Expats must embrace financial planning more than counterparts ‘back home’
I was recently interviewed to put the case forward that expats need to embrace the idea of financial planning more than their counterparts in their country of origin.
Although living abroad usually positively impacts people’s lifestyles, sometimes there are extra layers of complexities, making professional financial advice all the more important for those of us who choose to live overseas.
I suggest that expats should centre their financial planning attention around four main topics: tax which includes the impact of savings and investments, retirement planning, education planning, and international insurances & healthcare.
Tax affairs, savings and investments
It is important, that expatriates establish where they are classified as a ‘tax resident’, so they know in which country their tax liabilities lay and how double taxation agreements could impact on their fiscal obligations.
Additionally, I advised how expats should ensure they use their international status to their financial advantage. For example, how they might be able to mitigate the effects of excessive inheritance tax regulations and how they could benefit from savings and investment products that are typically designed for mobile expats.
The importance of planning retirement when living overseas as there might be additional questions that need to be asked, such as where you will reside once you retire, and how you can access your pension in the most tax efficient way whilst overseas.
SIPPS & QROPS are identified as important parts of retirement strategies for many expats.
Education and healthcare
As schooling children overseas is generally more expensive, compared to doing so in your own country, and as healthcare is often not available or free, and because expats can use some efficient ‘tools’ to build up pots to fund them, I recommended building these two factors into a financial plan.
How to select a financial adviser?
I was also asked about how expats should go about choosing a financial adviser. My advice, for both those who are considering moving overseas and for those who already are residing abroad, would be to opt for an advisory company which has a history of working with expats as those who live/work abroad have very specific requirements and available opportunities when it comes to maximising and safeguarding their money.
In addition, it’s imperative that your adviser is someone you trust and with whom you can build a steady rapport.
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Mike Coady is an award-winning financial expert and a well-known leader in the financial industry.
Having taken two of his previous firms to Chartered Status in the UK and also achieved the prestigious National IFA of the Year Award – Highly Commended.
Mike is qualified to UK Financial Conduct Authority (FCA) standards, a member of the Chartered Insurance Institute, a Fellow of the Institute of Sales Management (FISM), and a Fellow of the Institute of Directors (FIoD).