Retirement Planning

How To Prepare For And Fund Your Retirement ?

You have worked hard for most of your live in the hope that you may be able to retire comfortably. What is your ideal retirement savings amount? What is your ideal retirement age?

You would need a plan that offers steady returns over a period of time as well as potentially higher returns than bank deposits. Start building your retirement nest egg today!  

If you save as much in the next 15 years as you did in the last 15 years, will you be ready for retirement?

Do you know that retirement can last 30 years or more? And most of us are financially under prepared for retirement. 

If you do not start planning now, you could find yourself still working hard just to maintain your living expenses at age 70.

IS CPF ENOUGH FOR RETIREMENT?

Some financial planning experts say that, as a rule of thumb, you need at least 70% of your last annual income to maintain your current lifestyle during retirement

On the other hand, CPF savings are only meant for basic retirement needs. If you contribute regularly from the time you start work, by the time you retire you should have  enough cash for a life annuity to provide a monthly retirement income of 20% to 40% of your last take-home pay  ,  reserved Medisave for healthcare needs  , and paid fully for a property that matches your income. 

Thus, CPF savings alone may not be enough for retirement , though this depends largely on your retirement lifestyle needs. You’d probably have to have private savings and/or investments to supplement your CPF. And don’t forget – you’ll be better off during retirement if you use your CPF savings wisely now! 

One major reason to grow our CPF monies is to plan adequately for old age. Currently we are guaranteed 2.5% each year for the CPF Ordinary Account and 4% for the Special Account.

However, there is a growing consensus that this alone may not be sufficient for retirement (click here to read a related article on CPF changes in 2003 and its impact).

The general warning is that CPF amount for retirement is not enough for the majority of people because much of it goes into home loan repayments. 

That is, some will be asset rich but cash poor. The startling statistics is that the majority of people will not even have the “minimum sum” set by CPF for one’s retirement.

How Can I Prepare For Retirement?  What Is Enough For My Retirement? How Can You Save For Your Retirement? 

6 Reasons Why You Need To Plan For Retirement Now :

1. Increasing Longevity 

• On average life expectancy across the world is increasing by 3 months every year  
• Singaporeans Life Expectancy At Birth : Male - 78 yrs , Female – 82.8 yrs  
• Singaporeans Life Expectancy At Age 65 : Male – 17.2 yrs , Female – 20.6 yrs  
• Females could expect to live longer than Males  

2. Decreasing Reliance on Family Support 

• With the ageing of the population, the support ratio has declined.  
• By 2050 the support ratio in  Singapore  is predicted to be 1.4 – the same as  Japan 
• This means, every Singaporean aged 65 or older could only count on 1 Singaporean aged 15 to 64 to support them in the future  
• And those approaching retirement with their own needs and desires sandwiched between their older parents and children are sometimes referred as “ SandwichGeneration” 

3. Increasing Health Care Cost

• Despite increases in average life expectancies, there is no guarantee that those later years will be healthy years  
• Increasing Health Care cost as population ages.  
• Singapore  – Health Care expenditure increased at an average annual rate of 10% over a 5 year period (1998 – 2003), since then this increase has continued and is expected to continue 

4. Erosion of Purchasing Power due to inflation

    –$100,000 today is worth $55,400 in purchase power in 20 years times at 3 % inflation 

5. Higher Lifestyle Expectations 

All income groups experienced increases in household income per household member  

in real terms from 2007 

6. Market Volatility & Downturn 

A stock market downturn at retirement can greatly reduce the income generated from an investment portfolio 

Key concern for men and women – how to prepare for and fund retirement in the current world  

( Video ) How to Start a Pension - Top Ten Tips  

Discover how to start a pension that is right for you with these top 10 tips 

Are People Planning For Their Retirement Correctly?

Four Major Findings:

1.  Singaporeans are underestimating how long they may live.

    Actual Life expectancy at 65 : Male - 82.1 yrs Female - 84.4 yrs 

     Retirement can last 30 years or more 

2.  U nderestimate the need for investment growth to combat inflation and rising  

     healthcare costs. ( Inflation = 7.5% , Healthcare cost = 6%-10% pa )

3. Singaporeans are financially under-prepared for retirement  … almost 50% do not

    have a plan for regular income or do not know how to.

4. Singaporeans want a “similar” or better lifestyle in retirement… 60% want to

  lead a similar or better lifestyle.

Fifty years ago the reasonable expectation was that you’d spend a few years in retirement – today it may well be decades

Now the real risk is that retirees will outlive their retirement savings and with reduced family support. 

Biggest concerns of retirement :

• Downgrade lifestyle after retiring  
• Running out of money when retired  
• Market downturns bring down value of savings  
• Rising inflation/living expenses  
• Rising healthcare costs  
• Not planned properly for retirement  
• No control over savings/investment  
• Run out of money inv. won't earn high return 

Rising inflation/living expenses & Rising healthcare costs rank the highest 

Average Singaporean Monthly Expenses - $2500 pm 

Looking forward for retirement is not enough. You need to plan ahead what you want to be and what you want to do.   

Where you want to live and what kind of style. And you need to ensure that you 

have sufficient financial resources to be able to enjoy your retirement years. 

Let us help you start building your retirement nest egg today! 

Retirement Planning Steps :

(A) WHERE ARE YOU NOW ?

(B) WHAT DO YOU WANT TO ACCOMPLISH AT RETIREMENT ?

(C) HOW TO ACHIEVE IT ?

Click here for = > Retirement Planning Solutions