2026-02-25 · NextMigrate Team
Retirement Planning When Your Currency Keeps Losing Value
Here is a thought experiment that will keep you up at night. You are 35 years old, earning a good salary in Lagos, Mumbai, Cairo, or Karachi. You plan to retire at 60. That gives you 25 years of saving. You are disciplined. You put aside money every month. You have a plan.
Now imagine that over those 25 years, your currency loses 90% of its value against the dollar — which is roughly what the naira did between 2014 and 2026. Your retirement savings, denominated in that currency, will be worth 10% of what you expected when you started saving. The retirement you planned at 35 will not exist at 60. Not because you failed to save. Because your currency failed you.
This is not a thought experiment for millions of professionals. It is their reality. And it is a crisis that almost no one is talking about honestly.
The Retirement Equation: Simple Math, Harsh Reality
Retirement planning comes down to a simple equation: accumulate enough wealth during your working years to fund your living expenses for the years after you stop working. The variables are:
- How much you can save each month
- What return your savings generate
- How long you save for
- How much you need in retirement
- How long your retirement lasts
In countries with stable currencies, this equation is solvable. You can project forward with reasonable confidence. In countries with weak and depreciating currencies, variables 2 through 4 are essentially unknowable, because the future value of your currency is unpredictable.
Pension Systems: What Exists vs. What Works
Let us start with the foundation — government and employer pension systems. The quality and coverage of pension systems varies enormously across countries.
Pension System Comparison
| Country | System Type | Coverage (% of workforce) | Employer Contribution | Employee Contribution | Expected Replacement Rate |
|---|---|---|---|---|---|
| Nigeria | Contributory (PFA) | ~12% of formal sector | 10% of basic salary | 8% of basic salary | 30-40% of final salary |
| India | EPF + NPS | ~12% of formal sector | 12% of basic wages (EPF) | 12% of basic wages (EPF) | 25-35% of final salary |
| Philippines | SSS + Pag-IBIG | ~35% of formal sector | Variable (SSS) | Variable (SSS) | 20-30% of final salary |
| Egypt | Social Insurance | ~40% of formal sector | 18.75% of salary | 11% of salary | 35-50% of final salary |
| Pakistan | EOBI + Gratuity | ~5% of formal sector | 5% of minimum wage | 1% of minimum wage | 15-25% of final salary |
| Canada | CPP/QPP + OAS | ~95% | 5.95% of pensionable earnings | 5.95% of pensionable earnings | 33% (CPP) + OAS supplement |
| Australia | Superannuation | ~95% | 11.5% of salary (mandatory) | Optional additional | 40-60% of final salary |
| UK | State Pension + Workplace | ~90% | 3% minimum (auto-enroll) | 5% minimum (auto-enroll) | 25-30% (state) + workplace |
| Germany | Gesetzliche Rente | ~85% | ~9.3% of gross salary | ~9.3% of gross salary | 45-50% of final salary |
| UAE | GPSSA (nationals) / Gratuity (expats) | ~70% | Variable | Variable | Expat gratuity: ~21 days per year of service |
| New Zealand | NZ Super + KiwiSaver | ~90% | 3% minimum (KiwiSaver) | 3-10% (KiwiSaver) | 40% (NZ Super) + KiwiSaver |
Several critical differences stand out.
Coverage: In Canada, Australia, the UK, and Germany, pension systems cover 85-95% of the workforce. In Nigeria, just 12% of the formal sector is covered — and the formal sector itself is only about 20% of total employment. This means roughly 2-3% of Nigerian workers have any pension coverage at all.
Replacement rate: Even where pension systems exist in developing countries, they replace a much smaller portion of pre-retirement income. A Nigerian professional can expect their PFA pension to replace 30-40% of their final salary. An Australian professional's superannuation aims for 40-60%. And remember: 40% of a Nigerian salary is far less in absolute terms than 40% of an Australian salary.
Currency exposure: A pension fund denominated in naira is subject to the same depreciation that affects all naira-denominated assets. The Nigerian Pension Fund Administrators (PFAs) primarily invest in naira-denominated assets — government bonds, local equities, and money market instruments. Even if these investments generate positive nominal returns, they may deliver negative real returns after adjusting for inflation and currency depreciation.
