Summary
How much money do I need to save to retire as an expat?
To Retire Abroad, How Much do I Need?
Many often wonder if the real question is “How long is a piece of string?” It’s often the first thing that comes to mind when someone asks how much they’ll need for retirement. But the truth is, there’s a simple starting point that works well for most people.
Take the annual amount you’d like to have in retirement – then multiply it by 25. So, if you’d like an income of £50,000 a year in retirement, you’re looking at building a portfolio of around £1.25 million.
This is based on what’s known as the 5% rule – the idea being that if you withdraw no more than 5% of your total portfolio each year and stay invested, you’ll never run out of money. That’s the foundation I work through with every client to get to their “magic number.”
It’s All About Reverse Engineering
Once you’ve got that rough target, we work backwards. If you’re aiming for £1.25 million, we look at what you already have, how long you’ve got until retirement (your time horizon), and what the shortfall is. From there, we build a savings and investment strategy to close the gap.
This is what planning to retire abroad is all about – understanding where you are now, where you want to be, and the smartest way to get there.
Do you have enough to retire abroad?
But Don’t Forget the Debt
There’s one thing to keep in mind if you’re planning to follow the 5% rule: it only works if you retire debt-free. That means clearing credit cards, mortgages, or any other liabilities before you stop working. Otherwise, the income you’re drawing will be spread too thin.
The Lifestyle Factor
During your working years – what we call the accumulation phase – you’ll want to think carefully about the lifestyle you hope to maintain in retirement. Will you want to travel? Support children or grandchildren? Own a second property? These decisions directly impact how much you’ll need to save.
Everyone’s vision of retirement looks a little different, which is why there’s no one-size-fits-all number.
Global Considerations for Expats
As an expat, your retirement planning often involves multiple currencies, jurisdictions, and pensions. You might have UK pensions, overseas accounts, and income in different currencies. Understanding how to consolidate or coordinate these is key to securing a reliable income later in life.
It’s also important to consider where you’ll retire. If you plan to retire abroad, you’ll want to make sure your retirement income is structured to work efficiently across borders. And if you plan to return to the UK, make sure your plan includes strategies for repatriating funds in a tax-efficient way.
The Bottom Line
Retirement planning as an expat means thinking globally and planning carefully. It’s about:
- Knowing the number that gives you freedom
- Understanding your income needs and goals
- Building a strategy that can adapt if you move
Not sure what your number is – or how close you are to reaching it?
Take our free Financial Health Check. It only takes 15 minutes and gives you a clear picture of your finances today – and what’s possible for tomorrow.
About Three Sixty Financial
We help British expats across Asia get a clearer view of their finances, with honest, straightforward advice on everything from pensions to international investing. Our approach is impartial, fee-based and personal. Whether you’re a few years from retirement or just starting to think about it, we’ll help you build a plan you can trust – wherever life takes you.
Next Steps: Stay Informed
- Join our Expat Financial Insights Newsletter – Get expert tips and financial updates straight to your inbox.
- Follow us on LinkedIn – Stay up to date with financial trends affecting expats.
- Book a Free Consultation – Speak to an expert about your specific financial situation.