Financial ‘to-do’ list before relocating
Taking on a global relocation assignment can be a great opportunity for workers, as employees get to experience a new culture and part of the world. While the relocation itself may be exciting, it’s important that transferees continue thinking about their financial futures and planning ahead to accomplish financial goals.
In some instances, relocating to a new country may prompt some employees to pause their retirement planning, investments and savings. Doing so, however, can be damaging in the future and make it more challenging for transferees to get back on track when they return from assignment. Therefore, it can be helpful for workers to develop a financial plan before relocating to ensure they stay on target. There are a number of “to-dos” employees should take into account before leaving.
1. Develop a budget
The cost of living will vary depending on location and by country, and a relocation management company can help transferees gauge their living costs before they make the move. Speaking with a relocation consultant about the expected costs when moving is a critical part of formulating a budget. While on assignment, it’s natural that workers will want to travel, purchase souvenirs and attend events when they given chance. A budget allows transferees to map out spending in order to experience the host country without jeopardizing retirement and investment goals.
2. Account for out-of-pocket expenses
Companies should clearly explain to transferees which expenses are covered in the relocation package – such as health insurance, moving costs, security deposits and visa fees – and which ones the employee will be required to cover. Relocating internationally can be expensive, and those trying to develop a money management plan will need to be educated on any additional living costs their company will not cover.
3. Research banking options early
The relocation management company can assist transferees in researching the right banking options and setting up accounts, especially in areas that require legal documentation or standing.
4. Continue contributing to retirement
Most transferees can still contribute to their company’s retirement plan. It’s crucial that transferees keep investing and ensure they understand all the changes in their compensation package while on assignment so that they can make necessary adjustments, such as changing their contribution limits or rebalancing their funds.