In the UAE, expats cannot participate in local social security and retirement pension plans, and are often excluded from such plans in their country of origin. While UAE employers offer the standard end of service benefit as a replacement to retirement plans, this payment often does not meet the financial demands for retirement. Additionally, many UAE expatriates are unable to benefit from the ‘5th pillar’ of retirement planning, according to the World Bank’s 5 pillar model – owning a home. High upfront costs and restrictions on foreign property ownership in the UAE lead many expats to rent homes rather than purchase them, preventing them from using a home as a ‘nest egg’ to fund their later years.
All of these factors contribute to a gap in retirement planning for UAE expats, a gap which individuals and organizations can work together to address through proper planning. Below is an outline of three initial steps:
1. Put the right plan in place and stick to it!
Individuals working in the region need to be proactive in planning for their retirement, which can be a challenge in the UAE with its many consumer attractions. The UAE has done an excellent job in marketing itself globally as a tourist destination, with a huge list of must-dos and must-haves; be it cars, jewelry, concerts, restaurants, and more. This ‘living in the moment’ culture has led many expatriates to spend rather than save in the short term. …