Retirement Savings Options for Ex-pats in China
Retirement Savings Options for Ex-pats in China – Jordan Donald
Saving for retirement is key, life expectancy is increasing, state pension provisions are shrinking and the responsibility for having enough to live out your golden years in comfort is now being placed squarely on your own shoulders.
The retirement savings options for expatriates naturally differ from those available to residents of their home country. If you are a tax resident in your home country you can usually benefit from tax relief on contributions into approved pension and retirement funds, and in many instances, your employer may also make contributions to the pension or retirement fund.
The situation in Southeast Asia for many ex-pats is a little different. The option to take advantage of a pension with these two mentioned characteristics is often not available. It is nevertheless crucial to save for retirement while you are working abroad, particularly as many ex-pats living in Asia find themselves with increased disposable income, an enviable situation that provides the perfect opportunity to build their nest eggs.
Fortunately, there are some great savings options for retirement available to ex-pats in Asia. Essentially, the solution is to select an investment that will serve the purpose of providing retirement provisions. There are many different types of investments available out there and finding the most suitable to your needs will be something that should be assessed and discussed in line with your plans for the future.
Below are just nine advantages of saving for your retirement in this way.
Nine advantages of the international investments available to ex-pats in Asia:
Accessibility
International investment is generally going to be more accessible than a typical pension or retirement fund, which at the earliest usually allows access from age 55 onwards. This accessibility can be a double-edged sword in that it certainly means more freedom and options for your money, but on the other hand, money allocated to retirement provision should then serve that purpose, and raiding the retirement nest egg will naturally enough negatively impact it.
Control
The maintenance of control over your savings and investments can prove attractive for many investors and may allow for the incorporation of personal values such as sustainability for instance into your investment plan. The ability to plan for early retirement is also very attractive for many people.
Currency flexibility
The ability to choose the currency of your retirement investment can be beneficial and allow you to choose the most salient currency to your life and circumstances.
Mobility
The capacity to continue to contribute to an investment is particularly useful for ex-pats who may have careers across multiple countries and who often manage their finances across multiple jurisdictions. The ability for the investment to remain functional across geographies is a great benefit in and of itself.
Freedom of choice
The shift of responsibility to save for retirement from an employer or the State while daunting is also liberating. This freedom can be incredibly motivating and provide the opportunity to build a dream retirement that is unconstrained by a budget.
Continuity of your financial planning
The ability to contribute to your retirement provision even if your tenure overseas is short will help to fill in any gaps in your retirement provision. The removal of these gaps is quite important because if they are allowed to go unchecked the problem of saving for retirement compounds until eventually, it becomes insurmountable.
No drawdown restrictions
Broadly speaking you can take as much or as little of your retirement investment as you wish at retirement instead of being subjected to initial lump sum limits for example.
Annuity not required
Once you reach retirement age, you will have several options with a retirement investment. The money can stay invested, be encashed, or take out an annuity but the important thing is that the choice is yours. You will not be forced to purchase an annuity, as is the case with certain pension providers.
Transferability
When you eventually die, any residual retirement provision can pass to your spouse or family according to your wishes.
Saving for retirement can be a frightening prospect but if you are looking for direction and assistance in building your retirement plan get in touch today.
E: jordan.donald@infinitysolutions.com
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