Usually a pension plan is retirement plan, post retirement maintains same kind of life style even when we are not working, Retirement planning is one of the most important area of personal financial planning,
Retirement plan are basically in to life insurance plans, those are especially designed to meet for post-retirement needs such as Living expenses, medical expenses and emergency needs.
Why do I need to plan for my retirement?
- Financial independence: with average life expectancy increasing, to ensure maintain same kind of lifestyle post retirement.
- Unexpected medical expenses: Once age crossed more than 60 years, due to major medical expenses and have good lifestyle post retirement, it is most important to do the retirement planning in UAE, some of them have Critical illness plan, so they can really escape the medical expenses,
Following Factors need to consider while buying retirement plans
- Monthly expenses: Once you are out of work, to maintain life style expenses your pension need to cover all the expenses.
- Inflation: due to raising inflation year on year, it is most important we should consider the inflation rate also while planning for retirement.
- Simple Example: two years back one Biriyani cost was AED15, today same biriyani cost is AED20 which means due to inflation raise, so the cost also increases.
- Medical expenses: Money is needed, future unexpected medical expenses due to major illness,
How can I start retirement plan in UAE?
Retirement planning is one of the most important in the personal financial planning, MetLife, Zurich and LIC have best retirement plans i.e. Long-term Investment plans will help to achieve long term financial goals.
Following major points will help you to start the retirement plan early
- Calculate your net worth: i.e. assets and liabilities if any liabilities are there start early set aside monthly to clear the debts.
- Monthly Saving: start savings monthly so you can achieve the goals in a long term,
- Create your monthly budget: To meet regular ongoing expenses and its most important to set aside monthly budget towards your retirement
- The power of compounding: if you save monthly USD 500 for 30 years at 8% p.a rate of return, you will have USD 708,806.
- Keep emergency Fund: Set aside 5 to 10% of the monthly income, so that it will take care of emergency fund requirement.
- Make wise investment: Diversification of investment will help you to achieve your goals on a long term basis
How much money do I require at age of 55 or 60?
What is the best Retirement Calculator?
Where and at what Age would you wish to Retire?
Term Remaining for your Retirement?(Years) A
Required Monthly Income to Maintain Current Life Style B
Percentage on which you will assume the capital requirement? C
Capital Required for Retirement
B x 12 x 100 / C = D
Anticipated Rate of Inflation? E
Capital Requirement including Inflation
D x (1+ E/ 100) ^ A = F
Total Current Provisions G
- Immediate Annuity: Your pension will start, immediately after a policy purchased. Usually lump sum amount need to pay to get the immediate pension.
- Deferred Annuity: A corpus can be accumulated over a policy term, where regular premiums are paid and pension will start after completion the term of the policy.
- Single Life Annuity with return of Purchase price: Your pension is paid to you for your life time. In case of unfortunate of death, beneficiary will receive the Sum assured.
- Joint life Annuity with return of Purchase price: Your pension is paid to you for your life time. In case of unfortunate of death, your spouse will receive pension for her life time and after she passed away, the beneficiary will receive the Sum assured.
Dubai announces first-of-its kind 'retirement visa' programme
Dubai government announced on 2ND September 2020,
Applications can be submitted under the "Retirement in Dubai" program,
Any resident or retiree outside of UAE and over the age of 55 can apply for the retirement visa
What is stopping you?
Start your retirement plan early, you retire early!
There are more investment options available on retirement plans,
To get more details, have a free Consultation, without any Obligation,
Reach us or call us, let’s connect and discuss, let’s do a proper Retirement planning its part of Personal Financial Planning.
“The only question is whether you’re going to do it today or tomorrow. If you keep saying you’re going to do it tomorrow, you’ll never do it. You have to get on it today.” – Warren Buffett