Effective retirement planning begins with identifying and prioritising your retirement goals. Whether it is to generate enugh income for the desired lifestyle, do lots of travelling, buy a retirement home in another part of the world or even to start a second career or a business, goals identified must be realistic and attainable. Needless to say, the ability to meet basic expenses must be the first and foremost consideration.
To determine these goals, it is important to first determine the age at which they intend to retire and the financial position they want to be at that time. Whatever those goals might be, it is important to commit them to writing and when those goals are intended to be achieved. This should lead to determining the amount of money one will need in order to retire. Deciding when you want to retire is important to your retirement plans as this factor will permit you to know how much time you have to save for retirement.
Many retire at age 55, when CPF savings are allowed to be withdrawn. However, the average life expectancy for Singaporean men is currently 72 and for women 75. With continuing improvement in medical science, the life expectancy will probably be longer. This means that many will need retirement income stretching out to 20 years and more. It is also important to take note that average expectancy is a statistical figure. It is likely that you will live beyond the average and what then? A margin of comfort should be built into your calculations as the worst that can happen is to run out of financial resources.
Another very important factor that one will have to account for will be your choice of lifestyle and the career that you are pursuing now. The quality of your retirement lifestyle will depend on the projected income and expenditure. This in turn, will depend on your ability to accrue income towards retirement in order to have some measure of financial security during your golden years. The gratification from short-term low priority financial objectives might seem more important but it is wise to guard the habit of devoting a portion of earnings towards your retirement planning program.
To determine these goals, it is important to first determine the age at which they intend to retire and the financial position they want to be at that time. Whatever those goals might be, it is important to commit them to writing and when those goals are intended to be achieved. This should lead to determining the amount of money one will need in order to retire. Deciding when you want to retire is important to your retirement plans as this factor will permit you to know how much time you have to save for retirement.
Many retire at age 55, when CPF savings are allowed to be withdrawn. However, the average life expectancy for Singaporean men is currently 72 and for women 75. With continuing improvement in medical science, the life expectancy will probably be longer. This means that many will need retirement income stretching out to 20 years and more. It is also important to take note that average expectancy is a statistical figure. It is likely that you will live beyond the average and what then? A margin of comfort should be built into your calculations as the worst that can happen is to run out of financial resources.
Another very important factor that one will have to account for will be your choice of lifestyle and the career that you are pursuing now. The quality of your retirement lifestyle will depend on the projected income and expenditure. This in turn, will depend on your ability to accrue income towards retirement in order to have some measure of financial security during your golden years. The gratification from short-term low priority financial objectives might seem more important but it is wise to guard the habit of devoting a portion of earnings towards your retirement planning program.
