Protect Your Position -Expat retirement planning in your fifties

Retirement planning as an expat in your fifties is crucial as this life stage represents a critical transition towards stopping work and relying on the wealth you have accrued throughout your life.

As you approach this milestone, your financial goals, risk tolerance, and investment priorities may undergo significant changes. While accumulating wealth has been a priority, as your retirement nears, a strategy that considers wealth protection alongside growth is now more vital than ever.  

Jonathan Lumb, Senior Financial Planner and Regional Manager at Skybound Wealth with over 20 years' experience of helping expatriates achieve their investment goals looks at how, and why it's important to protect your position as an expat in your fifties planning for retirement.

Changing Risk

Your risk tolerance often changes either with age, your life circumstances, or both! What may have seemed an acceptable risk in your thirties or forties may no longer be suitable as an expat in your fifties. Failing to factor this into your portfolio when planning for retirement could have both a financial and emotional impact on your investments.

Reducing exposure to high-risk assets can help safeguard your savings from potential market volatility and is vital to ensure you have enough funds to meet your post-retirement needs.

Keeping Emotions Under Control

Investing can be pretty emotional because, well, we're human! Our feelings can pull us in different directions when we see what's happening in the market. It gets tricky because sometimes the best move is the opposite of what our gut tells us. When things are going well in the market, it's easy to feel good about it.

But, when things go wrong such as suffering from a market slump closer to retirement, the emotional implications could lead you to make rash decisions and sell, compounding your losses.

During this stage, the rollercoaster of emotions tied to investing can be particularly intense. Every market fluctuation might feel like it has a direct impact on your retirement plans. The temptation to chase high returns can be strong, especially if you feel like you're playing catch-up. But at the same time, the fear of losing what you've worked so hard to accumulate can be equally powerful.

It's a delicate balance, navigating these emotions while making sound financial decisions. That's why it's crucial to consider a more conservative approach as you approach retirement age, focusing on protecting what you've built rather than chasing risky gains.

Limited Time For Recovery

Unlike earlier in your career when you had several decades to recover from market downturns, as an expat in your fifties planning for retirement, you have a much shorter time to recoup potential losses.  Any losses caused by market downturns or unexpected expenses can be difficult to bounce back from when time is against you.

Expats in their 50s should consider the tax implications of their portfolio for several reasons;

Tax considerations are essential for expats in their fifties when planning for retirement.  Whether it be ensuring your retirement income streams are tax-efficient, understanding tax treaties and regulations to help avoid double taxation, or factors such as capital gains and dividend taxes.

Depending on your country of residence and citizenship, you may be subject to different tax regulations. Reviewing your investments as an expat in your fifties is the perfect time to make the necessary changes to ensure your portfolio is optimised for both where, and when you plan to retire and ensure compliance with relevant tax laws.

The Importance Of Professional Advice

Some expats in their fifties may feel they have accrued enough wealth and attempt to manage their retirement savings without seeking professional advice. However, navigating complex financial decisions, such as retirement planning, asset allocation, and withdrawal strategies, can be challenging without expert guidance. Working with a qualified financial adviser can help investors avoid costly mistakes and develop a comprehensive retirement plan tailored to their individual needs and goals.

About Jonathan Lumb Senior Financial Planner and Regional Manager at Skybound Wealth

Having worked in the U.K., Australia and the Middle East, Jonathan has the experience and understanding to assist clients with financial planning advice and security on a domestic and international level. Using his experience and knowledge, Jonathan works alongside you to create and implement a comprehensive financial plan designed to ensure your long-term ambitions becomes a reality and your future lifestyle is protected.