Being an expat in Singapore provides many opportunities when it comes to planning, but at the same time, provides some level of uncertainty surrounding what you would have been used to in your home country. You may have had free medical care back home or would have been paying into a government retirement scheme, but now some of those benefits are no longer the case overseas.
Here we look at some of the key financial tips to making the most of your time in Singapore beneficial.
Write a budget – this may sound like stating the obvious, but it is a great way to get a snapshot of money coming in and going out, especially now that the daily cost of average items has changed.
Have an emergency fund – this should be set aside to cover those financial surprises life throws at you, property repairs back home, family, or medical needs, or even a dental emergency. Usually three to six months of expenses is recommended and keep this in a sperate savings account, so you aren’t tempted to spend it.
Insurance – check your life insurance cover is fit for purpose. Do you have cover from your home country? If so check that you are still covered now you are living full time overseas. If your circumstances change; marriage, growing the family or a property purchase, these will impact the level of cover you may have had, or may now require. It is always good to review your cover on an annual basis. Also making sure that you have critical illness cover should be a priority and should be reviewed on a regular basis.
Tax – working in Singapore may mean you will pay lower income tax than you may have done previously. This presents a great opportunity to build your wealth whilst you are overseas. Income tax is not taken at source, so you also need to remember to factor this into your budgeting / planning. Also, your tax status in your home country may need to be clarified, to ensure you don’t pay unnecessary tax in either jurisdiction.
Retirement – “Come for 2 years stay for 10 years!” We often find this to be the case when we talk to clients who have been in Singapore a while. When looking at your retirement planning, consider the cost of delay: not paying into a pension plan for even 2 years, could have an impact, but can you imagine if you missed out on 10 years’ worth of pension savings!
National Insurance Contributions (NICs)- If you moved here from the UK, are you still contributing to your National Insurance? You need to contribute at least 10 years of NICs to receive some state pension and you need to pay in for 35 years to receive a ‘full’ state pension at normal retirement age. You may be able to top up using voluntary NICs whilst overseas.
Wills – Do you have a will in place? A Singapore Will covers both movable and immovable assets in Singapore. It allows ease of obtaining probate and distribution in accordance with your wishes. If you are an expat with children, you should set up a Temporary guardianship letter. This person will be your children’s temporary guardian until such time as their legal guardian arrives. If anything should happen to you and you do not have one in place, your children may go into care until the legal guardian stated in your Will arrives.
AAM Advisory offers a holistic approach to managing your wealth and finances. Our Wealth Managers are totally focused on your needs and goals to devise the perfect wealth management solutions for you.
If you would like to arrange a meeting with one of our wealth managers to discuss any of these tips further, please email [email protected]
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