Retiring in Dubai is an attractive prospect for many expats due to tax-free salaries, modern infrastructure, and access to high-quality healthcare. However, planning a sustainable retirement in the UAE requires careful consideration. Unlike some countries with state pension systems, retirement here is largely self-funded, and expenses can be higher than many anticipate.
This blog provides an overview for an individual retiree. The figures presented are indicative and should be assessed against your personal lifestyle, outgoings, and long-term objectives. It is not financial advice and does not recommend any specific course of action.
1. Core Cost Components for an Individual Retiree
Housing
- Average rent for a 1-bedroom apartment in central Dubai in 2025 is approximately AED 8,700/month, while less central areas may be around AED 5,600/month.
- Utilities, including electricity, cooling, and water, may add AED 800–1,200/month depending on usage.
Insight: Owning property outright can reduce long-term costs, but maintenance and service fees should be considered.
Living Expenses
- Day-to-day costs, such as groceries, transport, and leisure, range from AED 7,000–8,500/month for a moderate lifestyle.
Insight: Lifestyle choices significantly affect retirement requirements. A detailed audit of anticipated monthly spending is recommended.
Healthcare
- Health insurance for retirees over 55 may range from AED 8,000–15,000 annually, depending on coverage and health status.
- Out-of-pocket medical costs should also be anticipated.
Insight: Preventive care may help manage costs, but insurance remains essential.
Inflation
- Dubai’s inflation is historically moderate, around 2–3% per year.
Insight: Even moderate inflation can erode purchasing power over a long retirement horizon. Planning should account for potential increases in living costs.
2. Estimating an Individual Retirement Savings Requirement
Step 1: Estimate Annual Expenses
For a single retiree with a moderate lifestyle:
| Category | Estimated Annual Cost (AED) |
| Housing + Utilities | 110,000 – 120,000 |
| Living Expenses | 84,000 – 102,000 |
| Healthcare | 8,000 – 15,000 |
| Total | 200,000 – 240,000 |
Step 2: Apply a Sustainable Withdrawal Rate
A commonly referenced approach is a withdrawal rate of 3–4% per year:
- 4%: AED 200,000 ÷ 0.04 = AED 5 million
- 3%: AED 200,000 ÷ 0.03 = AED 6.7 million
Insight: Your actual requirement may vary depending on your lifestyle, longevity, and risk tolerance. Scenario planning can help you prepare for different outcomes.
3. Lifestyle Scenarios and Sensitivity
| Lifestyle | Annual Expenses (AED) | Approx. Retirement Pot Needed (AED) |
| Conservative | 180,000 | 4.5–6 million |
| Comfortable | 220,000 | 5.5–7 million |
| High-End | 300,000+ | 7.5–10 million+ |
Insight: Adjust calculations to reflect your personal priorities and expected lifestyle.
4. Investment Considerations
Investments often play a key role in supporting retirement savings. Important factors include:
- Diversification: Across asset classes, sectors, and geographies to manage risk.
- Inflation Protection: Investments that grow at or above inflation help preserve purchasing power.
- Withdrawal Strategy: Structured withdrawals help maintain the fund over a long retirement period.
Insight: Investment decisions should reflect personal risk tolerance and retirement goals. Past performance is not indicative of future results.
5. Visa and Residency Considerations
- UAE retirement visas typically require a minimum savings threshold (around AED 1 million) or property ownership.
- This figure is a baseline for residency purposes and may not align with the savings needed to fund a full retirement.
Insight: Your retirement planning should consider both legal residency requirements and lifestyle expectations.
6. Final Thoughts
- Individualised Planning: Retirement needs vary significantly based on lifestyle, health, and long-term goals. Use these figures as a framework, not a fixed target.
- Scenario Analysis: Conduct multiple “what-if” scenarios to understand how changes in living costs, lifestyle, or longevity could affect your savings.
- Early and Ongoing Planning: Begin retirement planning early and review regularly to adjust for inflation, market changes, and personal circumstances.
- Risk Awareness: No estimate guarantees a specific outcome. All figures are indicative and should be considered alongside professional guidance if desired.
At Blacktower Financial Management (DIFC) Limited, our role is to provide guidance and insight to help you understand the retirement landscape in Dubai. This article is informational and does not constitute personal financial advice.
Disclaimer: Blacktower Financial Management (DIFC) Limited is regulated by the Dubai Financial Services Authority (DFSA). This blog is for general information purposes only and does not constitute legal, tax, or financial advice. You should seek independent advice from qualified professionals before making any decisions based on its contents.
Past performance is no guarantee of future results. Historical returns, expected returns, and probability projections are provided for informational and illustrative purposes, and may not reflect actual future performance. All investing involves risk, including the possible loss of money you invest.