Retirement Planning for Habitual Expatriates

All individuals need to plan and save for their retirement to ensure a secure and comfortable retirement. However, retirement planning becomes all the more necessary and complicated for habitual expatriates.

Habitual expatriates

Habitual expatriates move from one country to another and switch jobs more frequently than others. Thus, with different retirement systems and policies in different countries, habitual expatriates must plan their retirement with extensive foreknowledge to receive as much coverage, tax benefits, and sustainability as possible.

Challenges Faced by Habitual Expatriates

Habitual expatriates are required to put extra thought into their retirement planning due to their ever-changing locations and lifestyle. Their guiding rules and regulations also keep changing with their country, and so do their pension schemes. Some may be able to or want to stick to their home country’s pension schemes, while others may find the systems of other countries more beneficial.

The most critical challenges faced by expatriates involve the transfer of pensions and taxation rules. They may not be able to take their pension contributions made in one country to their home country when they move and may not be able to transfer their pension plans to a new company. Additionally, tax benefits earned on pension contributions in one country may get lost when moving to another or home country.

Therefore, expatriates must perform more extensive research in terms of retirement planning than the citizens and residents. It ensures that they choose a suitable pension scheme, with maximum tax benefits and transferability, to lead a comfortable life post-retirement.

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Retirement Planning for Habitual Expatriates

Retirement planning for habitual expatriates must begin with deciding on when and where they plan to retire. Additionally, they must take the pension rules, taxation rules, inheritance tax rules, and applicable pension schemes into consideration.

When to Retire

The retirement age is an important parameter for retirement planning, both for homebodies and habitual expatriates. It gives an overall picture of how many years you will contribute to your pension schemes and how many years you would need the retirement fund for, tentatively. If you plan to retire early, you may need to make higher contributions to your pension fund to reach the required pension pot for a comfortable lifestyle after retirement.

Which Country to Retire in

Habitual expatriates move between countries, but usually they have a retirement country in mind. They might want to retire in their home country or another country they love. The retirement rules and taxation systems differ from country to country, and so do the living expenses and other financial requirements. Therefore, it is critical to plan on which country to retire in, sooner than later, before planning the finances for retirement.

For instance, Portugal is considered one of the most generous countries in terms of its pension systems. All working residents in the country receive a pension, irrespective of their nationality; however, the amount of pension may vary. Also, the native country plays a pivotal role in retirement planning. For example, the US citizens find it difficult to access their pension funds while living abroad, while the UK citizens can easily access their pension from overseas.

How will the retirement be funded

Another essential aspect of retirement planning for habitual expatriates is determining how they plan to fund their retirement. They have options to choose among state pension schemes, employer pension schemes, and private pension schemes. The rules for state pension or public pension schemes vary with the country and need to be researched during retirement planning to understand the rules of the country you live in and pay taxes.

Similarly, the contributions made to employer pension schemes may or may not be transferable if you move to a new country or jobs. Therefore, retirement planning for habitat expatriates must include considering the transferability of pension contributions while moving to a new country or jobs. They can also consider the options of any private pension schemes available.

Retirement planning

Retirement Saving Options

The retirement savings options for habitual expatriates are different from those for citizens. The expatriates may not enjoy tax benefits applicable to citizens and may also not receive similar returns. So, habitual expatriates need to be extra cautious while looking at retirement savings options.

Habitual expatriates can supplement their income post-retirement by investing in other mediums on top of their pension schemes. Saving in international savings accounts offers several financial advantages to expatriates, including tax benefits and future savings. The international savings accounts can also be used to invest internationally in opportunities that may not be available in the home country.

In addition to savings accounts, habitual expatriates can also plan for their retirement by investing in real estate when abroad. Real estate helps them generate a passive income stream for retirement and boost their income for a comfortable lifestyle. The expatriates can research their options in terms of interest rates, lending rates, and purchase price to buy a property that helps them both save taxes and generate income.


Taxation rules are highly variable among countries and form the most critical part of retirement planning for habitual expatriates. You must look for alternatives that offer tax efficiency despite the country. Many offshore investments function as globally portable retirement plans and work as tax wrappers.

Also, multiple countries follow double tax treaties that prevent habitual expatriates from being taxed doubly on the same income. For example, Monaco and Dubai are zero-tax areas where you have to pay taxes only in your home country and not in the country you live in. However, you may get taxed twice in countries like Brazil that are not a part of the double tax treaties.

The tax considerations should also include an understanding of inheritance tax. If you leave a lot of worldwide investments when you die, you may leave your heir with a huge inheritance tax bill. Thus, you can plan how much you will receive at your retirement, how much you will spend, and how much you will leave behind. The inheritance tax rules also differ from country to country and should be researched well.

Thus, retirement planning for habitual expatriates must cover specific aspects that may not be critical for citizens. It is highly recommended to take professional advice to understand the tax structure of a country, receive the maximum tax benefits, and create a substantial pension pot for a comfortable life after retirement.


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