6 Important Things You Can Do To Prepare For Retirement In Singapore

You must be living a comfortable life today, watching movies on a large flat screen, riding your dream car. Or, having fun with your grandchildren with recreational activities?

Well, don’t you want to have these things in your life when you retire?

Yes, while Singapore’s retirement age will progressively increase from 65 to 70, we will all retire eventually. And at that moment, your earnings will get reduced, but the expenses will keep rising. Plus, there’s inflation to take care of.

Hence, you need to have a solid retirement plan.

While Singaporeans do have our CPF retirement account, will it be enough for you? And, how do you make an effective retirement plan? What measures can you take to prepare for your retirement? Don’t worry, that’s what we will discuss here today!

What Is the Right Time To Consider Retirement?

When it comes to retiring, there is no fixed time or profession. It doesn’t matter if you are in the corporate sector or a businessman; you can always consider putting an end to your work and enjoy the rest of your life. You need a good budgeting plan for a comfortable retirement.

But what is the correct time to take your leave? Let’s discuss that part, shall we?

Here are some indicators that will tell you if retiring is the proper option for you or not.

• Your debts and loans are fully paid
• You have a house, and there is no house loan hovering over your head
• When your health insurance is enough to cover your medical expenses
• Have adequate savings and passive incomes to live a comfortable life

6 Factors To Consider Before Making A Retirement Plan

If you have a steady income and feel that you can put aside some money for the future, you are going in the right direction.

But before you start saving money, here are six factors you can consider for making a successful strategy.

1. How Much Money Do You Need to Enjoy Your Retirement?

Once you get habituated with living a standard lifestyle, you cannot lower that bar.

Therefore, you should always plan to keep living the same way when you are not working anymore.

So before your start saving, you need to think about the amount you will require. Do you have debts to clear? Do you need a personal loan for other necessities? Otherwise, you will see the bank balance isn’t enough when the time comes, and you wasted all those years to save such a little amount!

2. Consider The Effects of Inflation

While planning for retirement, you should remember that you’re saving for the unseen future.

Though we don’t know what will happen in our life when the future comes, we certainly know that the living cost will be doubled!

Therefore, we have to consider the unforeseen price hike while planning. So how much money will be enough to pay your expenses?

Suppose the inflation rate is 3%; in that case, the living cost will be doubled in the next 24 hours. Now the question is how much money you will need if you retire 20 years later?

Let us draw a picture for you so you can have a better understanding.

3. Prepare A Contingency Plan For Your Medical Expenses

However, you cannot predict the exact amount you will be spending every year. Therefore, make sure you have some passive income too. It will help you to increase your bank balance and make you feel secure all the time.

It doesn’t matter how healthy you are right now; you don’t know if you’re going to suffer from digestive issues in the future or not. With aging, you may even feel a new symptom in your body every day.

Therefore, you need to make sure your medical insurance is adequate to guarantee the best treatment for you. Medical bills in Singapore are pretty expensive, so having a contingency plan will save you from spending your nest egg. In some cases, patients will have to apply for fast cash loans to cover their medical bills.

You can save a little amount just for the medical expenses or make some investments to cover the cost with the profit. Furthermore, try to live a healthy and active lifestyle.

4. Where Do I Save My Money?

To get the best out of your hard-earned money, you need to find a reliable institution that will ensure you are getting enough payouts when you retire. Well, there are plenty of institutions that will offer some lucrative schemes, but you have to be cautious while choosing that.

For reliability, you can go for the Singapore Saving Bonds. The returns will increase over time, and you can withdraw your money whenever you want without any penalty.

In SSB, you can start with $500, which is pretty easy for everyone. And if you hold for the whole 10-year period, you will get 2.6% per annum. It’s not exactly high returns per se, but it is definitely low risk.

5. Keep Your Documents Updated

Some of us start saving money without doing the legal paperwork. We usually neglect these things because we really don’t feel the importance of these documents.

But you don’t know what the universe has planned for you.

Hence, you need to maintain your papers properly to avoid issues during an emergency. Always keep your financial power of attorney, wills, trusts, and medical papers up to date. In this way, you won’t have to face any hassle if anything goes wrong.

6. Start Looking For Other Income Sources

It becomes harder to save money besides paying your bills and loans when you have a limited income. Hence, you should always look for investments opportunities, passive incomes, or even part-time jobs. Every cent counts.

If you do so, you can spend your primary income on bills and save the extras for your future.

However, make sure you have enough time to relax and enjoy present moments. Otherwise, life will become dull and stressful. This also contributes to why there are more Singapore residents seeking mental health treatment due to our highly stressful lifestyle.

The Bottom Line

The earlier you start preparing for retirement, the better.

The future is totally unpredictable; we don’t know what’s waiting for us on the other side. In this way, you’ll have zero chances to outlive your savings.

Even though your retirement plan is an invincible one, always keep some contingency scheme for rainy days.

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