Balancing Priorities: Should You Focus on Education or Retirement Planning First?

Should You Focus on Education or Retirement Planning First?

As a Western expat in the Middle East, you’re in a unique financial position. You have access to tax-free income, higher disposable earnings, and fewer financial constraints than your friends and ex-colleagues back home. This gives you a significant advantage when it comes to wealth accumulation, but only if you plan wisely.

One of the biggest financial dilemmas you’ll face as an expat is how to prioritise your savings despite having moved to the region for financial benefit. Do you focus on your child’s education, ensuring they have the best opportunities without being burdened by student debt? Or do you prioritise your retirement, securing your financial future so you never have to depend on them later in life?

Many parents instinctively prioritise their children, believing education is more urgent than retirement, which is typically further away. However, neglecting retirement can result in financial insecurity in later years, potentially requiring your children to support you financially just as they are starting their own lives.

Fortunately, you don’t have to choose one over the other. With careful planning and financial multitasking, you can ensure both your child’s education and your retirement are fully funded. However, this requires understanding the real costs, identifying hidden risks, and your current shortfalls, as well as structuring your finances to maximise your long-term security.

Why Education Planning Matters? 

For expat parents, education is often one of the largest financial commitments they will face. University fees have risen sharply in the past two decades, and when combined with inflation, living costs, and travel expenses, the total cost of a degree can be staggering.

However, one of the biggest financial shocks many expat parents experience is their child being classified as an international student, even if the child holds a passport from the country they plan to study in.

Many universities charge international students significantly higher fees than domestic students. This classification often depends on residency rather than nationality, meaning that even though your child is a British, Australian, American, or European citizen, they may still be charged as an international student if they have not lived in that country for a certain number of years before enrolment.

This unexpected classification can double or triple tuition costs, forcing families to make difficult financial decisions, such as liquidating investments, delaying retirement, or taking on debt.

The Hidden Risks Expats Overlook in Education Planning

The Financial Consequences of Miscalculating Education Costs

Many expats set aside what they believe is enough to cover university tuition, only to realise later that they have underestimated the actual costs. The consequences of this mistake can be severe, requiring parents to withdraw funds from their retirement savings or sell assets at an inopportune time.

Consider an expat family living in Dubai who assumed their child would qualify for home fees at a UK university. They planned for £9,250 per year in tuition and had set aside £80,000 for a full four-year degree, factoring in living expenses. When their child was accepted into university, they were shocked to discover they were classified as an international student. The tuition alone was now £30,000 per year, bringing the total cost of the degree to over £160,000.

As a result, they were forced to withdraw funds from their retirement savings earlier than planned to bridge the gap, significantly reducing their long-term financial security. They could have avoided this financial strain entirely if they had been aware of this risk and had a contingency plan.

A contrasting example is another expat family who worked with a financial advisor to ensure they were fully prepared for all possible scenarios. They had structured their education savings in an offshore investment portfolio, ensuring their funds grew tax-efficiently and kept pace with inflation. When their child was accepted into university, they had enough savings to cover tuition at both domestic and international rates without affecting their retirement funds.

These examples highlight the importance of planning ahead with accurate financial calculations. Those who structure their wealth properly can absorb financial shocks, while those who don’t may find themselves scrambling to cover unexpected costs.

Why Expats Delay Financial Planning and Why It’s a Mistake

Many expats put off financial planning for education and retirement because they believe they have time. Some assume they will always be able to earn at their current level or that they can "figure it out later." However, delaying these decisions can lead to serious long-term financial consequences.

A common misconception is that an end-of-service gratuity will provide enough financial security for retirement. While the gratuity may offer a lump sum, it is rarely sufficient to sustain a comfortable retirement, especially for those accustomed to a high standard of living in the Middle East. Others assume their child will secure a scholarship, reducing education costs, but most scholarships cover only a fraction of total expenses, and with the application process being highly competitive, there is no guarantee of being awarded one.

