Many of us look forward to the day that we can finally put off work and enjoy its fruits after decades of 9 to 5 schedules, long, grueling conferences and meetings, and sometimes even years of self-sacrifice for the family. Retirement seems to be a ray of sunshine after all!
For most Singaporeans, retiring from work means spending more time with family, visiting the local park, joining in community activities, and having more time for leisure and relaxation. This country offers a lot of tax breaks for those who are saving for their retirement. If you are planning on living in Singapore for many years, it is time to start thinking about your future now.
However, in a survey made by an agency that promotes active aging in the country, The Council for 3rd Age (C3A), results revealed that a surprising number of aging Singaporeans have plans to work either on a part-time basis or through shifting to a new career. And that is housekeeping to sustain a comfortable retirement amid rising mortgages and higher cost of living for the elderly, especially in terms of health and lifestyle.
Singapore consistently has the highest cost of living among its neighboring countries in the Southeast Asian region, and while it remains a popular haven for expatriates, more locals have found it difficult to manage their retirement due to higher medical expenses, continuing inflation, and lack of retirement planning among others.
There are many ways to save for retirement planning in Singapore. Many financial planners in Singapore can help you plan your finances.
They can help you understand how your savings will be used when they will be spent and what needs to be done to meet your retirement goals. A lot of the planning that goes into retirement planning begins with a review of your entire financial picture. Check out 365credit.com.sg blog post about retirement planning.
This was proven by a 2015 study from NTUC, which showed that 6 out of 10 Singaporeans only start saving for retirement at the age of 45, and this has diversely affected their ability to retire comfortably.
Which brings us to wonder, how can we save up for life after 60? This article will provide an insight into the best ways to save for retirement in Singapore:
1. Invest in your self
Love lavish dinners and weekends? Or probably eyeing that luxury bag for a while?
While it is okay to pamper or reward yourself for all the hard work you have put through, it is wiser to start investing in the future than to regret it 30 to 40 years after. Also known as the ‘golden rule’ in financial planning, and sometimes as ‘pay yourself first’ principle.
It simply means putting aside a certain percent of your income to a consistent savings account, may it be $50 or $100 a month or more, the important thing is to start saving.
At the same time, you are young, and while you can still afford to have a sound financial plan so that your retirement funds would be sufficient.
2. Plan for retirement
Planning for retirement involves finding sources of income, estimating future expenses, adopting a savings program, and managing assets. A sound retirement plan must be able to give an outlook on how you can pay for future expenses through different income sources, even amid a rising inflation rate.
Financial companies have identified the ‘Four Percent Rule’ on retirement plans, which means that only 4 percent of the fund must be accounted for withdrawal each month to make their portfolios last longer.
3. Learn, learn, learn!
The first step towards any goal is never to stop learning. We work hard so that we’ll have a more comfortable life later, and along with that, we have to learn how we can expand our income, and not just live within it.
There are plenty of choices of investments that we can start reading and learning about – the stock market, cryptocurrencies, forex trading, and e-commerce, among others. All of these may sound alien to you, but these are considered to be the future of investments.
4. Diversify your income
To diversify your income means creating new streams of income to add to your financial portfolio for retirement like investing in businesses, buying and selling of stocks, and using cryptocurrencies.
By putting your money on investments that can offer multiple sources of revenue, your assets will increase, and you have a sure-fire way of having a relaxed retirement.
5. Make your money last
It is not about having too much money to spend on, but it is about how much longer you can sustain life after retirement given the rising costs of food, medical services, and even old-age care homes.
In a similar survey done by C3A in 2015, 72 percent of retirees responded that lack of money hindered them from doing what they want to do after retiring, which indicates that only 28 percent have planned for life after work.
This is another dimension of retirement planning that most people ignore simply because they believe that their money will be enough for the years to come and realized it too late that it never hurts to borrow money for retirement.
As long as it is for creating another stream of income that can help achieve financial goals that they have planned and would eventually lead to a comfortable retirement.
6. Enjoy the ride
Lastly, the best way to save for retirement is to enjoy every moment, take every challenge lightly, but with a plan to overcome, and will eventually lead you to still enjoy life at 60 and beyond.
By borrowing money for retirement for investments and generating another source of income, you can have adequate (or even more) financial resources to do whatever it is that you wanted for a long time. Maybe it is trying a new sport, traveling around the world, visiting friends, relatives, and grandchildren, or just to simply live comfortably without having to worry when the next paycheck will come.
Saving for retirement is truly not an easy task. Still, with the help of this guide, you are taking the first step towards fulfilling the monumental task of keeping your savings for future use or investing them and creating multiple sources of income.
Remember, it is never too early—or too late (although early is better!) to start retirement planning.
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I am Adeyemi Adetilewa, a media consultant, entrepreneur, husband, and father. Founder and Editor-In-Chief of Ideas Plus Business Magazine, online business resources for entrepreneurs. I help brands share unique and impactful stories through the use of public relations, advertising, and online marketing. My work has been featured on the Huffington Post, Thrive Global, Addicted2Success, Hackernoon, The Good Men Project, and other publications.