Will my UAE gratuity cover retirement expenses in my home country?

Residents can check out savings schemes offered by governments in various countries

By Dhaval Jasani/Money Matters

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Published: Tue 21 Feb 2023, 1:06 AM

Last updated: Wed 22 Feb 2023, 5:28 PM

What are the best savings schemes in the UAE? Should I invest in stocks here? Is it better to invest in mutual funds and FDs in my home country than here with higher interest rates? I am 34 years of age and arrived in the UAE last year.

Considering your age, we assume that you would continue to work for at least another 20 years in your occupation, be it the UAE or outside the UAE, which provides you with a longer window for accumulating your savings.


Whilst the UAE offers several savings schemes from bonds to life insurance, you may wish to compare savings schemes available in the UAE and your home country and choose the one that offers better returns with reduced risk.

In terms of your personal portfolio, a combination of savings schemes, bonds, mutual funds, fixed deposits placed with a bank, insurance plan for life or a pension plan for your retirement may be ideal, considering your age bracket and longevity from now till you attain the retirement age.


Investment in stock markets is always subject to market risk and you should thoroughly study the inherent risks associated with any stock or the markets and then decide to invest, based on your risk appetite. You may wish to invest funds in index funds offered in various markets and only invest part of the savings that you endeavour to invest, that you may not recall in the near future.

I have been working in the UAE for 21 years. Should I rely on my gratuity to cover my expenses in my home country on retirement? My net salary is Dh11,500 and I will be retiring next month from the UAE when I complete 60 years of age. I own my ancestral house and my wife is my only dependent.

We are glad to know that you have witnessed this growth story of the UAE playing out while you have been working here. We assume that you intend to spend the rest of your retirement life in your ancestral house, which would save you from any rental expenditure.

Apart from the savings that you may have accumulated to date, gratuity proceeds would provide you additional liquidity in hand. For your living expenses and contingencies, you may retain part of the gratuity proceeds. The rest of the funds at your disposal may be placed as fixed deposits with a reputed bank with the option to pay out interest in support of your day-to-day living expenses or invest part of these proceeds in the form of government bonds that offer interest payout during regular intervals.

Please check out savings schemes offered by governments in various countries, especially for senior citizens, with the aim to maximise interest earnings.

At this age, you may not want to lose part of your capital, while you continue to rely on your life-long savings and gratuity proceeds for the next leg of your life journey.

On a separate note, please do check out for any medical insurance coverage that you may wish to avail for yourself and your spouse.

Dhaval Jasani is a Chartered Accountant and the founder and CEO of ZTI. Views expressed are his own.

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