Everyone dreams of having a relaxing and meaningful retirement. Perhaps, you have been hoping to retire at an earlier age, which can give you more chances to enjoy life. This is why some people decide early on to set up their retirement funds to prepare for their future. A good amount of savings and perhaps some investments can surely cover your needs during retirement. In Singapore, more than 300,000 of the people between the ages of 50 and 54 are expected to retire in the next decade or so. Thus, retirement planning is becoming as important as managing their finances for their day to day life. Particularly in this expensive city, there is a great need to make sure that everything is well-planned – from the daily events in life and up to the future. This is the way to prevent unnecessary stress and great challenges that can make things overwhelming to deal with.
So, when it comes to preparing for your retirement, saving enough for this day should be the best way to go. It may also help to have some investments and high-interest bank savings that can make it much faster and more efficient for people to have ample retirement funds. The important thing is to do some research on what is the most profitable option for your retirement planning strategy. According to HSBC bank’s recent study, more than 50 percent of all the survey participants within the middle income bracket admitted they have an insufficient amount of money saved for their retirement. They are unable to meet their target savings, which means they are most likely to remain in their jobs even up to 65 years of age. This would be the only way for them to experience a decent life when they retire.
The following are among the top three things that Singaporeans commonly fear about retirement – insufficient healthcare financing, real estate inflation and not enough job opportunities, unpaid loans and debts. In fact, even the affluent Singaporeans are finding it difficult to save early on in life because of the amount of money they have to devote for their personal loans and housing loans from licensed money lender in Singapore that will still have to take years to be paid off. This is why even before they get to save for their retirement, there is no time left to do so. The DBS conducted another survey that delved into the retirement saving issues encountered by other Singaporeans. Based on the study that involved 800 Singaporeans, 73 percent of the survey participants were intending to retire from age 55 and 65. Their target savings amount was at $570,000 to $575,000. This retirement fund they were aiming to achieve was supposed to give them a decent life once they reach old age.
Moreover, as much as 85 percent of the study participants were certain about being able to live a comfortable life as long as they have a monthly income during their retirement that is at least $3,500. When the said amount comes in for a period of 15 to 20 years, this should cover for their basic needs. Unfortunately, the average retirement savings was expected to be insufficient in a period of 13 years, which could make life tougher for any Singaporean.
Prioritising Finances
Considering the importance of savings for retirement, it is only right to make it a priority for the average Singaporean. However, this has not been the case, since there are those who struggle with keeping their finances properly managed sooner than later. There are some Singaporeans who start their retirement planning at 28 years of age. But in the case of other employed individuals, their only begin saving once they reach their early 40s. They only tend to ride things out and use their income elsewhere whether it is for debt payments and other items instead of putting it on their retirement funds.
The common reasons why some people fail to prioritise their retirement planning include various aspects. Some are struggling with keeping up with their children’s tuition fees, while others are not willing to give up their present lifestyle even if it is not parallel to the amount of money they make per month. This is why they are unable to have a sufficient amount saved monthly that should cover their future expenses. (You may wish to read on: Money Mistakes You Make Upon Retrenchment)
In addition to saving for retirement, there are Singaporeans who are not too keen on investing or putting their money to investment tools with higher returns. It was observed that three categories of individuals have varying savings priorities. These include the following:
- Working singles (35 to 49 years of age) put 51 percent of their income towards savings and investment.
- Working singles (18 to 34 years of age) put 44 percent of their income towards savings and investment.
- Married people (25 to 62) put 43 percent of their income in savings and investment. A higher percentage of what they make each month is placed towards loan payment.
As we look at the outcome of the survey, it appeared that married individuals struggle more with keeping up with their retirement savings. This is why they end up leaving their jobs at a later age because they need to make enough to cover for their multiple expenses aside from trying to save for their retirement. It is also worth noting that a large number of Singaporeans are more contented with merely having their annuity plans, insurance, investment, and CPF as sources of their retirement funds. Unfortunately, these may not suffice if only a small amount is earned through these savings options.
Getting Ready for Retirement
Retirement is the period in one’s life that must be lived in comfort. After all, you deserve to reap the fruits of your labor once you reach a certain age instead of continuing to pound away and work until your old age. Some people dream of travelling more or keeping their present lifestyle when they reach retirement. But all of these is only possible when there is ample money saved in the bank to cover the daily expenses.
The fact remains that the strategies involved in retirement planning depend largely on a person’s specific lifestyle. If you have certain expectations or plans for your retirement, then you should be able to save the right amount to make these goals happen. Some people decide to retire earlier, which is why they are resolute on saving as a young adult. On the other hand, some individuals live their day to day life in materialism, which makes it harder for them to save money for their old age. They end up giving in to their materialistic desires and indulgences, which cause them to work longer until ample money is saved to cover their daily expenses.
Studies have revealed that there has been an increase in the life expectancy of the average Singaporean over the past years. It was observed that both females and makes are living healthier and longer than before. Thus, there is a greater need to prepare for their old age to continue pursuing the same lifestyle they are enjoying at present. If your goal is to retire at 65, this means you need to at least have a sufficient amount of money saved until you reach the age of 85. Having ample savings for a period of 20 years should be your goal as early as now, with budget for medical care taking up a large chunk of your savings. This is a way for you to counter the common issues that come with old age including injury and illness.
Considering the importance of retirement planning, it is best to start as early as now to make sure you have your future secured before it comes. This will also allow you to enjoy life more instead of working longer than you have to. So, be sure to select the right investment and savings tool for your retirement to help you have the right amount to cover for your basic needs and perhaps some luxuries you deserve in your retirement.
