Tuesday, May 11, 2010

Taking retirement into your own hands

Many Singaporeans are not planning for their retirement with only half of them having concrete retirement plans at the average age of 59. There will be a risk of people strapped for money during retirement because by 2030, 1 in 5 Singaporeans will be 65 and older – up from 1 in 12 today.
One definite source of income for retirement would be from CPF savings. But the question of will it be enough pops up as life expectancy and cost of living increases.

CPF Life was introduced last year September replacing 20 years’ payouts to regular payouts for life under the Minimum Sum Scheme. But with the highest payout of slightly over $1,000 each month, supplementary income is required to prevent a decline in quality of life. Singaporeans can look into supplementary income scheme like private insurers’ payout plans or endowment plans.

Do have a balanced retirement portfolio of regular and lump-sum payouts. One with more lump-sum payouts will run into trouble of spending beyond their control allowing retirement funds to be reduced faster than intended.

Start planning for your retirement as early as possible to leverage on the power of compounding. Don’t allow your retirement years to involve struggling. It should be a period for you to be able to live comfortably, enjoying the fruit of your lifelong hard work through your golden years.

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