SECTION 6
Choosing an ideal retirement savings plan can be challenging and a wrong choice could wipe out years of hard earned savings.
The following are the features of an ideal retirement plan;
Low Premium Payment Term
The premium payment period should be between 5 years to 10 years and no more. A plan with longer premium payment term comes with higher surrender charges, if the plan has to be stopped earlier than planned.
Security
When you are looking for a company to protect and grow your wealth over a number of years, do all the due diligence necessary and choose the company which has solid foundations, giving you the confidence that your money is in safe hands.
Favorable Currency
As an Expat in UAE, your retirement plan has to take into account the currency exchange risk, particularly Expats from Europe, India, and other South East Asian countries, whose currencies are falling down in value.
Although Indian expats prefer investing in Pension plans in India with Life Insurance Corporation (LIC), HDFC Life, SBI Life, Mutual funds and other pension plans, they would be better off, investing in Retirement or Pension plans in UAE in US Dollar denomination, protecting them from currency depreciation risk.
Click here to know Why NRIs should invest in a Dollar based Life Insurance and Investment Plan in UAE.
Diversified
The investment has to be diversified into various asset classes, industries and geographies to ensure that the portfolio is balanced and is not exposed to extreme volatility
Flexibility
The retirement plan should be flexible enough to adapt to the possible changes in your financial situation, allowing increase or decrease of the premiums, premium holidays, and allowing partial or premature withdrawal if you have to stop the plan due to loss of job, decrease in income, or due to health reasons.
Tax Efficient
It is always advised to choose an Offshore plan protecting your income earned as an Expat in UAE, shielding you from the tax implications in your home country and allowing you to decide where and how the proceeds from the maturity of the plan are paid.
Transparent
All savings and retirement plans have charges and other important caveats, it is extremely important to read the terms and conditions of the plan with your financial adviser, and demand satisfying answers to all the conditions before signing up for the plan.
Your financial adviser plays a crucial role in helping you decide how to save for retirement by recommending and managing your retirement plan, so be very careful when choosing your financial adviser.
Obtain as much as information as possible about his back ground, his experience, qualification and seek testimonials of his past clients and other relevant information.
Do the necessary due diligence to if he or she is qualified to provide Financial Advice.