Got your retirement planned out?
Over the years, Singaporeans have changed their perspective on retirements. Years ago, people think that retirement is stopping work and then relaxing with time at their own disposal.
Now, millennials think that retirement is earning passively or with a job related to something they enjoy. They also aim for a life with financial freedom. They are more optimistic about their retirement plans compared to the older generations.
The Manulife Investor Sentiment Index currently revealed that eight (8) in every 10 Singaporean investors believe that they are able to maintain or even improve their lifestyle even after they retire.
However, this same survey says that 49% of millennials are falling behind their original financial goals due to finances and health concerns. Most of them want to work (at least part-time) after retirement age, but health conditions might make it impossible.
They also expect to take care of their own children and their retired parents as well. They are sandwiched by these responsibilities added with the belief that they must not expect financial assistance from their own children by the time they retire. As if this is not enough financial concerns, they also have to consider possible debts and mortgages even after retiring.
So how will Millennials build enough retirement savings?
Here are three (3) tips to ensure enough retirement savings.
- Know your retirement goals
The first part of planning is knowing your goal. It has to be specific and attainable by making sure that your goal is realistic. Here are things to consider.
Your money’s worth now will not be the same a decade from now due to inflations. This means that what your S$1,000 can buy now will not be as much by 2028. Recognize that inflation will weaken your purchasing power. This will give you an idea on how much you should save up before retiring.
- Retirement age
Decide when you would like to retire. Retirement age in Singapore is 62 years old. If you would like, you can retire earlier, but you have to consider the lifestyle you will adapt during retirement. This way you can tell yourself the number of years left to save up.
Aim to be to draw an amount of at least two-thirds of your last monthly income. This may be an ideal amount, but of course, this can still vary depending on the amount of your salary and current lifestyle.
- Life expectancy
Another thing you have to consider is the number of years you would expect your savings to last you. There is a strong possibility to live up to 80 years old. Imagine if you have outlived your savings by the age of 75. How are you going to survive then?
Retirement calculator is a tool that gives you an estimated retirement income. We may all have our own individual needs, but it is better to have an idea on much you might be spending during your retirement. These calculators may also give you an insight on what else you should consider. Make sure that the retirement calculator considers the inflation.
- Assess your current finances
Now that you have worked out how much you’ll need to save up, you need to evaluate how much you can actually save with your current financial status. At this stage, you need to maximise your saving ability by paying off any outstanding loans and liabilities before you retire or at least to minimize your debt obligation.
After knowing the funds you expect to save until your retirement, calculate its difference with the amount you will need. Do not forget to review your insurance coverage as it can help you reach your goal.
- Start your retirement savings plan
Take the time to learn about investing. You may have heard about its risks and potential returns, but learning the trade will help you get the most out of it. Ask yourself how much you can afford to lose and not risk anything beyond it. Consider your insurance’s policy, CPF Special Account and Supplementary Retirement Scheme (SRS), Index Funds, Mutual Funds and other Equities and Property investment.
Always monitor your retirement plan and make some adjustments if needed to avoid falling behind. Create a budget and stick with it to ensure that you can save as much as possible. Talk with a financial adviser if you are unsure where to start with your retirement plan.
Of course, there will be times when you have to get a personal loan. A loan can be used to get to a better financial status if not getting back to stable finances. Make sure that you get your personal loans only from trusted moneylender such as Cash Mart.
Cash Mart offer multi-purpose personal loans. What sets it apart from the others is the 45 years of experience building a lasting relationship with its satisfied clients. Aside from loans, Cash Mart also offers tips to its clients on how to handle their finances better.
Visit CashMart.sg today to find out more.
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