Expats must embrace financial planning more than counterparts ‘back home’
Recently, I was interviewed by iExpats, a website offering financial news and information for expatriates, to put the case forward that expatriates need to embrace the idea of financial planning more than their counterparts in their country of origin.
I commented that although living abroad usually positively impacts people’s lifestyles, sometimes there’s an extra layer of complexities, making professional financial advice all the more important for those of us who choose to live overseas.
In the article, I suggest that expats should centre their attention around four main topics: tax which includes investments and savings, retirement planning, education planning, and international health care.
Tax affairs, savings and investments
It is important, as I highlighted in the report, 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 only available for expats.
The iexpats.com feature covered the importance of planning retirement when living overseas as there might be additional questions that need to be asked, such as where will you live once you retire? And how can I access my pension in the most tax efficient way whilst overseas?
QROPS were flagged-up as an important part 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 and/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, I suggested working with a firm which has local offices to where you will be/are living but which is backed up by a large, well-established corporation; and also I said it’s imperative that your adviser is someone you trust and with whom you can build a steady rapport.