Friday, June 10, 2005

The New Retirement - Work Till You Drop

We were at a party last night, thrown by a colleague of BetterArf's and her husband (the colleague's husband, not BetterArf's, you know what I mean). After only two years in Dubai, they are returning to Aberdeen. The principal reason for this is that they have a mortgage to pay before they both stop working. The husband is paid in US dollars, and the minute they arrived here, the value if the dollar started to plummet. All GCC currencies are pegged to the dollar, and what this means for them that their UK mortgage payments have become massively more expensive as the dollar declines (in fact this would also be the case if he were paid in local currency).

They had expected to be able to save a load of money in Dubai, but the reality has been otherwise. So with about ten years to go until they retire, they are panicking a little, and have realised that they have to return to the UK, and get paid in Sterling to stand any chance of finishing this mortgage.

Also at the party was a 62-year-old lady who is leaving to return to New Zealand. She owns a property there, but will still need a job to provide income so that she can eat, pay property tax, etc. She is very worried about how she will adapt to her new life - she's been in Dubai for 13 years.

Much has been written in the press in the western world about the impending failure of pension funds and endowment mortgages. These will leave many older people with huge debts and no income in their 'twilight' years.

So, for many people, it looks like the new shape of retirement is that there is no such thing. These folks will literally have to work till they die. In the UAE this is not an option for expats. Residence visas are not renewed for people after their 60th birthday, unless they own a business or a residence.

I was talking with a financial advisor a couple of weeks ago, who asked me when I planned to retire. I said I didn't plan to retire. I'm one of those sad gits who lives to work, and the idea of waking up every morning and doing absolutely nothing is one that I really cannot understand. But yes, in less than 20 years' time, I may well feel differently, so we are saving frantically to build up a big enough cash mountain so that we won't have to starve in our twiglet years. It's so boring being sensible.