A self-funded plan layering personal savings plus gratuity.
Total at retirement
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Personal pot
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Gratuity lump sum
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Total contributed
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Retirement here is something you build, not something you are given
The defining fact of retirement planning as a UAE expat is that the safety net most people grew up assuming simply is not there for you. The GPSSA pension, funded by a combined contribution of around 26 percent of salary, is reserved for UAE and GCC nationals. As an expatriate you get end-of-service gratuity instead, a one-off lump sum based on your basic salary and length of service. That makes your retirement a two-part project: a personal pot you grow yourself through saving and investing, and the gratuity lump sum that arrives when you leave your job. This tool models both halves together, because looking at either one alone gives a misleading picture.
On the upside, there is no personal income tax eating into the money you set aside, and no tax on the investment gains you earn personally. Every dirham you decide to save is a dirham that actually goes to work. The discipline is on you, but the tax system is not fighting you.
Layering a personal pot onto a gratuity lump sum
Run the defaults: age 35, retiring at 60, AED 200,000 already saved, AED 4,000 invested monthly at a 6 percent expected return, a current basic of AED 18,000, and 15 years of service at exit. The tool compounds the existing savings and the monthly contributions over the 25 years to 60, then adds the gratuity computed on the basic and service figures. Gratuity here is 5 times 21 days plus 10 times 30 days of basic pay, which is 405 days at a daily basic of AED 600, giving AED 243,000.
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The chart shows the two layers that make up that AED 3,907,970, and how small the gratuity slice is next to a properly funded personal pot.
The salary-growth wrinkle, and why the pot dwarfs the gratuity
Two observations from that example. First, the gratuity is computed on your basic salary as it stands today. Over 25 years your basic will almost certainly climb, which would lift the eventual gratuity figure, so the AED 243,000 here is conservative if you expect promotions. The flip side is that the gratuity is capped at two years of total wage, so it can never grow without limit. Second, and more importantly, the personal pot is doing the overwhelming share of the work. That is the lesson: for an expat, gratuity is a welcome bonus on top of a serious savings habit, never a substitute for one. Start early, automate the monthly contribution, and let compounding stretch over the full horizon. The gratuity day-counts reflect the current Labour Law as the tool applies them, and the 6 percent return is an assumption rather than a guarantee; confirm gratuity rules with MOHRE and check that GPSSA does not apply to your status before relying on the split.
Expat retirement questions
If I switch jobs in the UAE, do I lose the gratuity progress I have built?
Gratuity is calculated per continuous period of service with one employer, so changing jobs typically resets the service clock and you are paid out the gratuity earned with the employer you leave. That payout is real money you keep, but it means a series of shorter stints generally produces less gratuity than one long tenure, because more of your years are taxed at the lower 21-day rate rather than the 30-day rate that applies from year six. Plan your personal pot to carry the load regardless of how your career moves.
Should I include my DEWS or workplace savings plan in the gratuity figure?
If your employer runs a funded scheme such as DEWS in the DIFC instead of traditional gratuity, that invested pot effectively replaces the gratuity lump sum, so you would not also count a separate gratuity. Use whichever your employer actually provides. This tool models the classic gratuity route; if you are on a DEWS-style plan, treat its projected balance as the end-of-service layer instead.