Some expats rely on property investments to fund both education and retirement, but this strategy comes with its own risks. Property markets can be unpredictable, and liquidity issues may arise when funds are needed most. Selling an investment property at short notice to pay for tuition can result in lower returns, missed investment opportunities, or tax liabilities.

Misconceptions like these cause many expats to delay taking action, which only makes financial goals harder to achieve later. The longer you wait to start planning, the more difficult it becomes to reach your target savings for both education and retirement.

How Your Child’s Nationality & Residency Can Impact University Fees

UK Universities: A Costly Surprise for Expats

Many British expats assume their children will automatically qualify for home fees at UK universities. However, to be eligible, students must meet the following criteria:

• Have a British passport AND

• Have been "ordinarily resident" in the UK for at least three years before starting university

  
  

If your child has lived in the Middle East for most of their life, they may not qualify for home fees, even if they are a UK citizen.

Tuition cost difference:

• Home Student Fees: £9,250 per year

• International Student Fees: £25,000 - £40,000 per year

  
  

Over a four-year degree, that’s an unexpected additional cost of £60,000 - £120,000.

European Universities: Lower Costs But Only If You Qualify

Many European countries offer significantly lower tuition fees for domestic students. However, if your child has not lived in the country for several years, they may be classified as an international student and pay significantly higher fees.

• Public universities charge domestic students under €2,500 per year in Germany, France, and Spain.

• If classified as an international student, tuition can jump to €10,000 - €15,000 per year, depending on the programme.

• In the Netherlands and Ireland, non-EU students can pay over €20,000 per year for a degree.

  
  

Many expat families only realise this too late, forcing them to find additional funds at the last minute or reconsider their child's university choices.

US & Australian Universities: Out-of-State & International Fees

• US Public Universities: If your child is a US citizen but has not been a state resident for at least a year, they will likely pay out-of-state tuition, often 2-3x higher than in-state rates.

• Australian Universities: If your child hasn’t maintained continuous residency in Australia, they may not qualify for Commonwealth-supported places, meaning tuition can increase from AUD 12,000 per year to AUD 45,000+.

How Much Should Expats Really Save for Their Child’s Education?

The cost of education depends on several factors, including:

• Where your child will study: Will they attend a local university, or do you plan to send them abroad? International education is significantly more expensive.

• The type of course: Some degrees, such as medicine, engineering or architecture, require longer study periods and higher tuition fees.

• Additional expenses: Beyond tuition, you must consider costs for books, accommodation, transportation, and even living expenses.

  
  

Let’s break it down based on today’s estimated annual costs for a four-year degree:

United Kingdom

Domestic Fees: £9,250

International Fees: £25,000 - £40,000

Living Costs: £12,000

Total cost: £85,000 - £200,000

Europe

Domestic Fees: €500 - €2,500

International Fees: €10,000 - €20,000

Living Costs: €10,000 - €15,000

Total cost: €50,000 - €140,000

United States

Domestic Fees: $10,000 - $2000

International Fees: $40,000 - $60,000

Living Costs: $15,000

Total cost: $220,000 - $300,000

Australia

Domestic Fees: AUD 12,000 - AUD 15,000

International Fees: AUD 35,000 - AUD 50,000

Living Costs: AUD 20,000

Total cost: AUD 180,000 - AUD 280,000

If your child is 6 years old today, by the time they attend university, these costs could be 50-100% higher due to inflation. This is why early financial planning is critical.

Since these costs can be unpredictable, it’s wise to start saving early. The sooner you begin, the more time your money has to grow.

How Expats Should Plan for Education Costs

For expats in the Middle East, the opportunity to save and invest more efficiently than those in high-tax jurisdictions can be a real advantage. However, turning that advantage into a successful education plan for your children requires a thoughtful, well-structured approach. A combination of global investment access, strategic planning, and asset diversification is essential to stay ahead of rising education costs and unexpected financial shocks, especially if your child ends up paying international tuition rates.

The goal is not just to save but to grow your capital in a tax-efficient, inflation-beating way, and flexible enough to adapt to your family’s future education decisions.

