Living or rather earning in the United Arab Emirates has its fair share of pros and cons. While there are certain benefits such as earning more and getting the option of saving more because of the country’s zero-tax regime, one of the harsh disadvantages is that it does not provide the expatriates with a suitable retirement pension plan. One must become very proactive and set up a Corporate Pension Plan In UAE while working there.
Why Do We Need A Pension Plan?
It is very important to know the reasons for taking retirement pension plans very seriously and planning it before knowing how to do it. One of the most important aspects of human life is that it is very fragile and vulnerable. And the one certainty in human life is that no matter what, we are going to grow old. And contrary to popular beliefs- People do not age very gracefully. Instead they rather become very weak and incapable of working furthermore in order to provide themselves their livelihood. And the modern society is devoid of any social security whatsoever. So the most practical approach is to start saving for your retirement as soon as you start earning because the only way to make a large amount of money is by joining small chunks of money over a long period of time.
Points To Remember And Evaluate
While setting up a pension fund in the UAE one should primarily consider the tax regime in his/her home jurisdiction. One should also be concerned with the structure one must adopt in order to make it tax-efficient. Secondly, you have to decide the amount of money you will be able to put aside for your retirement. These are very important aspect while setting up a pension plan. The next aspect one shall have to consider, especially in the UAE is movability from one employer to another. Changing of jobs from one part of the country to another might affect your capability of contributing to your pension scheme.
Pension Fund Or Employer Scheme : The Most Popular Debate?
If fixing the appropriate amount of money to save for your retirement isn’t debate enough the next question is one that often causes the most confusion, whether one should avail their saving schemes from their respective employers or choose to construct a pension scheme for himself from an independent financial advisor. The key benefit for opting for the former option is that your employer has an independent board of proficient trustees who has the ability to ask the correct question on your behalf. For example, portability of the savings from one jurisdiction to another, details of the costs involved etc. The fact that your employer will not ask for any commission fees enhances the idea of choosing your employer for going through your pension schemes. But the main drawback in this regard is that in this market you cannot avail any long-term pension solution but only a long-term savings plan from your employer. On the other hand an IFA (Independent Financial Advisor) can tailor your retirement plans based on your requirement. He can offer a certain level of portability and has the ability to alter the plans to specific tax codes. But the flip-side is the expensiveness of the process.
Things That Must Also Concern You
Other prospects one must be concerned with are life insurance and education planning. Other than Corporate Pension Plan UAE, other aspects available are Mortgage Protection Life Insurance Plan and Education Fee Planning In Saudi Arabia.