The Replacement Rate Illusion
A "replacement rate" of 30-40% sounds reasonable until you calculate what it means in practice.
What Pension Replacement Rates Actually Mean (Monthly Income at Retirement)
| Country | Pre-Retirement Monthly Salary (USD) | Pension Replacement Rate | Monthly Pension (USD) | Monthly Pension (Local) |
|---|---|---|---|---|
| Nigeria | $808 | 35% | $283 | NGN 438,000 |
| India | $1,958 | 30% | $587 | INR 49,900 |
| Philippines | $1,758 | 25% | $440 | PHP 25,000 |
| Egypt | $600 | 40% | $240 | EGP 12,000 |
| Pakistan | $892 | 20% | $178 | PKR 49,700 |
| Canada | $3,742 | 45% (CPP + supplements) | $1,684 | CAD 2,320 |
| Australia | $3,792 | 50% (super + Age Pension) | $1,896 | AUD 3,000 |
| UK | $3,675 | 40% (state + workplace) | $1,470 | GBP 1,165 |
| Germany | $4,050 | 48% | $1,944 | EUR 1,800 |
A Nigerian professional's pension of $283/month must cover all living expenses in retirement — in a country where a mid-career professional already struggles to cover monthly expenses of $925. The math does not work. Even the 35% replacement rate leaves a massive gap.
A Canadian professional's pension of $1,684/month, while not luxurious, is supplemented by GIS (Guaranteed Income Supplement) if needed, and provides a basic but dignified standard of living. Healthcare is covered by provincial health insurance. Housing stability may be secured by a paid-off mortgage.
The Currency Depreciation Catastrophe
Here is where retirement planning in weak-currency countries truly breaks down. Let us model what happens to pension savings accumulated over a 25-year career.
Scenario: Professional Saves for Retirement from Age 35 to 60
Assume a mid-level professional saves 15% of their gross salary toward retirement, with 5% annual local salary growth. We will track the real (inflation and depreciation-adjusted) value of these savings.
Nigerian Professional (Starting salary: NGN 15M/year)
| Age | Annual Contribution (NGN) | Cumulative Savings (NGN, with 12% nominal return) | Real Value in USD |
|---|---|---|---|
| 35 | 2,250,000 | 2,520,000 | $1,626 |
| 40 | 2,872,000 | 19,800,000 | $6,800 |
| 45 | 3,665,000 | 52,400,000 | $9,500 |
| 50 | 4,677,000 | 108,000,000 | $10,300 |
| 55 | 5,969,000 | 198,000,000 | $10,000 |
| 60 | 7,618,000 | 338,000,000 | $8,700 |
Read the last column carefully. Despite saving diligently for 25 years, with contributions growing every year, and earning a 12% nominal return, the real USD value of this professional's retirement savings peaks around age 50 at $10,300 — and then actually declines as currency depreciation outpaces returns.
At age 60, after a lifetime of saving, this Nigerian professional has the purchasing-power equivalent of $8,700. That is not a retirement fund. That is barely enough to cover a few months of modest living.
Canadian Professional (Starting salary: CAD 85,000/year)
| Age | Annual Contribution (CAD) | Cumulative Savings (CAD, with 7% real return) | Real Value in USD |
|---|---|---|---|
| 35 | 12,750 | 13,640 | $9,880 |
| 40 | 16,277 | 106,000 | $76,800 |
| 45 | 20,778 | 259,000 | $187,700 |
| 50 | 26,522 | 498,000 | $360,800 |
| 55 | 33,851 | 862,000 | $624,600 |
| 60 | 43,207 | 1,410,000 | $1,021,200 |
The Canadian professional accumulates over $1 million in real purchasing power by age 60. Same savings discipline — 15% of salary. Same career length. The difference? A stable currency, positive real investment returns, and a financial system designed for long-term wealth accumulation.
