Retirement – the price of now vs. the cost of later
When it comes to retirement planning, a fair number of Singaporeans know they need to do it, but have not gotten around to it yet. Can you really afford to wait another year to begin your planning? Will you have sufficient savings for a secure retirement?
3 reasons why retirement planning is important
1. We live longer, and the chances of outliving our savings is real; this is more true for women, who tend to live longer than men.
Adapted from Report, Department of Statistics, Complete Life Table for Singapore Resident Female, 2013
2. We are having fewer children, which makes it harder to count them as sources of support.
Adapted from National Survey of Senior Citizens 2011
3. Can we somehow manage to plan effectively and retire independently?
There are two possible outcomes when you retire
Singaporeans do not know how much they need for their retirement and hence do not put in the urgency and commitment to plan. Eventually, the time will come when you will need to face one of two outcomes.
- You have the financial means to enjoy your desired standard of living, retire securely and revel in your financial independence.
- You do not have enough savings to last you through your silver years, and end up outliving your savings. You will have no choice but to lead a simpler life compared to what you might have envisioned, and may need to continue working longer than your peers who began saving earlier.
How much savings do I need to retire?
The amount needed is unique for every individual and depends on factors such as your desired standard of living and attitude towards your retirement years. Some may find a monthly income of $1,500 sufficient for a simple retirement, while some may require tens of thousands of dollars to live out a “bucket list” lifestyle. At the end of the day, you need to figure out the unique amount you need.
How do I determine the amount I need for retirement?
At POSB, we have developed the FutureMe tool to help you gauge how much you will need in retirement savings, factoring in inflation rates. Click here to use our tool.
Take action today!
The earlier you start, the better. How you live out your later years in the future is dependent on the steps you take today to achieve a secure retirement. Make an appointment for a no-obligation session to speak to our POSB Relationship Managers and see how you can work out an effective plan, or visit any of our branches now!.