Probably one of our biggest dreams is to retire from work so that we can do whatever we want without having to work for the money. Isn’t it wonderful when we can do what we love without money worries?
What will it take for us to retire?
In Singapore, it probably means that your house is fully-paid up, your medical insurance is fully-covered (eg. by Medishield) and you receive a monthly payout from your CPF Life.
You can retire if your children are supporting you or you have enough savings until the end of time.
How much savings do you need to retire comfortably in Singapore?
The amount depends on your current age and your desired standard of living.
The general advice is to save as much as you can. Many financial planners recommend that you save 10% to 15% of your income for retirement. Start saving once you start working.
The problem with most people is that as their salary increases, they also raise their standard of living. So no matter how much they earn, they don’t have enough to save.
In Singapore, we are expected to retire at 62. The male’s life expectancy is 82 years. Females live longer — up to 86 years old. This means our savings must be sufficient to last for 20 to 25 years.
We assume that the basic monthly expenses for Singaporeans after retirement is about $1,200 a month or $14,400 a year. That’s $360,000 for 25 years.
If you are young, it means that you still have time to plan your finances properly. If you are nearing your silver years and are worried about your financial future, maybe you can talk to a trusted financial adviser to see what plans can be laid out to help you lessen your financial load as you go about your life. Either way, it is something to seriously think about.
What are your thoughts on retirement? Share with us by commenting below!