Dubai / Emirates Business
There is an alarming disparity between people’s desired retirement lifestyle and the amount they are currently saving, according to a survey by the Dubai-based financial planning company Guardian Wealth Management (GWM).
GWM conducted a survey of its 3,000 Gulf-based clients asking them about the type of lifestyle they hope to lead upon retirement and the percentage of their wage they are putting to one side every month.
The results indicate that the majority of Gulf-based expatriates expect to live a life of financial security when they retire, with enough savings to afford holidays, buy luxury items and pursue their hobbies. But in reality, they are not putting enough of their monthly salary into savings and investments, and face a retirement dependent on state pensions.
“Unfortunately, a lot of expats in this region face a rude awakening when they come to plan their retirement,” said HamzahShalchi, who manages GWM’s Dubai operations. “There’s a big difference between living out your life in financial security as a retiree and struggling to get by as a pensioner.
“Too many expats think that because there’s no tax, they can live a life of opulence. But they lose touch with the importance of planning for the future so they can lead a similar life of comfort and luxury when they stop working.”
The majority of respondents to the GWM survey were earning incomes of between Dh40,000 and Dh60,000 per month. Despite such attractive salaries, more than three quarters of respondents said they were putting less than 20 per cent of their monthly income towards their retirement, while a fifth said they were saving just 0-10 per cent.
The responses were in contrast to people’s desired lifestyle. More than 80 per cent of respondents said they aimed to live a high standard of living upon retirement with more than enough disposable income to pay for their desired lifestyle and added luxuries.
The results, while alarming, did at least indicate an awareness of the discrepancy. The majority of respondents acknowledged that they were not saving enough for their desired retirement lifestyle and indicated that they would ideally save 20-30 per cent of their monthly income.
“One of the problems is that a lot of people aren’t aware of the savings options open to them and instead get sucked into a culture of overspend,” said Shalchi.
“In reality, there are numerous savings and investments options that can be catered to suit every individual’s requirements. At GWM we’ve got a hugely talented group of licenced financial planning advisors who can get people on the right track towards the retirement lifestyle they’ve always dreamed of.”