retirement planning for Australian expats

Retirement planning for Australian expats

A major motivation for accepting overseas postings is a 28% rise in income. (Source: HSBC Expat Explorer Survey 2019)

What is equally interesting is more than half of the expats surveyed are focused on saving for retirement. It is probably a wise move given the global economy has grown more uncertain.

In itself, retirement planning is tedious. For expats, transnational financial laws and regulations, like taxation, adds to the complexity. However, working with experienced and knowledgeable professionals, especially in Australian tax, can mitigate the unknowns and uncertainties.

What should you consider in your retirement planning?

1. Where you will be

An increasing number of expats continue to live overseas in retirement. In some cases, they may have started a business in the country they’ve been working in, or elsewhere.

If you plan to live abroad in retirement, it is imperative to work on your financial plans as early as possible. Ensuring you build a healthy portfolio to have a steady income stream, wherever you are, is important.

A basic consideration that is often overlooked is currency fluctuations and inflation. A financial planner familiar with expatriate tax returns, for example, will alert you to these in your retirement planning.

If you’re planning to move back to Australia, what strategy should you take with your overseas pension funds>? Should you simply draw a pension from your overseas fund, or should you take a lump sum withdrawal? Should you bring the money back to Australia and if so, should you keep it yourself or contribute it into An Australian superannuation fund?

These are all important questions to consider and as such it’s highly recommended that you seek both tax advice from an accounting firm that specialises in expatriate tax and retirement planning advice from a financial planning firm that specialises in financial planning for Australian expats.

What’s even more critical, is that your expat tax accountant and your expat financial planner are able to work together to coordinate and craft a plan that makes sense and is as tax-efficient as possible

2. Tax

Tax-planning is crucial and complicated at the same time. The latter is accentuated by the fact that systems vary across borders. Not factoring them into your retirement plan can cost you dearly.

Working with accountants and financial planners familiar with Australian tax returns help. They have the knowledge and experience to help you navigate the systems, locally and the country you live and work in.

A well-crafted tax plan crafted by an accountant experienced in expatriate tax matters, is a worthwhile investment. It is an essential component of your retirement plan.

3. Investments

From simple saving instruments to property-to-lease, your choice is limited only by your investment appetite.

As an Australian expat, your choices are not limited by what’s available in Australia. Having a strategy to manage your investments across borders helps to protect and grow them.

An expat’s life is rewarding. But it is also hard work. So, take steps now to enjoy the fruits of your hard-earned income in retirement.

If you have any questions or if you need assistance with your Australian taxes (tax advice and/or tax returns), book an appointment with our team today.

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Shane Macfarlane

CEO & Founder at Expat Tax Services
Shane's an Australian Chartered Accountant and Australian expat tax specialist who's also an expat himself (based in Asia). Shane's passionate about tax and legitimate tax minimisation, tax-planning and structuring, particularly as it relates to Australian expats who are often subject to high rates of tax back home in Australia.
Shane Macfarlane
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