Retirement planning in Singapore: it’s never too late (or too early) to start!
Many of us have yet to start our retirement planning. However, it pays to start early. Read on to find out how you can be better prepared for future spending needs and retire comfortably.
Mr Goh just got a new promotion at work. At 39 (age next birthday), he is a homeowner with 2 kids and a car. He is finally at a point where he is able to put aside a decent amount of savings.
His wife Mrs Goh had taken a break to look after the children but has recently returned to her old job. Now, the financial situation has improved to a point where Mr and Mrs Goh can think of putting money aside for their retirements.
Unknown to the couple, Mr and Mrs Goh’s story is one that has been told many times before and is unfolding all over Singapore. Tell us if this sounds familiar:
They got married in their late twenties and purchased their first HDB flat. They waited till their first child was born and purchased a car. One more child followed, and Mr and Mrs Goh got each of the children an educational investment plan. Many Singaporeans start putting money aside as soon as the first child is born.
With their current status, Mr and Mrs Goh have some more money to put aside. Does it go to travel and luxuries? Do they invest it? Do they save it for a rainy day?
You would be surprised to know that a good retirement plan will let you do all these and more.
A bit about retirement
In a survey published by Channel news Asia, 70% of people working in Singapore above the age of 45 indicated that they would like to retire early. Here are the top reasons for wanting to do just that.
Retirement may be the furthest thing from your mind when you are at a very good point in your career in family life; but with a little research, you will realise that the optimal time to start retirement financial planning is NOW.
Mr and Mrs Goh have opened their retirement savings accounts with Etiqa – the insurance arm of Maybank. Here’s what went into their decision
What to look for in a retirement plan?
When it comes to retirement planning, there are a few things about the plan and about investment in general that you need to know. These are a few facts about retirement planning among Singaporeans.
We need to change our attitude towards retirement planning. Here are the factors that should drive your decision as an investor.
#1 Is the payout according to my needs?
If you are looking at a retirement plan, the fundamental expectation from it would be to make your money grow faster or at the bare minimum, to outpace inflation. So, you should be looking at a plan that would give you some sort of an assured return.
That said, lifestyles differ from person to person, couple to couple, family to family. You should consider the flexibility of receiving a monthly payout or a lump sum amount upon maturity.
#2 Is paying the premiums easy for me?
The next thing you look into is the premium. Naturally, you should aim to get maximum returns while with minimum premium payments. Check if the plan has a short premium commitment period. If an insurance plan allows you to pay for a short term, it is to your benefit. Make the most of it.
#3 What if…?
Lastly, you should consider the possibility that you may pass away early. You need to check what the death benefits of the plan are.
Invest in a policy where you end up receiving a guaranteed monthly income from selected retirement age for 10 years to secure your retirement life. But also check out the scenarios like death or disability, and the benefits in such cases.
Is there such a thing as too late or too early to start?
Before we answer this question, let us have a look at the current income and expenditure for a retired family.
Remember, this is today. The expenditures will go up by the time you decide to retire. Thankfully, it is not too early or late to start planning for your retirement.
And that’s great news. Starting early is definitely recommended. That said, it is never too late to start planning for your retirement. Thankfully Etiqa, the trusted insurance arm of Maybank, has introduced a retirement plan eFUTURE pay presto, ideal for people like Mr Goh, who are starting a little late. (If you are reading this early in your career and family life, do still check it out as you reap more benefits financially when you start early – not too mention, you can plan to retire earlier!)
Here, when Mr Goh pays an annual premium of $7,195 for 10 years and selects the retirement age as 65, he will end up getting $1,000 guaranteed retirement income each month for the next ten years. When he turns 75, he would receive a maturity benefit of $166,531* on top of guaranteed monthly incomes. These would ensure that he can retire in peace and be independent at that age.
The highlight of eFUTURE pay presto is the short premium commitment period of 5 or 10 years. You can also choose a range of retirement ages from 55, 60, or 65 years. The application process is fast and easy too. Health checks are not necessary as this is a guaranteed issuance policy.
So the time is NOW, mums and dads. Plan for your retirement today.
To find out more, see eFUTURE pay presto.