(MENAFN- Khaleej Times) More than 82 per cent of UAE residents believe that allocating up to a fourth of their monthly income is sufficient for their future retirement plans, a survey has found. Most of the residents were, however, concerned about financial comfort in retirement.
The survey by market research company YouGov, commissioned by Zurich International Life, found that more than 61 per cent of respondents expressed apprehensions about their financial situation post retirement.
The survey found that only 4 per cent residents currently invest through a retirement savings plan. A majority opt for gold (50 per cent) and real estate (47 per cent).“The dominance of gold and real estate investments suggests a cultural affinity for tangible assets and a preference for investments perceived as stable and appreciating over time,” the company said.
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Multiple studies have found that residents depend too much on their end-of-service gratuity as a retirement fund. Rupert J Connor, partner, Abacus Financial Consultants, had told Khaleej Times that the gratuity should not be considered a pension substitute.
“With almost no or minimal savings among a large portion of UAE residents, retirement saving remains a major issue for many expatriates who face the consequences of inadequate financial planning later in life,” he said.
He highlighted how retirement years can potentially last for well over 20 years.“So, the amount received from a gratuity payout cannot sustain a similar lifestyle through those years, unless one is particularly frugal.”
According to the Zurich study, residents are now looking to retire as early as 50.“Our latest survey shows that 73 per cent of working individuals in the UAE aim to retire between the ages of 50 and 65. The earlier you plan to retire, the more important it becomes to plan ahead, ideally through a dedicated savings plan, to ensure a stable financial future,” said Taru Singhal, head of Retail Distribution at the company.
For retirement goals, the desire to start a business emerged as the top priority for 44 per cent of respondents.
Up to Dh25,000 in bonuses?
About 68 per cent of respondents anticipate receiving a bonus this year, compared to 48 per cent in 2023. About 77 per cent of those who expect a bonus are hopeful of getting up to Dh25,000 this year.
Among respondents, saving for children's education was the top priority for 37 per cent, with holiday spending at 34 per cent. Only 22 per cent prioritised saving their bonus money for retirement.
Retiring in the UAE
Almost 7 in 10 expressed a desire to retire in the UAE.“Younger UAE residents between 18-24 years show a strong inclination towards retiring in the UAE (89 per cent), underlining a growing belief in the country's economic future, the allure of its dynamic lifestyle and career opportunities, and challenging traditional notions of retirement abroad,” said the company.
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