Retirement Plans

Retirement is a word that many of my clients tell me they cannot relate to. They can’t relate to it because they cannot envision themselves in a “traditional” retirement mode of perpetual golf, naps on the beach, and no more work. But to a person, they want financial independence at some point in their future; financial independence defined as the ability to make choices regarding their personal path because they have accumulated sufficient assets with which to replace the income currently provided by their business, their employer or both. Making this happen requires planning and discipline; planning, because if you don’t quantify your retirement goal in terms of when you want it and how much income you want to have, you can’t know if you will achieve it. Discipline, because if you don’t save now, it will be too late later. Start by defining the income you want to have at retirement and when you want retirement to start. Retirement is about income, and it takes money to make it happen.

Suffice it to say, you simply must save for this yourself, and how much you need to save is a function of your goals, your plan; primarily based on how much income you want to have at retirement, and how many years you have until you get there. Performance matters too; it matters a lot. I see investment accounts all the time, managed by the client themselves, that chronically under achieve. Why? Poor asset selection. It doesn’t have to be this way. Asset selection is everything, arguably more important than asset diversification. Long term, consistent results with respect to growth and capital preservation are critical. The difference of a few percentage points on an average annual basis over time can mean a significant difference in the size of the asset base at retirement. The bigger the nest egg, the higher the income.

Since no single mutual fund family has the best in class performer in all asset categories, it is simply not possible to obtain top quartile long term growth with capital preservation in many packaged plans. Because we’re independent, we have access to all companies and all products in the market. That means that we can select for you the best solution, with the best returns to fit your individual circumstances giving you the best chance to establish your long term goals and financial security.

5 common mistakes expats make with their money:

Currency Speculation
For the majority of expats, currencies should be viewed as cash, not investments. Unfortunately, currency movements are extremely volatile and difficult to predict—this is true even for professional forex traders.

Buying Inappropriate Investment Products
Make sure you are comfortable with an investment product that fits your lifestyle both now, and in the future. Globally diversified investment products with a high level of transparency, secure offshore domiciles, portable and flexible to fit in with your globe trotting expat.

Making Impulsive Property Purchases
Buying a property in some exotic offshore locale. Property can certainly be a great investment, but you need to do your homework and consider the risks with unclear ownership structures, expat transient lifestyle and undeveloped secondary markets when you are ready to sell.

Maintaining a Home Country Investment Bias
While it's normal to want to stick with what's familiar, for expats it's important to rework your finances to reflect the realities of your global lifestyle. As expats we tend to maintain a home country bias for investments and currency, but doing so can expose you to considerable risk along with missed opportunity. For example, earning your income in Thai baht, paying for college in the United States, and planning to retire in Europe can be tricky to manage if not planned for carefully.

Relying on Home Country Advisors for Financial Advice
Managing finances internationally across borders is complicated even for experienced expats. Most home country advisors are unfamiliar with the regulations, tax regimes, and financial choices facing expatriates and don't know the markets where expats work and live.

If you have concerns about your own retirement, please call for an impartial view and chat, it may be the piece of mind you need.

Vanessa Vrdoljak

Financial Consultant
085 509 976

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