The Gap at Retirement
| Professional | Retirement Savings (USD) | Monthly Drawdown (4% rule) | Sustainable Retirement? |
|---|---|---|---|
| Nigerian | $8,700 | $29/month | No — lasts months, not decades |
| Indian | $42,000 | $140/month | No — below poverty line |
| Filipino | $28,000 | $93/month | No — inadequate |
| Egyptian | $5,200 | $17/month | No — essentially nothing |
| Pakistani | $9,800 | $33/month | No — essentially nothing |
| Canadian | $1,021,200 | $3,404/month | Yes — comfortable retirement |
| Australian | $1,180,000 | $3,933/month | Yes — comfortable retirement |
| British | $780,000 | $2,600/month | Yes — adequate retirement |
| German | $850,000 | $2,833/month | Yes — adequate retirement |
Using the standard 4% withdrawal rule (draw 4% of your portfolio annually for a sustainable 25-30 year retirement), the Nigerian professional can withdraw $29 per month. The Canadian professional can withdraw $3,404 per month. Same work ethic. Same savings rate. Same career length. A 117x difference in retirement income.
What Retirement Actually Looks Like
Let us move beyond the spreadsheet and describe what these numbers mean in lived experience.
Retirement in Nigeria on Local Savings
Monthly pension plus savings drawdown: approximately $312/month (NGN 483,000)
This buys:
- Basic rent in a modest area (not Lekki, not Victoria Island — think Ikorodu or the outskirts)
- Food for one person, mostly home-cooked, mostly local staples
- Basic transportation
- Minimal healthcare — no health insurance, clinic visits paid out of pocket, major illnesses are unaffordable
- No international travel
- No ability to help children or grandchildren financially
- No capacity to handle any financial emergency
- Constant anxiety about running out of money
This is the reality for the vast majority of Nigerian retirees, even those who held "good jobs" for decades. The pension system was designed when the naira was worth 10-20x what it is today. It was never updated to reflect the new reality.
Retirement in Canada on Local Savings
Monthly pension plus savings drawdown: approximately $5,088/month (CAD 7,000)
This buys:
- Owned home (mortgage paid off before retirement) or comfortable rental
- Full groceries, dining out occasionally
- Car or public transit
- Universal healthcare (no out-of-pocket for most services)
- Annual vacation — domestic or international
- Ability to support family financially
- Comfortable buffer for emergencies
- Peace of mind
The difference is not merely financial. It is the difference between retirement as a period of rest and fulfillment versus retirement as a period of anxiety and dependency.
Retirement in Australia on Superannuation
Australia's superannuation system deserves special mention because it is specifically designed to create adequate retirement savings. With mandatory 11.5% employer contributions (rising to 12% by 2027), most Australian workers accumulate substantial retirement funds even without additional voluntary savings.
The median superannuation balance at retirement in Australia is approximately AUD 350,000 ($220,000) for men and AUD 280,000 ($177,000) for women. Those with full careers and employer matching regularly exceed AUD 600,000-$800,000.
Combined with the Age Pension (a government payment for eligible retirees), most Australian retirees achieve a comfortable retirement standard. The system works because it is compulsory, inflation-indexed, and denominated in a stable currency.
The Healthcare Time Bomb
Retirement planning is not just about lifestyle. It is fundamentally about healthcare. As people age, healthcare needs increase dramatically. The question is: who pays?
Healthcare in Retirement by Country
| Country | Public Healthcare Quality | Out-of-Pocket Costs for Retirees | Average Annual Healthcare Cost (65+) |
|---|---|---|---|
| Nigeria | Very limited public options | 70-90% of costs out of pocket | $1,200-$3,000 (NGN 1.8-4.6M) |
| India | Limited public options | 60-80% out of pocket | $800-$2,500 |
| Philippines | PhilHealth covers basics | 40-60% out of pocket | $600-$2,000 |
| Egypt | Limited public options | 50-70% out of pocket | $500-$1,500 |
| Pakistan | Very limited public options | 70-90% out of pocket | $400-$1,200 |
| Canada | Universal public healthcare | 5-15% out of pocket (drugs, dental) | $500-$1,500 out of pocket |
| Australia | Medicare + PBS | 10-20% out of pocket | $800-$2,000 out of pocket |
| UK | NHS — comprehensive | 0-5% out of pocket | $200-$800 out of pocket |
| Germany | Statutory health insurance | 5-15% out of pocket | $600-$1,500 out of pocket |
| UAE | Insurance-based (for residents) | Variable | $1,500-$4,000 (if staying long-term) |
In Nigeria, a retiree with $312/month income facing annual healthcare costs of $1,200-$3,000 is in an impossible position. A single hospitalization or chronic illness diagnosis can consume the entire year's income. This is why many Nigerian and Indian professionals describe their retirement plan as "hope nothing goes wrong" — which is not a plan at all.
