How Singapore expats can effectively plan an 'international retirement'

Offshore Portable Retirement Planning for Expats in Singapore

Recently, Singapore was ranked as the 5^th most expensive city in the world to live and this will come as no surprise to anybody residing here. Fortunately the many and diverse hawker's centres provide for a very affordable meal.

Even though this is the case, still we see many expats flock to Singapore for the business opportunities, exciting culinary experiences, the open and diverse nature of the population and to be based in the centre of this booming region.

Most expats in Singapore however, will not choose to retire here and will in fact either return home or seek to retire abroad whether this is in Australia, UK, Europe or elsewhere in this region.

Given the fact that a large portion of expats will not retire in their home country, it is well worth exploring the option of international/offshore investment planning.

International/Offshore investment and retirement plans are contributed to from after-tax income which therefore ensures that you are not accumulating a tax liability to be paid for at a later stage. One key benefit of offshore retirement portfolios is that you have access to these funds at a time of your choosing and you are not faced with retirement age restrictions or withdrawal amount restrictions.

The global nature of the offshore investments also allows for you to continue to contribute to and withdraw funds from the portfolio in the local currency at the time, or another currency of your choosing. The offshore structure allows your investment portfolio to grow tax-free for the entire period that the funds are held within the investment portfolio.

To highlight the power of compounding returns within your investment portfolio growing tax-free, if you were to invest SGD 100,000 today, in 10 years’ time it would be worth the following at the following rates of return per annum (Keep in mind that this assumes you are contributing nothing to your retirement portfolio which in most cases would not be the most appropriate strategy.):

• 6%  - SGD 179,085
• 8% - SGD 215,892
• 10% - SGD 259,374

If you were to retire or move to Australia for example and invested outside of your superannuation, being taxed at 30%, these resulting figures drop substantially:

• 6% - SGD 150,896
• 8% - SGD 172,440
• 10% - SGD 196,715

Each investment portfolio is specific to you and there is no ‘one-size-fits-all’ approach to portfolio management. Within your portfolio you can sit down with your Adviser and decide to hold individual equities, unit trusts, exchange-traded funds, commodities, currencies, bonds, money market instruments and cash.

You can contribute to your retirement plan at regular intervals as you wish or on an ad-hoc basis and do not have to face lock-in contractual obligations such as may be the case with domestic retirement solutions.

With approximately 25% of British expats in Singapore failing to save ANYTHING for retirement (those that admitted to it in the survey) it highlights very clearly the importance of starting to save for retirement early. And as many expats will attest to, once you have lived abroad, it can be very difficult to return home to retire.

DISCLAIMER: Please note that the above information is for general information purposes only and is not intended to be financial advice. Please consult a financial adviser to consider your own personal financial objectives and situation.