An Ultimate Guide to Investing in a Retirement Plan in the UAE

Saving and investing for your retirement can help you maintain your lifestyle and turn your old-age days into a golden period. Retirement is one of the critical events that most of us will experience sooner or later in our lives. From a financial perspective, we must start planning our finances in order to retire comfortably. 

As it involves complexity and time for an investment to grow and make profits, starting at an early age is the best idea. It takes sensible planning and years of persistence to plan a successful retirement. Even if you are there at your retirement age, it needs to be constantly taken care of as an ongoing responsibility. 

Most people just prefer saving funds in their bank accounts rather than investing them in high-risk investment options. In this post, we will share a few effective tips on simple investments for a sound retirement. 

Tips to a Successful Retirement Planning in the UAE

The sooner you start planning your retirement, the better it turns out to be. The amount that you need for sound retirement differs from person to person. However, here are a few tips to help you figure out how much you need to save. 

1. Discover Your Expected Retirement Age

Before you start planning your retirement, you must know how much time you have between today and your retirement day. This could be an effective initial strategy to come up with a useful investment plan. The longer time you get to plan and implement, the higher the level of risk you can withstand. For instance, if you have over 30 years until retirement, you can consider going for riskier options like investing in stocks and bonds. The factor that plays a critical role here is ‘time’. The idea is to have enough time to gain returns and outpace inflation, so you maintain your purchasing capabilities active even during retirement. 

2. Determine Retirement Spending Needs

To define the required size of your retirement portfolio, you must have an idea of post-retirement spending needs. Most people assume that their spending after retirement will reduce 20 to 30 per cent of what they spend currently. In some cases, such assumptions have proven to be unrealistic, especially in the event when unforeseen medical expenses arise at an older age. Most retirees spend their initial retirement years in travelling and achieving other bucket-list goals. In order to have enough savings, you must target a ratio closer to 100 per cent. 

3. Calculate Your Net Worth

Your net worth is a number that lies between the assets that you own and the liabilities that you owe. You must first analyse the amount you have in your hands. 

What you own includes:

  • Investments such as mutual funds, stocks and ETFs
  • Cash in hand including funds in your bank accounts, fixed deposits, cash deposits, treasury bills and other cash equivalents
  • Real estate properties including your home, second home and other rental properties
  • Personal properties including vehicles, jewellery, boats, collectables and household furnishing

And what you owe, on the other hand, includes debts such as:

You can subtract your liabilities from your assets to calculate your net worth. With this number, you can have a fair idea of where you stand and how you need to go about your future investments. You must track your net worth once a year so that you head in the right financial direction. This helps you to stay on track with your retirement goals. 

4. Understand Your Retirement Investment Options

In the UAE, banks, insurance companies and other financial institutions offer attractive retirement investment options. These options include bank account investments, fixed deposits, mutual funds, bonds, cash investments and many others.

Here is a list of investment options you can consider when planning your retirement.

  • Mutual Funds: Mutual funds are a pool of funds collected from investors to invest in securities like bonds, stocks, shares and other such instruments.
  • Stocks: Stocks are also called equities as they represent the ownership in the organisation that issues them. 
  • Bonds: Bonds enable investors to lend money to an issuer and earn reasonable interest rates with a future face value of the bonds.
  • Annuities: Annuities are insurance plans that allow policyholders to create a source of annual, quarterly, monthly or lump-sum income during retirement.
  • Fixed Deposits: Fixed deposits enable investors to deposit a fixed amount for a fixed/flexible term and earn reasonable interest on the same for a specific time period.
  • Bank Accounts: Some people who do not want to take investment risks prefer bank account investments. They deposit their savings in their preferred bank account and earn interest on the same.
  • Cash Investments: The investors can also lend cash in exchange for attractive interest rates.
  • Exchange-Traded Funds: These are the stock investment options that deal in commodities, indexes, etc.

5. Start Saving and Investing Early

You must start saving early, no matter what type of bank account you open or which investment option you choose.

Here are the main reasons why you must start saving and investing at an early age.

  • Saving becomes your lifelong habit and enhances your odds of a sound retirement.
  • It offers more time to cover the losses, and you can choose the investment options with higher risk possibilities.
  • You get more years to save, which means you have massive funds by the time you retire.
  • It helps you gain more experience and develop expertise in different investment options.

The investment you make at the age of 20 years helps you gain more profits than the one you make at the age of 40, even if it grows conservatively by 5 per cent every year.


Make sure you keep your emotions in check when investing. Sometimes your investments get influenced by your emotions in a way that you don’t even realise. Underestimating risk and making bad financial decisions due to overconfidence represents the typical pattern of emotional behaviour.

Investments surely open a lucrative path to a comfortable retirement. However, you must also be open to the fact that not every investment will turn into huge profits, making you a winner. Make sure you are realistic and be mindful of your wins and losses. Contact our experts anytime to discover suitable investment options based on your financial preferences if you have any doubts. We at Policy Bazaar will help you determine your financial needs and suggest the best-fit investment options accordingly.

More From Bank Accounts