Retirement looming? Even if it’s not, this helpful checklist will ensure you have everything you need to enjoy your golden years without worry.
Some of us think that our Central Provident Fund (CPF) savings will be enough to tide us through retirement, but relying on a steady, yet reduced income is not as simple as most Singaporeans imagine. In addition to daily living expenses, your retirement must also cover the rising cost of goods (gone are the days of a $2 bowl of fish ball noodles) and long-term medical costs.
But life doesn’t need to look bleak. Taking small steps towards securing your financial future can start you on your way to a comfortable retirement.
Are you retirement-ready? Read this checklist to find out.
What is the Right Age to Retire at: 55 or 65; Earlier or Later?
Whether you intend to retire at the age of 55, when you are able to withdraw your CPF savings; at age 65, when your CPF Life payouts start kicking in; or even earlier, it is important to set an expected retirement age as soon as you can — preferably once you start your first full-time job. Once you do, you can start planning and building your retirement fund based on the amount you will need to see you through your golden years.
How Much Do I Need?
To figure out how much you actually require, identify your retirement needs and goals. These include utility and phone bills, public transport fees, and food and entertainment expenses. In general, it is estimated that retirees will need 60 to 70 percent of their monthly pre-retirement income, with about $1,500 to $1,750 needed for monthly expenses, excluding housing and medical costs.
How Do I Start Building My Retirement Fund?
While CPF savings and payouts are a good starting point, they won’t be enough based on the estimated cost of leading a simple retirement lifestyle. Set up automatic transfers from your salary every month to ensure that you save consistently. And reinvest your money to ensure that you are sufficiently diversified. As the saying goes, never put all your eggs into one basket.
Living within your means and making smart financial decisions while you are young will start you on your way to a retirement that you will truly enjoy.
Secure your financial future and peace of mind starting from today.