As an expatriate heading home for good after living overseas for years, one of the biggest challenges you'll face is achieving the lifestyle you've earned with the retirement savings you have.

Like most expats, your retirement package may seem quite generous. However, because of that, and the fact that your cost of living has probably been quite low for years, there can be a tendency to underestimate the actual cost of establishing and maintaining the lifestyle you've worked for and dreamed about.

More than a few expats have jumped into retirement with their eyes closed, only to discover the water was deep, cold and full of unexpected and often dangerous currents. You could encounter similar problems if you ---

--- Fail to plan in detail.
--- Underestimate the benefits of budgeting.
--- Deplete reserves to make multiple purchases with cash.
--- Ignore the prudent use of debt, or
--- Fail to consider how many years your savings have to last.

Those kinds of mistakes too often cause retiring expats to underestimate their future cost of living by as much as 50 to 100%. You can confirm that fact, and avoid that mistake, by talking with friends and colleagues who have already retired in advance of your scheduled departure. Their experience and advice can be invaluable.

I think they'll tell you that the single biggest financial mistake most expats they know make is failing to examine their financial situation in detail before throwing the retirement switch. Given the chance to do it over again, many would take a little time to develop a more specific plan to guide their individual decisions. They'd prioritize their financial goals and personal dreams and then allocate resources to each in order. That simple but valuable tip can eliminate most unwanted surprises all by itself.

Budgeting is a natural extension of that process. But, it's a concept that's often foreign to expats. The combination of subsidized expenses, a low cost of living, and limited discretionary spending options may have made it unnecessary while living overseas. Done right, however, there's no more fundamental or effective way to manage finances successfully over long periods of time.

Another problem you could encounter is caused by the decision to make large and often expensive purchases in cash. That tendency has left more than a few ex-expats strapped when emergencies, unforeseen circumstances or better opportunities presented themselves unexpectedly. Knowing how and when to use debt prudently can actually contribute to your long-term financial health rather than hurt it. It's also smart to establish a positive credit history before you need it.

Starting retirement with a seven-figure investment account may seem like more than enough to meet every contingency until you think about how long 30 or 40 years really is and what things really cost.

It's not just the price of a new home or the mortgage that goes with it, that takes a bite out of your savings; it's the cost of furnishing it, landscaping it, and paying the property taxes on it, as well as, the water, heat and electricity bills. Recurring expenses for other essentials, like food, clothing, transportation, insurance, and medical bills add to the total. And that's before even considering travel or entertainment or the other rewards you've earned.

Planning for retirement is the one, critical thing each of us must do to achieve the financial stability essential to make your retirement years truly golden. It's the cornerstone on which personal financial security is built. It should be done sooner rather than later, and it should be done in some detail. An effective plan defines and prioritizes your goals in terms that are realistic and easy to keep in focus as circumstances change. Those goals may include buying and furnishing a home, acquiring and replacing cars, or taking annual vacations for a decade or more into the future. Others may anticipate the expense of college or weddings. You may also have personal dreams about a boat, an RV, a business venture or a charitable foundation.

Whatever your priorities are, taking a little time to write them down and then determine how best to fund each will provide you a road map to security and a way to avoid unnecessary stress. There's nothing wrong with believing you've earned the best after all those years in Saudi. But, how you go about getting it will determine how bright or bleak your retirement will really be.

Finally, you should always keep in mind that the retirement planning you do will only be as accurate as the facts and figures you apply to it to account for considerations like life expectancy, inflation, taxes and the rate of return on your investments. A lot of useful information is readily available to help you decide what numbers to apply. But, if you are uncomfortable making those determinations, you may want to seek expert assistance.

For more information about Creative Planning, please visit our website. You may view our disclosures here.