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Money Matters: Save For Retirement Abroad
Even if you are just starting your career and have no idea what the future holds for you in
terms of where you will live in the world, you'll still want to think ahead about
retirement.
If you plan to be a career expat and spend most of your adult life living abroad you will
especially need to consider your unique situation as a long term citizen of one nation and
resident of another.
What retirement plan options are open to you?
Some international employers provide retirement benefits for their employees, but many
don't. International teachers will find that most international schools do not offer
retirement options.
Your other options for a pension are either a government sponsored program or a private
program.
Even if you will have an employer pension and a government pension, for the most
secure and comfortable retirement you should also have your a private retirement or
investment account as a backup or supplemental source of income.
Employer Sponsored Pension
When your employer offers a retirement plan
Your first action in planning and investing for retirement when living abroad or in your home country should be to take advantage ofyour employer's benefits (if any).Before you start the job though, be sure to find out if the plan can be transferred toanother employer or to an independent pension scheme once your employment ends.
Government Sponsored Pension - Paying into a government retirement plan
When working overseas you might have two options for investing in a government
sponsored pension. This is not guaranteed, as each option depends on your particular
country of citizenship, your particular country of residence, and your particular
employment status in the country you are living in.
In any case, you should find out what options are open to you in this regard, as it could
mean free money on your part.You can find out more by asking your overseas employer, asking other expats, doingresearch online, and asking your respective country's tax authority.If a government sponsored pension scheme is open to you, you will likely be able tochoose one of two options for payment:
- Option 1: Pay into the retirement system of your host country. -
This might be an option for you if you are a long term resident of the country.
If so, this could be a good choice for you if you are considering retiring in that
country, as the money will be paid and withdrawn in the same currency, thereby
reducing income lost in currency conversion.
- Option 2: Pay into your home country's retirement system.
You might be required to do this anyway, but your home country might have an
agreement with your host country that would permit you to choose into which
retirement system you want to pay into.If you are fairly certain that you'll retire back in your home country then you willwant to continue paying into that system, but if you are unsure or think youmight want to retire in your destination country, then consider paying into thelocal system.
Private Pensions - Investing on your own
Even if you will have an employer pension and a government pension, for the most
secure and comfortable retirement you should also have your a private retirement or
investment account as a backup or supplemental source of income.
If you know for certain which country you will retire in, then get an investment account
in that country and in that currency.For international travelers who don't know yet where they will retire, the best place toinvest-for simplicity of currency conversion and money transfer-is in an offshoreinvestment account.
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