Karen Tang, CFP®: Certified Financial Planner in Singapore

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Services: Retirement Planning

Are you financially prepared for retirement?

More and more Singaporeans are working past age 65 because they lack retirement funds. And many are not certain if they can ever enjoy their golden years. The Central Provident Fund (CPF) provides only 25% of funds needed in retirement and yet, many are heavily dependent on this source of savings to fund their retirement.

The key is to start early. The more time you allow your investments to grow, the closer you are to achieving your desired retirement goals.

Savings alone are not enough to plug the retirement funding gap. This is because the low interest rates (around 0.25% p.a. or even lesser) cannot keep up with inflation. What this means is that the purchasing power or the real value of money diminishes. If you are unwilling to take risks and prefer to depend only on your savings (i.e. negligible returns) to secure your retirement, you run a even higher risk of not being able to retire comfortably.

Therefore, the keys to a successful retirement are:

  • To start early and
  • To make your money work harder for you.

There are 10 critical aspects that you should aim for in your retirement planning:

  • You have total clarity on your current financial position (net worth), your cash flow and available emergency funding.
  • You have adequate protection for disability, critical illness, long term care and health care.
  • You have done your calculations (i.e.realistic about retirement age, income needed in retirement and life expectancy).
  • You would be debt free upon retirement.
  • You have identified your sources of retirement income.
  • You have set your money to grow.
  • You have done your estate planning.
  • You have a well integrated financial plan.
  • You revisit your financial plan regularly.
  • You have the right financial adviser.
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