Matters of Life and Debt
In her 20’s Caroline dreamt of an international career. She loved traveling, exploring new cultures, learning something new, and pushing boundaries of potential. While Caroline is a real person, I’m using that name as an alias to respect her wish for anonymity.
Determined to live the life of a global nomad, she got her breakthrough with a consulting job in London at the age of 30. The sky was the limit; she ran an international career alongside building a family life, moved across regions, building projects and business in Europe, Middle East and Africa. She wouldn’t change any of it, she says, “I worked hard, played hard and built a fantastic network of friends and collaborators whilst balancing career and personal life. Tough and enjoyable”.
In hindsight
Little did she know that when she turned 60, she would face a complex paper trail of national bureaucracy across countries and regions to plan the claim for her hard earnt pension. Different countries have different rules, different years one can claim pension, all of which require different paperwork.
Caroline’s story is an awakening for many in early international careers to keep an eye out for their future selves. It may seem to be a distant future where everything is possible, and that money will flow to safeguard savings and investments for a lifetime.
It requires intentional financial and personal planning. One piece of advice is to intentionally look at the consequences on future pension savings with every career step.
Understanding pension systems
Understanding both national and private pension systems is essential for global nomads to ensure long-term financial security. Looking at national or private pensions for our 50s or 60s, rather than at each career or job change, is a tough lesson, because then, solutions are limited.
Governments are smart in creating loopholes granting them the power to refuse or limit pension payments, unless “you had an early warning system with them on your life/work choices”, a quote sourced from Caroline’s real-life experience.
Unlike traditional career paths with stable employer-provided pensions, the global nomad lifestyle can be fragmented, leading to gaps in your retirement contributions if not managed intentionally.
National pension systems usually depend on continuous contributions within a specific country. A global nomad might work a few years in the UK, a couple more in Germany, and then move on to Singapore or the UAE. Each of these countries has its own pension rules, contribution requirements, and retirement age.
Some may have bilateral agreements allowing you to transfer pension rights between systems, but many do not. Without a clear understanding and documentation, there is great risk losing access to pensions, or receiving only partial benefits.
Private pension plans offer a layer of flexibility that national schemes often lack. These are especially useful for global nomads who can’t count on long-term participation in one country’s national system. Opting for an international retirement savings plan or a private pension to contribute to, regardless of location, is a smart strategy. Part of that strategy requires one to seek plans that allow multi-currency investments and low fees, and that remain portable between countries.
An important consideration taken from Caroline’s story is employer-sponsored plans, if employed abroad. Some international companies offer retirement benefits that remain valid globally. Understand the vesting period and portability of such benefits before moving on to the next role.
Every country has its own tax laws regarding pensions, both in terms of contributions and withdrawals. It's crucial to understand the tax treaties between countries, especially when selecting which country to retire in.
Work for a future you control
Ultimately, understanding pensions is about owning one’s future.
The global nomad lifestyle can be empowering, but it also demands more in terms of financial literacy and foresight. Whether planning to settle down eventually or live a life of continuous exploration, retirement should mirror mobility and security of one’s career.
Take charge early. Learn how pensions work, track contributions, and invest in portable plans.
Caroline has learnt a lesson the hard way.
Your future self will thank you.
Cleopatra Kitti is the founder of QueensOfMoney, a finanical literacy platform dedicated to empowering people, particularly women, in their mindset on financial activity and personal financial management. Not as advice, but as a platform of education. For more, visit QueensOfMoney.