International Investment Accounts

One of the most effective ways for expats to grow their education fund is by saving every month into various offshore investment accounts exclusively available for expats. These accounts allow you to access a wide range of global investment markets across equities, fixed income, ETFs, and multi-asset funds without the restrictions imposed by domestic tax laws.

These offshore accounts also offer multi-currency flexibility. You can invest in GBP, EUR, and USD to align with your child’s expected country of study, mitigating currency risk and protecting your purchasing power for future tuition costs.

For a detailed guide on how to plan for your child’s education, visit My Intelligent Investor’s education planning page.

International Portfolio Bonds

International portfolio bonds are another powerful tool for expats. Capital redemption or life assurance-based wrappers provide multicurrency, investment flexibility, and significant tax benefits. Unlike direct investments or bank savings, portfolio bonds allow you to consolidate a wide range of global investment assets under one umbrella. This benefit lets you switch funds without triggering tax liabilities while remaining offshore.

For education planning, a portfolio bond offers several key benefits:

• Tax deferral while offshore is especially valuable for expats living in tax-free jurisdictions who will eventually become tax-paying residents.

• Flexible access to capital when needed, ideal for drawing down funds across the multiple years of a degree programme.

• Succession and legacy planning advantages could protect your child's access to funds even if something happens to you.

The key advantage here is tax efficiency. International Portfolio Bonds offer gross roll-up, meaning that your investment growth compounds without annual capital gains tax or income tax liabilities, depending on how they are structured and where you live when withdrawals are made. This allows your portfolio to compound more efficiently, particularly when investing over a long-term horizon, such as a 10–15-year timeframe.

Because they are portable and recognised across many jurisdictions, portfolio bonds are also well-suited for mobile expat families who may relocate again before or during their child’s university years.

UK Off-Plan Property in High-Growth Cities

For expats looking for a tangible, long-term investment to support future education costs, UK off-plan property, especially in high-growth regional cities like Birmingham, Manchester, and Leeds, offers a compelling opportunity.

Off-plan property allows investors to purchase at today’s prices, with completion typically 12–36 months away. These properties are often below market value at purchase. With the UK market entering a renewed growth phase following a period of high inflation and rising rents, well-located developments in the north of England offer strong prospects for capital appreciation and rental yield.

Here’s how it can work for education planning:

You secure a property now with a relatively low deposit (often 10–30%), allowing capital to grow during the build period.

Upon completion, you can either sell the property at a profit to fund tuition or generate rental income to cover ongoing education expenses such as accommodation, living costs, or annual fees.

Northern UK cities like Birmingham, Manchester, and Leeds have thriving student populations, strong employment growth, and continued investment in infrastructure. Demand for quality housing continues to outpace supply, creating a long-term foundation for capital appreciation and consistent rental demand. For an expat family, this can be a smart way to combine wealth accumulation with a practical education funding strategy.

Ultimately, the most effective education plans are not based on saving alone but on growing wealth in a structured, diversified, and tax-aware way. Whether you favour liquid investment accounts, structured savings vehicles, tax wrappers, or hard assets like property, the key is to start early, stay consistent, and plan with clear objectives in mind.

Your education fund can do far more than cover tuition when structured properly. It can also provide your family with financial stability, peace of mind, and the flexibility to make decisions based on opportunity rather than cost.

How Much Do You Really Need to Retire?

The amount required for a secure and comfortable retirement depends on a number of personal variables, such as your desired lifestyle, where you plan to live, your health, and how early you intend to stop working. For expats in the Middle East, the absence of employer-backed pensions or national retirement schemes makes it even more essential to take control and build a retirement strategy rooted in accumulation and long-term growth.

To begin with, you need clarity on the lifestyle you want in retirement. Do you wish to maintain your current standard of living, travel frequently, or provide financial support to your family? Will you live in a high-cost jurisdiction such as the UK or Australia or a more affordable European destination? These choices directly influence the size of the portfolio you’ll need.

Then, there are the realities of inflation and healthcare. Over a retirement spanning 25 to 30 years, the cost of living may more than double. Healthcare costs also rise sharply with age, even in countries with public health systems, especially if you desire private care. If your portfolio doesn’t grow in real terms after inflation, you risk seeing your purchasing power steadily eroded at the time when you need it most.

While everyone’s situation is different, a rule of thumb is to aim for a retirement portfolio that supports a sustainable annual withdrawal rate of around 4%. If you are 15 years away from retirement and require £80,000 per year in income, you’ll likely need a capital base of at least £2.5 million to last for 25 years, possibly more depending on inflation, investment performance, longevity, and future tax obligations. 

The earlier you want to retire, the longer the income will need to last; therefore, the bigger the capital base will need to be. When calculating how big your asset base is currently, remember that the value of your primary residence shouldn't be included in this number unless you plan to rent out a couple of rooms to students in your retirement.

To reach this goal, most expats should allocate 15–20% of their gross income annually to long-term investments earmarked for retirement. This percentage could be much higher if you have fallen behind on your retirement planning. However, the emphasis here is not simply on saving; it’s on accumulating growing assets.

Retirement Planning Is an Accumulation Challenge, Not an Income One (Yet)

Too often, the conversation around retirement planning shifts too early to income strategies. For most expats still in the growth phase of their careers, the priority should not be creating income today; it should be aggressively and efficiently building capital for the future. Passive income strategies can come later. For now, the focus must be on accumulation: compounding returns over time to reach a target retirement number.

If you’re considering the need for passive income, do you need it right now while you’re still working full-time, or do you want the freedom to access it and turn it on when you choose?

Next, let’s explore how expats can develop an accumulation-focused retirement strategy that fully utilises their earning potential and tax-free status.

Offshore Investment Accounts and International Retirement Wrappers

This expat solution provides expats with access to global investment markets, full flexibility on contribution levels, and, critically, tax-deferred growth. While moving in the Middle East, your investments can grow without the drag of annual taxes on dividends, interest, or capital gains. This compound growth over a 10–20 year horizon can significantly outperform equivalent onshore accounts.

These offshore retirement accounts are designed specifically for international professionals, allowing multi-currency contributions, investment in global funds, and access to retirement benefits aligned with international mobility.

Diversified, Growth-Oriented Investment Portfolios

At the heart of accumulation is a well-constructed portfolio with exposure to growth assets, particularly equities. While bonds and income-producing instruments play a role in the later stages of retirement planning, they typically offer limited returns during the accumulation phase. The goal here is long-term capital growth, not short-term income.

Your portfolio should be globally diversified across sectors and regions, rebalanced periodically, and constructed with an appropriate risk profile that reflects your investment horizon. Allocations to thematic funds, emerging markets, or small-cap equities may be appropriate for some investors, especially if retirement is still a decade or more away.

Regular Contributions and Compounding Discipline

Consistent investment is just as important as return on investment. A strategy of monthly or quarterly contributions into a disciplined accumulation plan allows you to take advantage of dollar-cost averaging, reduce emotional decision-making, and build momentum year after year.

Automating contributions helps align retirement strategies with income growth, which is significant for expats who receive bonuses or performance-linked pay.

Optional Property-Based Growth Strategies

While property can generate income in retirement, strategic exposure to capital growth markets can enhance long-term wealth during the accumulation phase. For example, investing in off-plan UK property, particularly in cities like Birmingham, Manchester, or Leeds, can deliver strong capital appreciation over a multi-year period, especially as new infrastructure, job creation, and regional development continue to drive demand.

If timed correctly, such an asset can be sold in your early 50s to release capital into a more flexible retirement portfolio or held until retirement and repurposed as a liquidity or drawdown asset.

This form of property investment should be viewed as a complement to your core investment strategy, not a replacement. It can enhance returns, but should be carefully structured to avoid undue concentration, liquidity issues, or unplanned tax exposure.

The Accumulation Mindset: Secure Tomorrow by Planning Today

Suppose you're not planning to retire in the next few years. In that case, your biggest priority should be growing your assets in the most efficient, tax-aware, and globally diversified way possible. The luxury of time, especially while living in a tax-free environment, is one of your greatest financial advantages.

