Dubai - It’s an oft-repeated question, how much do you need to save to retire? Unfortunately, there is no one right answer to that because when it comes to retirement, every person is different. Some may want to retire early and own a luxury villa or travel the world, while others may want to quit at 65 and live a simple life.

Retirement strategies also vary greatly depending on where the individual wants to retire or how expensive the living costs are going to be. Also equally important is where the retirement money  is invested.

“The amount of money required in retirement will very much depend on individual circumstances,” explained Paul Evans, head of region, Middle East and Africa at Old Mutual International.

“[A financial adviser] will take into account factors, such as the age you plan to retire, how long you expect your retirement to last, where you plan to live, what you expenses might be, what you plan to do in retirement, and what your future costs might be,” Evans said in an email sent to Gulf News.

If the goal is to have at least Dh1 million stashed away in the retirement pot, setting aside a fixed amount per month may just work out well for some retirement savers in UAE.

According to Evans, if the expatriate is 35 years old, the required monthly contribution to have Dh1 million by the age of 65 might need to be around Dh1,200.

For those who are 45 years old and want to retire at 65, the monthly savings goal is higher, and they need to set aside approximately Dh2,500 per month.

Expatriates who start saving very late, say, at the age of 55, will have to work hard to save Dh6,500 every month. Evans, however, clarified that the savings goals shouldn’t be taken as a one-size-fits-all strategy that everyone must follow. The suggested monthly contributions will only grow to Dh1 million if the money is invested and it achieves a net growth rate of 5 per cent.

“[What this shows is] how significantly monthly contributions need to increase by if you delay starting to save from your 30s til you 50s,” he explained.

To get the most out of retirement savings, it is highly recommended that expatriates don’t let their money sit idly in a savings bank account. “It can be very difficult to get decent returns from cash savings accounts. You may have to consider investing,” said Evans.

“If your retirement is still a long way off, then you may be in a better position to take the risks that investing involves."

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