Retirement planning often looms on the horizon for every Singaporean. We are always looking ahead to plan for the big-ticket items in life which may include, holidays, preparing for wedding, purchase a house, saving up for our kids’ future and education. These items often have a greater emphasis on the lives of every working adult. More often than not, we have the tendency to delay the planning for our retirement.
When is the “right” time to start planning for my retirement?
Market polls like the DBS-Manulife Retirement Wellness Study done in November 2015 showed that people living in Singapore start planning for their retirement at an average age of 38.
While you might fall nicely into the normal bracket but starting to plan early for your retirement could bring about some tangible benefits.
What are the benefits of starting early?
Compound interest can get you pretty far. In fact, based on a calculation done by Business Insider — using your current age and a 6% return rate — the chart below shows much you need to be saving per month in order to reach $1 million by age 65. You can also see the calculations based on different rates of return.
So ideally when should we start planning for retirement?
Answer is, as soon as possible! With time and the power of compounding interest on your side, starting early will enable you to arrive at your goals earlier, enabling you to arrive at some degree of financial freedom at an earlier age.
What are the factors I need to consider for my retirement?
How much money do I need for retirement?
It depends on your current lifestyle and aspirations to maintain that lifestyle – to increase or reduce that lifestyle or modify it during retirement years. Here is a summary of basic expenses that you might need to incur at a post-retirement age.