In Canada, the UK, and Australia, universal healthcare means that a cancer diagnosis, a heart attack, or a chronic condition does not bankrupt a retiree. This single factor changes the entire retirement calculus.
The "I'll Come Back and Retire at Home" Plan
Many professionals who move abroad plan to eventually return to their home country for retirement, where living costs are lower and social connections are stronger. This is a legitimate and emotionally compelling plan. But it requires careful financial analysis.
Retire at Home After Working Abroad: The Numbers
| Scenario | Country Worked | Country Retired | Retirement Savings | Monthly Drawdown | Comfortable? |
|---|---|---|---|---|---|
| A | Canada (25 years) | Nigeria | CAD 800,000 ($580K) | $1,933 (NGN 3M) | Very comfortable by Nigerian standards |
| B | Australia (25 years) | India | AUD 700,000 ($442K) | $1,473 (INR 125K) | Comfortable in most Indian cities |
| C | UK (25 years) | Philippines | GBP 400,000 ($504K) | $1,680 (PHP 96K) | Very comfortable |
| D | UAE (15 years) | Egypt | AED 1,200,000 ($327K) | $1,090 (EGP 54K) | Comfortable |
| E | Germany (25 years) | Pakistan | EUR 500,000 ($540K) | $1,800 (PKR 503K) | Very comfortable |
This strategy actually works well financially. By earning and saving in a hard currency and retiring in a lower-cost country, you get the best of both worlds: high savings accumulation during working years and low expenses during retirement. The key is that your savings are in a strong currency and your retirement expenses are in a weak one — the inverse of the trap that catches people who work and save in a weak currency.
However, there are important caveats:
-
Healthcare access: You will need private health insurance in most developing countries, which can be expensive for older adults.
-
Pension portability: Not all pension benefits transfer across countries. CPP and Australian super can generally be received abroad, but some benefits may be reduced.
-
Currency risk reversal: If your home country's currency strengthens significantly (rare but possible), your foreign savings buy less locally.
-
Social infrastructure: After decades abroad, your support network at home may have changed substantially.
-
Political and economic stability: The conditions in your home country at retirement age may be different from what you expect.
The Age Factor: Why Starting Late Is So Costly
For professionals in developing countries who are considering a move, age is critical to the retirement calculation. The earlier you move to a stable-currency country, the more years you have to accumulate real savings.
Retirement Savings by Age of Migration (Moving to Canada, Retiring at 65)
| Age at Migration | Working Years in Canada | Estimated Retirement Savings (CAD) | USD Equivalent | Monthly Drawdown |
|---|---|---|---|---|
| 25 | 40 years | $1,800,000 | $1,304,000 | $4,347 |
| 30 | 35 years | $1,350,000 | $978,000 | $3,260 |
| 35 | 30 years | $980,000 | $710,000 | $2,367 |
| 40 | 25 years | $680,000 | $493,000 | $1,643 |
| 45 | 20 years | $430,000 | $312,000 | $1,040 |
| 50 | 15 years | $240,000 | $174,000 | $580 |
A professional who moves at 25 accumulates over $1.3 million for retirement. One who moves at 45 accumulates $312,000 — still vastly more than what they would accumulate staying in a weak-currency country, but the difference between comfort and adequacy.
Every year of delay costs not just one year of saving, but the compounding returns on that year's savings for all subsequent years. In retirement planning, time is the most valuable asset.
