Saving for Retirement Offshore
When you work offshore, you are generally in a much better position than the folks back home when it comes to saving. Unless you are unlucky you will pay less tax, and will be paid more for the inconvenience of living overseas.
But you do not get the tax breaks available to people in your home country, so you will need to invest carefully. One problem is that there are many so-called ‘expatriate investment specialists’ who are not really very knowledgeable. They just assume you are making a lot of money, and that you don’t need to invest it carefully.
So where should you start? Make sure you do save a sizeable proportion of your income, and invest it in a variety of funds, preferably offshore funds that like you, are not subject to US taxes. But be warned! There are some funds operating in places where there are few regulations on how they invest, and on the management fees they pay themselves.
As with any investment program, your offshore retirement fund should include a spread of investments, including Treasury bonds and equities, either directly, if you have the time and inclination, or through funds operated by well-established companies. You will find that many of the best fund management companies operate some offshore funds, and these are generally worth looking at.
A spread of investments including property
One of the best investments you can make is in property – in a home for yourself in your home country, unless of course you do not want to go back there ever. Most people do want to go back, and if you invest in a home in the USA in a good area, probably costing a little more than you would normally do, you will benefit from the general long-term trend for housing to go up ahead of the inflation rate.
The third aspect of your retirement fund should take advantage of the potential gains in foreign currencies. At present, the USA dollar is weak, and has a lost a lot of value against the other main currencies, such as the Euro and British pound. As an expatriate, you will be much aware of this than most people, so do find ways of benefiting from any gains in foreign currencies. However, it is not easy to invest directly into currencies, so you need some expert help here. As with any investment for retirement, you need to spread your money among different currencies, and to do that with professional advice.
All in all, make sure that you spread your investments, and that your funds are managed conservatively, as this is your retirement fund we are talking about.
Disclaimer
The information on this web site does not constitute an offer in any way. It gives general information, but is not financial advice. The aim is to help you decide what to do about your retirement plan, and the importance of saving for retirement. You should consult a retirement planning adviser with a proven record before setting up a retirement plan.
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