Blog 1 - A head start in retirement planning

Retirement may seem like a long way ahead especially when you are still in your 20s and 30s. Still, it is prudent to start early. With the effects of compounding, your money will grow at a faster rate. You will earn interest on the initial principal amount and also accumulated interest throughout the years ahead.

Back in 2019, when Covid-19 happened, OCBC did an article on the financial impact it had on working adults.

Source - https://www.straitstimes.com/business/banking/2-in-3-working-singaporeans-do-not-have-savings-to-last-them-beyond-6-months-ocbc

Wealth is not built overnight, it is built over time. The same goes for building a solid retirement nest egg. The first step is setting up a comprehensive financial plan. Start by visualizing the ideal retirement lifestyle and the rough expenses it requires. These estimates should include a buffer to gauge the rising healthcare costs, risk of inflation and longevity. Not forgetting that as you journey through life, continue to build and review the income flows.

Nest egg foundation

Employed Singaporeans and permanent residents are entitled to CPF savings and the national annuity scheme which will form the foundation of your retirement plan.

Most of you might be wondering… What about foreigners?

Singapore is indeed one of the most expensive country to retire in.

Source - https://worldpopulationreview.com/country-rankings/most-expensive-countries-to-live-in

BUT... there are many foreigners working in Singapore as well because the income here is much higher than what could be offered back at their hometown. Think about it, while still living here, why not save toward your retirement and spend the amount of money back in your hometown during your golden years?

#foodforthought

Ensuring a comfortable retirement

With so many other commitments building up along the way toward your retirement, you should ensure that your hospitalization coverage, accident coverage, critical illness coverage and long-term care plans are well taken care of. Rising healthcare costs and protection against medical crisis will become increasingly important with age.

Any outstanding mortgage should be fully paid up before you retire. You may consider downgrading to a smaller place if your kids are no longer staying with you. This may help unlock more disposable cash on hand.

Creating an estate plan could be a vital part of retirement planning, such as writing a will, doing CPF nominations and making a Lasting Power of Attorney.

Finally, leading an active lifestyle and preparing yourself emotionally for retirement will also help you walk into these golden years with ease.