Overcoming your retirement challenges
With rising taxes, inflated COE prices and exorbitant property rates, it’s no wonder that for many Singaporeans, saving for retirement is fast becoming a dream rather than reality. This was evident during a recent survey conducted by a foreign bank, where it was found that more than 4 in 10 Singaporeans have not set aside a single dollar for their retirement.
Getting harder to save
Due to the high cost of living in Singapore, Singaporeans are getting increasingly reliant on their Central Provident Fund (CPF) as a safety net for their retirement. In fact, many of those polled have claimed that they are held back from saving by their day-to-day living costs. This is hardly surprising given the rate of inflation, fuelled by mounting ERP prices and growing food costs.
Also contributing to the startling statistic is the mentality of young Singaporeans who see retirement planning as a secondary goal, only to be achieved after they have fulfilled their dreams of having their own property and car. This results in many young adults taking out loans to fund their wants, leaving them saddled with unnecessary debts that prevent them from saving.
Other obstacles to saving include unemployment, the financial burden of their child’s education and the costs of starting a family.
Achieving your retirement goals
With Singapore’s population projected to reach 6.9 million by 2030 and the looming prospect of a hike in property prices, it’s time to start planning for your retirement now, more than ever. But how do you go about it?
Meet with a professional
The survey found that those who consulted a professional financial advisor for their retirement planning accumulated the most wealth in their savings, managing to save a staggering 50 per cent more than those who did not have a formal plan. In short, to save effectively, it’s advisable to set up a meeting with your financial advisor to discuss a retirement and savings plan that you are comfortable with.
Squirrel away money the smart way
With so much market uncertainty and volatility, keeping your savings under your pillow is no longer a smart way to save. Instead, make your money work for you by investing in endowment plans, annuities and investment plans. Alternatively, if you find it hard to save, start a savings plan that allows you to enjoy higher interest while giving you financial flexibility with regular payouts.