Unlocking financial freedom: 5 expert tips for retiring in the UAE

WellbeingArticleJune 25, 2024

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Retirement planning consists of anticipating future needs and factoring in potential healthcare costs while ensuring that the plan aligns with personal aspirations.

In the ever-changing dynamic UAE, the financial landscape is significantly transforming. As the annual bonus season approaches, residents are considering how to spend their bonuses.

While some feel the liberty to spend their bonus on a holiday, others invest their bonus into assets or retirement funds. Seven in 10 UAE residents intend to stay within the country post-retirement, which indicates a clear change in priorities, with an increasing number of individuals focusing on retirement planning.

When planning for a comfortable retirement, three pillars form the foundation for a financially secure future: evaluation of your personal financial situation, establishing clear retirement goals, and implementing effective saving and investment strategies. A comprehensive assessment of current income, expenses, assets, and debts will help you understand your economic standing and make informed decisions.

Once your personal financial situation is clear, you must set realistic retirement goals based on your desired lifestyle during retirement. Whether it involves travel, pursuing hobbies, starting a business, or maintaining a particular standard of living, defining these objectives becomes a roadmap for your financial planning.

Retirement planning comprises anticipating future needs and factoring in potential healthcare costs while ensuring that the plan aligns with personal aspirations.

Finally, you need to work towards crafting an effective plan to help build a robust financial foundation. Factors such as risk tolerance and how long you plan to invest are key aspects to consider when choosing an investment option that suits your needs. Navigating the subtle and vibrant financial environment requires a thoughtful approach, where a balance between immediate economic benefits and long-term security is struck, providing a comprehensive strategy for a fulfilling retirement.

Although these pillars lay a good foundation for understanding the process, assessing and understanding the nitty-gritty of a financially independent future is essential. By following these five simple steps, you will be well on your way to building that secure tomorrow.

1. Prioritise retirement savings

Many aspire to a comfortable retirement but often neglect choosing the right savings strategy to support that lifestyle. Start by prioritising retirement savings and allocating a portion of your bonus to a dedicated fund and reassess your financial goals to ensure a stable future.

2. Diversify your investments

Investing in assets like gold and real estate for retirement income is common, but diversifying is vital for risk management. Explore alternatives like stocks, bonds, or mutual funds to optimise returns and secure your family’s financial future.

3. Seek professional financial advice

Professional financial guidance is crucial; even if you feel confident managing finances independently, consulting a financial advisor will provide personalised insights to make informed choices. When planning for retirement, their expertise becomes indispensable, ensuring a well-structured and aligned plan for an assured tomorrow.

4. Start early and plan ahead

Recent UAE studies highlight a strong desire among residents to retire early, with a whopping 73 per cent aspiring to quit between the ages of 50 and 65.

The key to turning this ambition into reality? Early planning. Set up a dedicated savings plan, consistently assess your financial goals, and tweak as necessary. The wisdom lies in kickstarting this process sooner.

5. Consider alternative retirement goals

As you plan for retirement, don’t just focus on maintaining your current lifestyle. Consider unconventional paths like entrepreneurship or volunteering to enrich your retirement years. Evaluate your goals carefully and align your strategy to support these ambitions for a secure and fulfilling retirement.

Seeking expert advice provides a clear path to a satisfying financial future for UAE residents managing the intricacies of bonus spending and retirement planning.

Keep in mind that effective financial planning isn’t just about the present; it’s an investment in a brighter, more secure tomorrow.

By Taru Singhal, Head of Retail Distribution at Zurich International Life – Middle East.

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