The retirement age for expats is 60 years old, even though the UAE’s Ministry of Labour does accept requests for work permits of individuals over the age of 60 years, up to the age of 65 years. The UAE’s official retirement age was increased by one year at the end of February this year. But unfortunately, this has very little benefit or relevance for British Expats in Dubai. The retirement age for UAE nationals, which was 48 years, will be raised by one additional year, making it 49.
The UAE’s General Pension and Social Security Authority (GPSSA) stressed that it is important to take the age requirement into account if employees wish to resign and retire. There is a difference between pension eligibility and the date of pension disbursement.
British Expats in Dubai, however, are not eligible for UAE pension, but they are paid gratuity as employees, an end-of-service pay-out. This means that personal retirement planning is an essential requirement for British expats in Dubai and across the region. The absence of a formal pension fund means that they must take full personal responsibility for creating a retirement fund that will provide them with provisions for their later years.
To be eligible for end-of-service benefits in the government sector, an expatriate employee must have completed at least one year of continuous service with the respective federal entity. End-of-service benefits for expatriates in the government sector are calculated as per the following:
- One month’s basic salary for each year of service for the first five years of service
- One and a half month’s basic salary for each of the next five years of services, calculated based on the last five year’s average basic salary
- Two months’ basic salary for each year of service thereafter, calculated based on the last five year’s average basic salary.
Basic calculations can help establish your day-to-day expenses as a retiree. Then there is the inflation factor, calculates what works out at a typical inflation rate of 2.5% to 4% per year.
Fluidity and flexibility are essential to any future planning – because life gets in the way. Not only is it important to diversify your investments, but you will also need to tweak your plans as you go along. Don’t hesitate to seek expert help – you can’t be a master of everything.
Keep the following strategies in mind when making retirement plans in the UAE:
- Start saving for your retirement as soon as possible
Classic advice holds that the best time to start saving for your retirement was 10 years ago. The second-best time is today.
- Treat retirement savings as an expense
A lot of people save for their retirement after paying their bills. As a result, there may not be anything left to set aside, and the decision gets postponed to a future payday.
- Spread your retirement assets
