to ensure financial security, how much should be saved to make retirement all it should be?

Relocating on assignment to the UAE is often seen as one way to ensure financial security in later life, but the trick is knowing exactly how much needs to be put by. Retirement isn’t a one-size-fits-all concept, and different dreams need different amounts of cash in order to be realised. For some, travelling the world in their later years or owning a luxury home in a fashionable location is part and parcel of the dream – for others, retiring to a relatively unspoilt corner of the world and living simply is where it’s at.

An important consideration is the cost of living in the place retirees would love to call home, and another is where the pension pot or other savings are invested. Also needing to be considered are the planned retirement age, an estimation of your likely life span, desired activities during retirement and an estimate of future costs and regular expenses. For retirement savers based in the UAE, a goal of Dh one million doesn’t seem excessive.

Investing a fixed amount on a monthly basis is a suitable strategy for many expatriate professionals in the emirates, with a sum of around Dh1,200 from the age of 35 years enough to get to the target amount at age 65. For those who're 45 years old when savings start, the monthly goal is higher at Dh2,500 a month, and for expats starting to save at around 55, hard work and a very high salary will be necessary to free up Dh6,500 on a monthly basis.

The above estimates should only be used as a savings goal, and should be based on a five per cent net growth rate over the years if the magic Dh one million result is to be achieved. Saving for a significant pension pot, however, isn’t a strategy which fits every individual circumstance, but it’s a better idea than dumping your spare cash in a savings bank account with limited returns, and preferable to do-it-yourself investing as regards risk.