Your gratuity against your retirement target, in AED.
Retirement gap
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Projected gratuity
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Target lump sum
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Extra monthly saving
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The quiet retirement problem facing every expat
If you work in the UAE on an expat contract, there is no state pension waiting for you. The GPSSA pension scheme covers UAE and GCC nationals only. Your statutory retirement provision is end-of-service gratuity, a lump sum your employer pays when you leave, based on your last basic salary and your years of service. The trouble is that gratuity was designed as a severance benefit, not a pension, and the UAE Labour Law, administered by MOHRE, caps the total at two years of your full wage. A benefit capped at two years' pay is never going to fund two or three decades of retirement on its own. This tool exists to put a number on the difference between what your gratuity will realistically be and the lump sum you actually want to retire on, then to show the extra monthly saving needed to bridge it.
That framing matters because gratuity can feel like a lot of money when it lands. Seeing it next to a genuine retirement target is sobering, and it is the right way to plan.
A 20-year career against a 3 million target
Run the defaults: a monthly basic of AED 20,000, 20 years of service at exit, a target retirement lump sum of AED 3,000,000, 20 years until retirement, and a 6 percent expected return. Gratuity accrues at 21 days of basic pay per year for the first five years and 30 days per year thereafter, as the calculator applies the rules, so 20 years gives 5 times 21 plus 15 times 30, which is 555 days of basic pay. At a daily basic of AED 666.67 that is AED 370,000, comfortably under the two-year-wage cap of AED 480,000.
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The chart lays the gratuity against the target so the scale of the gap is unmistakable.
The cap is the trap, and salary growth is the wrinkle
Two things deserve a flag. First, that two-year-wage cap is a hard ceiling. A very long career at a high salary does not produce an unbounded gratuity; once you hit two years of total wage, extra service adds nothing. So the longer and better paid your career, the more of your retirement you must fund yourself, not less. Second, the tool computes gratuity on the basic salary you enter today. In reality your basic will probably rise over the years, which lifts the eventual gratuity but also tends to lift the retirement target you are aiming at. Re-run the numbers every few years as your salary moves. The gratuity day-counts and the cap reflect the current Labour Law as the calculator models it; confirm the latest gratuity rules with MOHRE, and treat the 6 percent return as an assumption, not a promise, since the required monthly saving is highly sensitive to it.
Closing-the-gap questions
Why does the required monthly saving jump so much if I lower the return?
Because compounding over 20 years does a lot of the heavy lifting. At 6 percent, growth supplies a large share of the final pot, so your own contributions can be smaller. Drop the return to 3 percent and the market is helping you less, so you must put in considerably more each month to reach the same AED 3,000,000. Try both in the tool; the difference is often striking and is a good argument for not being too conservative too early.
Should I count my gratuity as part of my retirement savings or keep it separate?
Count it, but treat it as one layer, not the foundation. This tool already nets your projected gratuity against your target before sizing the gap, which is the correct way to think about it. The mistake is leaning on gratuity as your main plan, because the cap and the absence of a state pension mean it will almost always fall short of a full retirement on its own.