Retirement planning can be delayed to meet more immediate financial needs. The longer you delay, the harder it will be to build a nest egg. When you start your retirement plan early, you have a better chance of securing the funds you need. You might be surprised at how simple it is.
What is the retirement age in Singapore?
Identifying your retirement savings timeframe is the first step to retirement planning. This requires knowing your retirement age. As a guide, we’ll take Singapore’s official retirement age. If you wish to retire earlier or later, adjust your plan.
Singapore’s retirement age is 63.
From 1 July 2022, the retirement age has been raised to 63, and will gradually be raised to 65 by 2030. Employers can’t ask you to “retire early” or dismiss you from your job before age 63, based on your age. It allows you to boost your savings until you decide to retire for good and is a safety net for you.
If you want to keep working, you don’t have to retire at 63. Singapore has what we call a “re-employment age”, when you can still be employed by a company. At the moment, the re-employment age is 68, so you can continue working for 5 more years. As long as you are medically fit and have satisfactory work performance, re-employment contracts last about a year. By 2030, the re-employment age will also increase gradually to 70.
You can plan for early retirement in Singapore by taking these steps:
(1) Determine your retirement needs:
Estimate how much money you’ll need to retire comfortably. Your retirement finances may be affected by living expenses, healthcare costs, and other factors.
Taking into account your desired standard of living after retirement helps determine your retirement needs. Estimate your retirement living expenses. Changing your lifestyle and expenses, such as reducing work-related costs but increasing healthcare expenses, may require adjusting your budget.
Your retirement income should be estimated once you know your expected living expenses. This typically includes Social Security benefits, pensions, and personal savings or investment accounts. Your retirement needs must account for potential changes in income and expenses over time, as well as inflation.
Calculate the gap between your expected retirement income and expenses. In order to achieve your retirement goals, you will need to save. Regularly re-evaluate your retirement needs and adjust your savings plan accordingly. You can make informed decisions about your retirement savings with the help of a financial advisor. Create a retirement plan that helps you achieve financial security and enjoy retirement to the fullest.
(2) Set a retirement savings goal:
Set a savings goal once you know how much you need to save. Estimate how much you need to save each year to reach your goal with a retirement calculator.
Plan for your future financial security by setting a retirement savings goal. To set a retirement savings goal, follow these two steps:
Estimate your retirement expenses:
Estimate your retirement living expenses. Your budget may need to be adjusted to reflect changes in lifestyle and expenses. Plan for healthcare expenses, travel, and other retirement expenses. Over time, inflation can also affect your expenses.
Calculate your retirement savings needs:
Your retirement savings needs can be calculated once you know your expected expenses in retirement. During retirement, you will need to estimate the amount of money you’ll need to save. Consider your expected retirement age, your savings and investments, and their potential returns. Your financial advisor can help you develop a savings plan that is tailored to your financial situation and goals.
Financial security in retirement can be achieved by setting retirement savings goals. You can achieve your retirement goals and enjoy your golden years by carefully considering your expenses and savings needs.
(3) Start saving early:
Starting to save early for retirement is a smart financial decision that can help you achieve your long-term financial goals. Here are three steps to help you get started:
Start small and gradually increase your contributions over time if you’re just beginning to save for retirement. When you take advantage of compound interest, even small contributions can add up.
Create a long-term plan:
Create a long-term savings plan to meet your retirement goals. Include your retirement expenses, your desired retirement age, and the total amount you need to save. With the help of a financial advisor, you can develop a personal savings plan.
The power of compounding can help you grow your retirement savings over time if you start saving early. You can prepare for financial security in retirement by setting aside small amounts, maximizing employer contributions, and saving long-term.
(4) Consider your investment options:
Consider investing in stocks, bonds, and other long-term assets to maximize your retirement savings. (Since you’re here, why not read: A Beginner’s Guide to Investing in Stocks)
(5) Reduce your expenses:
Look for ways to reduce your expenses so you can save more for retirement. This could involve downsizing your home, cutting back on unnecessary expenses, or finding ways to earn extra income.
You can make your retirement income last longer by reducing your expenses during retirement. You must manage your expenses carefully when your income is fixed or limited during retirement. Keeping your expenses low will help you cover your essential needs, such as housing, healthcare, and food, without running out of money.
Also, reducing expenses can make your retirement more secure in case of unexpected expenses. It is especially challenging to manage unexpected expenses during retirement, since you may not have the same income or earning potential as you did during your working years. If you reduce your expenses and build up an emergency fund, you can handle unexpected expenses, such as medical bills or home repairs, without relying on high-interest credit cards.
Planning for an early retirement takes time and effort, but it can be rewarding. Making smart financial decisions can help you create a secure and fulfilling retirement in Singapore.
Now is the best time to start planning for retirement
There’s a lot to digest before you start planning for retirement. It’s okay not to understand everything at once. Learning what your options are and what to do next is the first step in retirement planning.
You don’t have to go through this journey alone. Your decision-making and future planning can be aided by some financial assistance.
Since you’re here, why not read: