Loose change

Most people have trouble looking five years ahead - let alone planning for retirement.

Ask people what they plan to do when they retire and most tell you about wanting to spend time abroad or enjoy a few rounds of golf.

But then try and find out what financial preparations they have made for retirement and it really throws them off course.

Research shows that most people approaching their 60s rely on intuition in determining the amount of savings they will need for retirement.

It is particularly difficult for retirees to work out how much they should spend each year. The challenges are that they might spend all their savings before they die, or that they might scrimp unnecessarily.

And the situation becomes even more complicated for expatriates. They have added the added complication of how to maintain a pension plan while living abroad.

If I was asked to give financial planning advice to an expatriate planning for retirement I would ask the following questions:

Do you have:

• An existing ‘frozen' personal pension?

• A company pension with an old employer and are concerned about what is happening to company pensions?

• Only the gratuity that you have accumulated whilst in the Gulf?

• Difficulty choosing an offshore bank account as the choice of accounts on offer expands each year, with new products regularly entering the rapidly maturing sector?

Confused? Join the club of the many confused expatriates who have no financial planning in place for their retirement.

Everybody's situation is different but here are some guidelines that all expatriates should follow when it comes to planning for retirement.

• Base your pension investment offshore so that future movements of capital or income are not restricted. Remember that any retirement income you take could be liable for taxation.

• American expatriates and other expatriates that have been relocated to the States are more restricted in what they can do for retirement planning which is based offshore due to the US taxation regime.

• Find a safe place to secure your retirement savings and / or investments so that you can move from country to country if necessary, without having any or minimal negative impact on your assets.

• Go offshore. Offshore pensions providers are usually in well-regulated jurisdictions such as Jersey, Guernsey, and the Isle of Man. The retirement plans that are available offshore are really just savings plans linked to investments, managed by professional fund managers and are generally not subject to the same restrictions that apply to UK and other government regulated pension plans.

In a nutshell with an offshore plan, it's your money and you can take it when you want, retire when you want and contribute what you want.

You simply contribute regular amounts or a lump sum or both into your pension plan and then when you retire, you can take it all in cash or have a monthly pension or any combination of these two options. You could increase or decrease your contributions if your circumstances change.

Alternatively put together a portfolio of suitable investments yourself with a view to providing retirement income.

In conclusion, whether your employer will provide retirement benefits as part of an overall package, or whether it is up to you to make provisions for your retirement, as an expat, it is necessary and desirable to take the international pensions option in order to avoid reduction or fragmentation of your income, and possible confusion in later life.

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