5 reasons why is retirement planning important
Retirement is an important reality for everyone. Most young people think retirement is a long way off. However, it is important to plan for your life post-retirement if you wish to retain your financial independence and maintain a comfortable standard of living when you are no longer earning.
Retirement should be the best time of your life, when you can relax and enjoy your life by reaping benefits of what you earn in so many years of hard work. To achieve a worry-free retired life, here’s why you should plan to plan ahead.
1. Getting stuck in the savings mindset. People tend to get hung up on how much you save every month. The amount does not matter as long as you set it aside. You can gradually increase the amount that you save over time. for your retirement funds whenever you have extra money, you get a salary raise, or you have finished your payments.
2. Medical emergencies. With increasing age comes more health problems. Medical expenses which may make a huge dent in your income post retirement. Failure here could lead you to liquidate (sell) your assets in order to meet such expenses. Remember medical claims do not always suffice.
3. Inflation. As you need to worry about it you need to account for it as well. You need to take into account inflation while calculating your retirement funds as well as your expenses.
4. No state sponsored pension plan. Unlike the US and UK where they have state pensions or social security benefits during retirement, Singapore does not provide such benefits. So, you are really on your own.
5. Fragmentation of nuclear families. Gone are the days when the elderly had a family to give them support. The culture of the Asian family is changing as couples are having less children. It’s vital to plan your retirement without any help from your family.
Now is the time when you need to make savvy investment decisions during your working life and put your hard-earned money to work for you in future.
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