Despite being the most expensive global city, moving to Singapore is an exciting opportunity for expats. A multi-cultural melting pot, it is a wonderful place to live and a central hub for exploring Asia.
Good financial planning can make your stay even sweeter – but bad (or no) planning can quickly see it turn sour.
And it is more than just the management of money.
It is a balance between enjoying life today and having the money you need to be secure in later life, while at the same time ensuring that you and your loved ones are protected against unforeseen events which can derail life’s journey.
Key questions
There are many questions expats need to consider, in addition to somewhere to live, a school for the children and a local bank account.
Some of these include:
- Is my life insurance cover from home still valid? Am I paying for something each month that doesn’t cover me while resident in Singapore?
- Property is expensive, should I consider short-term, long-term, or purchasing as an investment?
- How can I maximise the value of my savings?
- As an expat, am I free of all taxes from home?
- What happens to my children if anything were to happen to me?
- Is my Will written at home valid in Singapore?
- If I need to send money home, what is the best and most cost-effective way to do so?
- Is my pension on track?
Meet the Cunninghams
Ben, 54, recently moved to Singapore with his wife Emma and his two daughters, Stacey aged 18 and Serena age 16.
This is the British family’s second overseas posting, Ben having worked as head of location in Australia before moving to Singapore as regional chief executive.
As a seasoned expat, Ben understands the importance of effective financial planning and has arranged a consultation.
Protection
Realising that he will not benefit from either Medicare or a National Health Service in Singapore and that his employer’s medical cover is limited, Ben wanted to ensure that the cover he and his family have will cover them for all eventualities. He arranged comprehensive medical insurance for himself and his family.
For the last 10 years Ben has relied on insurance in his Australian Super to provide protection for his family should he die. As he is no longer resident in Australia his cover is no longer valid and so Ben and Emma have arranged new life and critical illness cover, in trust to ensure that the proceeds are not subject to UK estate taxes at 40%.
As well as helping Ben and Emma set up a bespoke protection plan, a qualified adviser also assisted the family in checking that their Wills were still valid and arranged for Stacey to be temporary guardian for Serena should both Ben and Emma pass away before Serena is 18.
Savings and Investments
With both daughters fast approaching university age, the family also consulted their adviser about education fee planning, as well as advice on which overseas university would be the most suitable.
Taxes
While an expat, Ben can benefit from the low tax rates in Singapore allowing him to enjoy a more varied and active life while at the same time saving more towards retirement and his other goals.
Although Ben and Emma are no longer subject to UK taxes on their income and gains, they are still UK domiciled meaning that up to 40% of their wealth could go to the UK tax authorities after their death.
As there are steps that can be taken to mitigate this, Ben and Emma have asked their adviser to assist with their Estate and Succession planning.
Retiring
Having worked in the UK, Australia and now Singapore, Ben and Emma have built up a variety of different retirement plans.
Finding it difficult to see what these plans can do for them, Ben and Emma have asked their adviser to undertake an audit of their UK pensions and Australian superannuation to make sure that they make the most of the accumulated funds.
Now, only eight to 10 years from retirement, Ben and Emma have used their advisory firm’s expertise to help them decide where they should retire and, through detailed cash flow modelling, what they need to do to be able to enjoy the lifestyle they want.
Summary
Financial Planning is a journey, not an event. Your adviser is a trusted companion on the journey who is trained to help you overcome the obstacles life throws at you and still achieve your goals.
This article was written by Ian Black, head of financial planning and wealth solutions at AAM Advisory. He overseas AAM’s wealth planning for Singaporean and expat high net worth individuals. The firm was recognised as the Best Adviser Firm in Singapore 2018 in the International Adviser Best Practice Adviser Awards, run in partnership with Old Mutual International.
