Investing basics
Table of contents'This article explores how real estate investing for retirement in Dubai can help you achieve long-term financial security'
When we picture retirement, many of us dream of enjoying our hard-earned freedom, traveling, or even just relaxing.
Yet, there is a cloud of financial uncertainty that looms over this dream for many.
With only a few decades of working life, preparing for several decades of retirement becomes a challenge.
When Your Retirement is Not on Track
If your retirement savings feel like they’re falling short, you’re not alone.
For many baby boomers, the dream of a financially secure retirement is slipping away. Nearly 45% fear outliving their savings, according to CNBC Select.
The numbers paint a sobering picture: most boomers have saved only around $144,000 for retirement, and just 40% have managed to surpass $250,000. For those who didn’t invest wisely or start early, the risks of financial strain in their golden years are real, and growing.
But this isn’t just a boomer problem. Younger generations are at risk of facing the same challenges if they don’t plan ahead.
Your Next Step? Start Investing, Not Just Saving
Never underestimate the power of investing, Forbes highlights that three out of four millionaires credit their financial success to consistent, long-term investing. Surprisingly, only 31% of these millionaires had an average annual income of $100K throughout their careers.
The message here? You don't need a six-figure salary to build wealth; you need dedication and strategy.
While the idea of investing may seem vast and intimidating, focusing on proven asset classes can simplify your journey. Welcome to the world of real estate! A domain where tangible assets meet immense growth potential.
A World of Wealth: Dubai Real Estate Investment For Retirement
Real estate in the world’s top cities isn’t just about buildings, it’s about building wealth. And when it comes to top cities, Dubai? It’s like the Beyoncé of real estate: bold, glamorous, and always stealing the show.
So, why should Dubai be your go-to over something like a high-yield savings account? Here’s the scoop:
1. Real Growth You Can See
Sure, savings accounts might look good now with those higher interest rates. But let’s be real—those rates aren’t sticking around. Experts are already saying they’ll dip soon.
Now, take Dubai real estate. You’ve got steady rental returns that often beat what savings account offer, and the kicker? Capital appreciation—the value of your property going up over time. You’re not just parking your money; you’re growing it.
If you’re thinking long-term, especially for retirement, Dubai real estate is the smarter play. It’s got better returns, more stability, and real potential to grow your wealth.
2. Keep What You Earn (No Taxes!)
Here’s a fun fact: taxes can be brutal. In the U.S., for example, if you make money from real estate, you’re looking at a 15% tax. If it’s interest from a savings account? That could be taxed at up to 45% if you’re a high earner (as per Arrived).
But in Dubai? No income tax. No capital gains tax. What you make is what you keep. Simple as that.
Inspired to Start Investing but Don’t Know How?
Here’s how to ease into Dubai’s real estate market:
- Open an account. Platforms like Stake make it easy to start investing in Dubai real estate with just a few clicks.
- Diversify your investments. Fractional ownership lets you invest in multiple prime properties, spreading out your risk while enjoying the benefits of diversification.
- Start small and stay consistent. Even starting with $500 a month (around AED 1,800) can make a big difference over time.
- Be patient. The secret to building wealth? Hold on to your investment long enough to let capital appreciation work its magic.
Ready to learn more about how Dubai’s real estate can boost your retirement plans? Check out our guide to earning a retirement visa through property investment with Stake.
Real Estate Investing For Retirement: Benchmarking Your Investment Strategy
While the above steps can guide you to embark on your investment journey, it's also essential to regularly benchmark the accumulation of your savings from investments. T.RowePrice, a renowned global investment management firm, has provided some age and annual salary-based benchmarks, so take the following as a rule of thumb:
More Insights on Your Retirement Planning Strategy
According to Jacob Lund Fisker's book "Early Retirement Extreme," the essence of early retirement revolves around making your money work for you.
By diligently utilizing a significant portion of your income toward wise investing, you aim to let the returns from these investments handle your annual post-retirement expenses.
Ending Note:
Retirement is a phase of life where financial stability is paramount. But reaching this stability doesn't necessarily require a top-tier income.
A comfortable retirement is attainable through consistent investing, effective planning, and diversifying into asset classes like real estate. Remember, the key is not to delay and start today.