Accumulation isn't just about numbers on a statement. It's about ensuring you retire with financial freedom, when you stop working, where you live, how you support your family and your lifestyle.

Later, as you transition into retirement, income planning and portfolio drawdown strategies will come into focus. But for now, if you're in your 30s, 40s or early 50s, your focus should be clear: accumulate as much as possible, as efficiently as possible, while the opportunity is still firmly on your side.

Check out My Intelligent Investor’s retirement planning page for a complete step-by-step retirement plan.

Why Retirement Planning Must Come First

For many expat parents, putting their children’s needs ahead of their own is second nature. It’s admirable, but it can be a costly mistake when it comes to long-term financial planning. While your child may be able to access student loans, apply for scholarships, or even work part-time during university, you cannot borrow to fund your retirement.

Despite this, it’s common for expats to prioritise education funding while putting retirement on the back burner, often with the belief that there’s still plenty of time to catch up. But the reality is that delaying retirement planning makes achieving financial independence exponentially more difficult. The later you start, the more capital you’ll need to save in a shorter timeframe and the more investment risk you may be forced to take on to bridge the gap.

By contrast, those who begin planning early benefit from compound growth, lower contribution requirements, and greater flexibility around when and how they choose to retire.

Neglecting retirement planning can lead to far-reaching consequences:

• You may have to work much longer than expected, well into your sixties or even seventies, which can significantly impact your lifestyle and health.

• You could outlive your savings, particularly in an era of increasing life expectancy and healthcare costs.

• You might become financially dependent on your children, a situation most parents want to avoid at all costs, especially after funding their education.

Retirement should not be viewed as a distant milestone, but as a central pillar of your financial strategy. This is particularly important for expats, given the absence of state pension schemes, employer-matched pension contributions, or long-term social benefits in most Middle Eastern jurisdictions. You are, in effect, solely responsible for building your own pension.

A commonly accepted guideline is to aim for a retirement income that replaces 70–80% of your pre-retirement earnings. For expats who are used to a tax-free income and an elevated lifestyle, this can represent a substantial figure. To comfortably generate this level of income in retirement, many will need to build an investment portfolio in the region of £2 million to £3 million, depending on where they choose to retire, the type of lifestyle they wish to maintain, and how they plan to draw down assets.

If you're planning to retire in the UK, Western Europe, Australia, or North America, the cost of living, including housing, healthcare, travel, and everyday expenses, is likely to remain high. Without proper planning, it’s easy to underestimate the capital required to sustain a dignified, independent retirement.

When education planning is prioritised to the detriment of retirement, parents may inadvertently burden the very children they set out to support. After all, if you spend down your assets entirely on education and reach retirement underfunded, it may be your children who are called upon to provide assistance later.

That’s why retirement should come first. It’s not selfish; it’s sound financial planning. By securing your own future, you also protect your family from future financial stress, ensuring that any support you give your children, whether for education, housing, or early career guidance, is done from a position of strength, not sacrifice.

Retirement planning isn't about numbers alone; it’s about freedom. It’s the ability to step away from work when you choose, to enjoy the fruits of your labour without anxiety, and to support your loved ones without compromising your financial security. It’s about living life on your own terms, something every expat deserves after years of hard work abroad.

The best time to start building that future is now.

Let My Intelligent Investor Guide You to a Secure Future

We get it that trying to balance saving for your child’s education and planning for retirement can feel overwhelming. But you don’t have to figure it out on your own.

We’re here to help.

At My Intelligent Investor, we offer personalised financial services to help you make the right choices for your future:

• Education Planning: We’ll work with you to create a realistic savings plan for your child’s education, explore investment options, and find the best way to cover tuition without financial stress.

• Retirement Planning: Let us help you secure your future with smart saving strategies, investment guidance, and step-by-step plans to make sure you retire comfortably.

No matter where you are in your financial journey, we’ve got the tools and expertise to guide you. Let’s build a plan that works for you and your family.

Get in Touch Today:

📞 Call Us: 00971 (0) 58 577 2265

📧 Email Us: info@myintelligentinvestor.com

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