As your CPF may not be adequate for your retirement, Singaporeans need to buffer for unforeseen events

Managing retirement's uncertainties

Average lifeexpectancy in Singapore

One of the biggest fears people face is running out of money during their old age. Research shows that people are living longer in most developed countries1, and it is no different in Singapore, where the average life expectancy is 79.9 years for men and 84.5 years for women1. The elderly in Singapore have the CPF LIFE scheme, but that is only enough to provide a basic standard of living.

Many Singaporeans also struggle to meet even half of the prevailing CPF Minimum Sum – the amount calculated to provide a basic standard of living in Singapore. Furthermore, many divert a large portion of their CPF savings to mortgage repayments.

Fortunately, many Singaporeans have realised that they need to be more pro-active with retirement planning, and not solely rely on their CPF. Many have begun planning and setting aside additional funds for this.

So how can we preserve the value of our retirement savings and ensure that unforeseen events do not wipe out our financial independence, while having a fulfilling retirement along the way?

In this article, we look at potential unforeseen events and the methods of managing them. Uncertainty management should definitely be part of a retirement plan, and this should include:

  • Guaranteed income regardless of how long you live
  • The ability to protect your savings and retirement goals
  • The ability of your spouse to have a secured retirement even when you are no longer around
  • The assurance and peace of mind knowing that the worst cannot destroy your dreams and goals

Disclaimers and Important Notice
This article is meant for information only and should not be relied upon as financial advice. Before making any decision to buy, sell or hold any investment or insurance product, you should seek advice from a financial adviser regarding its suitability.

Disclaimer for Investment and Life Insurance Products

Being better prepared to handle any unforeseen scenario that might arise during your retirement will ensure that you stay financially independent throughout your golden years.

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Source: DBS Asian Insights Office - December 20141

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