The majority of us hoteliers working under “expat” status do not have a proper pension scheme, which secures a decent living after retirement, nor do they have something planned to do after the super hectic life they live.
In this column I will share what I have been doing in order to secure a continuity once income from a full-time job stops.
A long time ago I have decided, like many in our industry, not to depend on any government pension funds to secure my retirement. Coming from a humble family, I have never expected to conduct a five-star life. Instead, I preferred to concentrate on savings and other investments, which can guarantee me a roof over my head and a meal on the table, as well as the possibility to live with dignity.
Besides traveling the world, working in exotic locations and in some of the most incredible hotels, there are several other benefits to begin an expat life. Here is a list of the most common:
- tax-free salary;
- accommodation allowance or even live in the hotel;
- schooling for your children is paid for;
- company car;
- holiday tickets;
- health insurance; and
- pension scheme.
Some major global companies like Marriott International, Hilton, InterContinental Hotels Group and Four Seasons Hotels and Resorts offer a pension scheme either upon employment or after a period of time. Their private scheme, which can be different from one company to another, pays up to 10% of your salary—in some cases employees can top up with the same amount—in a fund that can be collected at the end of the employment.
If one works for 20 or more years, it can come up to a considerable amount—a kind of retirement bonus that can help settle some expenses like purchasing a home, relocation costs, a car or perhaps setting up a small business.
Having those benefits, which are normally not applicable if you work in your own country, means that a good chunk of your salary can go straight into bank savings or other types of investments like real estate, bonds or shares.
Although it’s been a standard in the industry for a long time, there has been a shift in the past 10 years as benefits coverage for immediate family members has been discontinued, is no longer part of the salary package, or only applies to certain roles or remote and hardship locations.
Another factor to consider is that your salary could be paid in the currency of the country you work, in which case, should you decide to change your money into U.S. dollars, euros or other currencies, you need to estimate a loss of up to 10%.
On the other hand, working in certain countries can give you some exceptional bank saving investments with rates of up to 8%, which is unheard of in Europe or the U.S., where at most you will get 1% to 2% if any at all.
Another way to invest your hard-earned cash is real estate. Whether it’s through owning land or properties, which can provide a continuous income if rented out, or a long-term investment, if purchased in a prime location it can subsequently be sold at a higher price.
I know of some colleagues that have purchased a small apartment in key cities (like London, New York City, Paris) allowing their kids to freely stay there without having to worry about expensive rent. Then several years later, their properties can easily be sold for at least 40% to 50% more than the initial price of purchase. The same home can also be used as your retirement home.
One thing to keep in mind is ensuring you purchase where property and maintenance taxes are low; otherwise, if not rented, it may not make sense.
Now the other way to look at your retirement is to prepare for your second working life. Yes, that’s correct, you need to continue to work after your retirement.
I, myself, am not 100% sure I can completely and abruptly stop working. After so many years of 12 to 14 hours of daily work and a six-day day work week to zero, it might be a total shock. So I have begun working on my post-retirement life. For example, I’ve been participating in conferences as a guest speaker and presenting to university students. I’m also building my online reputation. After working on my professional reputation and learning about the impact of social media, it will be a good way to share my experiences within the industry.
One other thing I would love to do after retiring is to teach in a prestigious hospitality school, I firmly believe that we have an obligation to inspire more people to join our amazing industry and at the same time, this as well as the other activities, can guarantee me a small income while remaining active in the industry.
If done well and professionally, all of the above can help you generate some money, but most of all keep you busy after an intense professional life. I am sure we have all had more than one friend or family member who was not able to enjoy retirement due to a sudden sickness or even death.
My suggestion to my fellow colleagues is to think and consider what your post-working life is going to look like. Do not wait until it’s too late, and more importantly choose wisely the lifestyle you want to conduct once retired, which country you want to enjoy it in and the activities you want to plan to keep your social life busy. Start working on your vision board now.
Rocco Bova, an Italian born hotelier, is a passionate, energetic and enthusiastic professional, with experience from classic hotels to cutting edge design, from business city properties to resorts operations and from golf resorts to destination wellness with over 25 years of experience. Currently Mr. Bova is the GM of Chable' Resort & SPA, a luxury wellness resort set in the Yucatan jungle of Mexico.
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