Planning to retire overseas
Planning to retire overseas! Sounds like an exotic idea. People who live most of their life in cold or temperate countries and who can afford a retirement abroad often wish to move South, closer to the sun, to spend their days under the golden rays. Those who prefer to stay in Europe relish the idea of retiring on the Riviera, but during the past decade, we have seen many retired couples moving 20 degrees south to the peaceful island of Mauritius, bathed in the sun and surrounded by sandy beaches.
On the other hand, many others retire overseas for family reunification reasons. The destination is then wherever the children have decided to be.
Familial ties are a motivator of overseas retirement
Middle-class and upper-middle-class African families are often not seeing their children coming back to the continent after university. As a large number of them study in the UK, Europe, Australia and North America, they often get a job overseas and hesitate to take the road back home. Once they marry and have children, home is no longer Africa for most of them. With a precarious situation in some African countries, parents and children often feel the desire or even the need for family reunification, not in Africa but where the children have settled down. For some of these families, it is a return out of Africa after a few generations.
Retire overseas with no financial worries
However, no one wants in their old age to financially burden their children. Parents are the ones who proudly brought up their children and financed the studies that make them successful citizens of their new country. So it is not a comfortable situation for moms and dads to lose their financial independence in their old age for family reunification reasons. Even if they have sufficient monthly income to live overseas, they must also be able to maintain the high standard of living they’ve been used to by having their apartment or villa if they wish to. They could choose between 2 apartments in a condominium in a big city, or, for pretty much the same price, 2 beautiful villas side by side on a golf course facing the azure blue lagoon of Mauritius, always with the warmth and serenity that only family ties can provide.
Planning your retirement is a must
For our clients living in Africa today, some wise planning is required. Why? Simply, because many are earning income in a weak, poorly-convertible currency, that there are restrictions on how much hard currency one can remit overseas and buying or renting a residence overseas can be very expensive. This is why families have to decide as early as possible on whether they are likely to relocate overseas. They may not be certain yet as to which country the children may relocate to or where they may retire. But, they must adopt a legitimate and disciplined approach of converting their local money into foreign currency and remitting the same on a regular basis into an investment product that can accumulate returns tax-free over the years. In case foreign retirement never arises, no one loses money in repatriating the funds home years later – the probable foreign exchange gains will be very significant in the long term anyway.
Plan your retirement with NWT
We have assisted many families in Africa and Asia for whom we act as Trustees with private wealth management tools that enable them to save for their retirement overseas.
NWT is licensed by the Financial Services Commission in Mauritius and by the Association Romande des Intermédiaires Financier (ARIF), a self-regulatory body approved by the Swiss Financial Market Supervisory Authority (FINMA) in Switzerland.
If this editorial speaks to you, do not hesitate to reach out to us.
Ganessen Soobramanien
