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Deciding to retire abroad is an important lifestyle choice and you will want to maximise the opportunities that this brings. If you are currently living in the Gulf then perhaps you are planning to retire back to the UK – or possibly to another European country with a better climate!

We can expect to live longer than previous generations, hopefully with a better quality of life. If we are blessed with good health then retirement can be a wonderful time of life, free to spend time with our grandchildren and to travel. But can we afford it?

Our longer lives present challenges for us personally and for our governments. How can you assess whether you are on track to enjoy a retirement as comfortable as the life you are used to?

Here are some key considerations:

Cost of living and inflation

The impact of high levels of inflation on the cost of living has been the news story of the last year. Even if inflation falls, its impact compounded year after year will seriously affect the spending power of anyone on a fixed income.

Say, for example, you spend €5,000 a month. Assuming an inflation rate of 3% a year, in 10 years’ time you could need €6,720 a month to maintain the same spending, and €9,030 in 20 years. To maintain your standard of living your investments must grow by the same amount.

Will your savings last?

You may be looking to fund a retirement of 30 years or more. ‘Low-risk’ investments like bank deposits are often favoured by retirees but these may not keep pace with inflation.

As a British expatriate you also need to consider exchange rates as currency movements may affect your spending power if your pension is paid in sterling.

It is always best to seek specialist advice: by following some key investment principles you can aim to invest your capital in such a way as to keep pace with inflation whilst keeping risk at a level you are comfortable with. First establish your risk profile and identify your needs and investment objectives. Then look to build a well-diversified portfolio to suit your individual circumstances. Exchange rate risk can be mediated by seeking investments with some currency flexibility: there are also life assurance policies available which allow you to structure investments in a tax-efficient way.

Is higher taxation a threat to your retirement?

Governments are facing the challenge of funding the costs of rising life expectancy: spending on services provided by the state such as pensions and healthcare continues to rise, and this bill has to be met by a shrinking pool of taxpayers - so taxes rise.

Higher taxes eat away at your income just as inflation does and can present a real threat to your financial security in retirement. Personalised tax planning will allow you to take advantage of all the opportunities available to you as a British expatriate, in your country of residence, in the UK or elsewhere.

You may be able to combine your tax and investment planning into a single exercise, allowing you tackle both higher taxes and inflation together.

How to maximise your pension

Your pension is likely to be your most important investment, and key to your financial security in retirement.  You therefore need to consider all your options, including those offered to you as as an expatriate, in order to maximise your pension income.

It is important to seek regulated advice on this to establish the best approach given your individual circumstances and financial objectives, taking into account the tax regime in your country of residence and your inheritance plans. It may be best to leave your pension as it is.

Legacy planning

Taking a strategic approach to your financial planning, considering estate planning alongside investment and tax planning, can allow you to plan to leave wealth to your family without compromising your quality of life today.

Expatriates face extra complexities with estate planning as they must take into account the inheritance tax regimes of two different countries whilst steering a path through different succession laws. Many countries impose forced heirship rules, and you must take special care if you have children from previous marriages to ensure that assets pass down in the way that you would wish.

Whatever your stage of life, Blevins Franks provides expert financial planning, helping you afford the lifestyle you want, for as long as you need, so you can focus on enjoying your retirement in the sun.

Tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; individuals should seek personalised advice.

Jason Porter is a director of specialist expat financial advisers Blevins Franks. Blevins Franks has been advising British expatriates for over 45 years.