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Financial advisors are often asked by oil & gas professionals to recommend the most suitable retirement plan for their needs. Unfortunately, there is no one-size-fits-all plan which is suitable for everyone. Oil & gas professionals require bespoke planning due to the volatile nature of the industry.
An advisor will begin to paint a picture of your circumstances by asking the following questions…
Many oil & gas professionals move to the UAE to earn a higher salary. With that in mind, when you eventually leave, it is possible your income will decrease. The industry is famous for being highly volatile due to the fluctuating nature of oil and gas prices. This volatility frequently has an industry-wide impact on people’s job security. Therefore, for oil & gas professionals, it is important you are introduced to a savings vehicle which has inbuilt flexibility.
2. Where are you planning on moving next?
Many oil & gas professionals leave the UAE and continue to work for several years in other destinations such as Aberdeen, Houston, Calgary or elsewhere in the Gulf. A retirement plan must allow you to change currency for future instalments.
3. Where would you like to eventually retire?
When planning your retirement portfolio, you need to be conscious of certain taxation laws which might impact you in the future. With that in mind, a suitable retirement plan will need to be tax-efficient in destinations you are intending on living in.
If you’re not sure where you’d like to retire yet, an advisor can talk with you about certain destinations which have favourable tax treatment for retirees, for example Portugal.
4. What is your nationality?
Certain nationalities are taxed not only on their worldwide income but also on growth achieved within investments, irrespective of where they are held. An advisor will need to ascertain the most appropriate plan with your residency and citizenship in mind.
5. What assets do you already have in place?
An advisor will need to gain an understanding of your current assets. You may have pensions in other countries which you may wish to review. Moreover, you may have a range of different assets including property which will build part of your overall retirement portfolio. An advisor will strive to help you meet your retirement objectives with diversification, through the use of multiple asset classes.
6. How long do you have until retirement and how much do you need?
Perhaps the most important question of them all. Advisors ask this to uncover how many paychecks you have until retirement. For an advisor to construct a suitable retirement strategy, they will need to analyse where you are now, where you want to be, and how long you have to achieve your goal. The recommended investment approach will be underpinned by this calculation to give you the best chance of reaching your objectives.
Many oil & gas professionals have, for some time now, complained about wages not rising in line with inflation, it is important whilst your wages may not be increasing, your investments are.
Remember: by simply leaving money in the bank you are guaranteed to lose around 3% each year.
Once an advisor has satisfactorily built an understanding of your circumstances and requirements, using the questions above, along with completing a more in-depth financial questionnaire, they will be able to suggest the most appropriate solution for your needs.
This approach demonstrates the value of advice, if you simply select a product on your own, it can be difficult to know if you are making the right decision with regards to tax, compounding and diversification.
To request a complimentary financial planning meeting, please click on the link below.