Comparing Retirement Readiness: A Regional Snapshot
Retirement Readiness Index by Country
We can create a simple index by scoring each country on five dimensions (each scored 0-10):
| Factor | Nigeria | India | Philippines | Egypt | Pakistan | Canada | Australia | UK | Germany | UAE | NZ |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Pension coverage | 1 | 3 | 4 | 4 | 1 | 9 | 10 | 9 | 9 | 5 | 9 |
| Real savings returns | 1 | 5 | 4 | 1 | 2 | 7 | 7 | 7 | 7 | 8 | 7 |
| Healthcare access | 2 | 3 | 4 | 3 | 2 | 9 | 9 | 10 | 9 | 7 | 9 |
| Currency stability | 1 | 5 | 5 | 1 | 2 | 8 | 8 | 7 | 8 | 9 | 7 |
| Social safety net | 1 | 2 | 3 | 3 | 1 | 8 | 9 | 9 | 9 | 4 | 9 |
| Total (out of 50) | 6 | 18 | 20 | 12 | 8 | 41 | 43 | 42 | 42 | 33 | 41 |
Nigeria scores 6 out of 50. Australia scores 43. This is the gap in retirement infrastructure — and it translates directly into the gap in retirement outcomes.
The UAE scores lower on social safety net because its retirement support for expatriates is limited to end-of-service gratuity payments. However, its tax-free salary environment, stable currency, and high savings capacity compensate during the accumulation phase. Many professionals use the UAE as a savings accelerator and then retire elsewhere.
The Informal Pension System: Family
In many developing countries, the informal retirement plan is family. You invest in your children's education and success, and they support you in old age. This has worked for generations, and it still works in many families.
But it is becoming less reliable for several reasons:
-
Smaller families: Birth rates have declined across most developing countries, meaning fewer children to share the burden.
-
Economic pressure on the next generation: Your children face the same purchasing power trap. Supporting aging parents while trying to build their own financial security creates unsustainable pressure.
-
Geographic dispersion: As more young professionals migrate for better opportunities, the family support network becomes physically dispersed.
-
Cultural shifts: While filial duty remains strong in most cultures, the practical ability to fulfill it is declining as economic pressures mount.
-
Longevity: People are living longer. Supporting a parent for 5-10 years of retirement is different from supporting them for 20-30 years.
The family-as-pension model is not disappearing, but it is straining. And it places an enormous unfunded burden on the next generation — the same generation trying to escape the purchasing power trap themselves.
What a Realistic Retirement Plan Looks Like
Based on everything in this article, here is what realistic retirement planning looks like for professionals in different situations:
If You Are Working in a Weak-Currency Country and Staying
- Accept that your local pension will likely be insufficient
- Diversify savings into hard-currency assets where legally possible (USD savings, gold, international index funds through platforms that allow it)
- Invest in real estate early, before property prices appreciate further in local currency terms
- Plan for healthcare costs explicitly — budget for private insurance in retirement
- Build and maintain strong family relationships, as they may be your most important safety net
- Consider whether a period of working abroad to accumulate savings is feasible
If You Are Considering Moving Abroad
- Understand that every year counts — the earlier you move, the more retirement capital you accumulate
- Maximize contributions to employer-matched pension/superannuation programs immediately
- Do not neglect retirement savings in favor of remittances — balance both
- Research pension portability before choosing a destination
- Consider the return-and-retire strategy: earn in hard currency, retire in a lower-cost country
If You Have Already Moved Abroad
- Take full advantage of tax-advantaged retirement accounts (RRSP in Canada, superannuation in Australia, SIPP in UK, Riester in Germany)
- Do not over-invest in home country property at the expense of diversified portfolio growth
- Plan realistically for where you will retire and what healthcare will cost
- If you plan to retire in your home country, keep savings in hard currency until you actually move back
The Numbers Tell a Story
Retirement planning is the longest-term financial decision most people make. It spans decades. And over decades, the forces of currency depreciation, inflation, and negative real returns do not just erode savings — they obliterate them.
A professional who works a full career in Nigeria, India, Egypt, or Pakistan and saves diligently in local currency will almost certainly face a retirement that is financially inadequate. Not because they failed to plan. Because the structural economics of their country made the plan impossible.
The same professional, with the same discipline, working in Canada, Australia, the UK, Germany, or even the UAE for a significant portion of their career, will accumulate retirement savings that provide a dignified, comfortable retirement. The difference is not effort. It is environment.
This is not a judgment on any country or any person's choice to stay or leave. It is a presentation of numbers. Numbers do not have opinions. They simply report what is true. And what they report about retirement planning in weak-currency countries is sobering.
The question every professional facing this reality must answer is not "can I afford to move?" It is "can I afford not to?"
