Young woman enjoying an affordable takeaway lunch

S$10 a day, retire the smart way

Time to take action

According to a study by DBS Bank, a large percentage of Singaporeans have thought about retirement and hope to retire comfortably, but few are taking steps to reach their goals. Over 76% of the 1,000 people surveyed stated retirement as their long-term goal, while only 25% were acting on it(1).

The same study showed that Singaporeans' sentiments towards retirement are that it takes plenty of time, effort and money, yet only pays off far ahead in the future. Furthermore, many Singaporeans lack a proper financial plan.

So what should be your first step towards a comfortable retirement in the future? Just start saving! Even if you have to start small, with just S$10 a day, starting as soon as possible is key.

The power of compounding

Albert Einstein once said that compounding is the eighth wonder of the world. The power behind compounding lies in the snowball effect – it makes your money grow over time.

It is also easy to start doing. Simply start by making regular deposits into a savings account. Imagine that you are a 25-year-old fresh graduate starting your corporate life. You make $3,000 (the average gross monthly salary in Singapore was $3,705 in 2013 ) a month and put aside S$10 a day. Within a month, you would have accumulated $300, and within a year, $3,600. You put that amount into a savings account, which earns you 1%, interest each year, and at the end of 35 years, you would have $151,477 in your account.

What if you invested that same amount in the stock market? The Nikko AM Singapore® Straits Times Index ETF has given returns of approximately 14% since 2009, up till the end of June 2015. Based on this, if you had invested $3,600 in the Singapore Stock Market through the STI-ETF annually for the next 25 years, that would potentially generate a total amount of $746,398 .

Another asset class to consider is real estate through investments in Real Estate Investment Trusts or REITs, which are funds that develop or manage a basket of real estate. There are various types of REITs such as healthcare, residential, hotel, retail, mortgage, industrial and more; and the 34 Singapore-listed REITs offered an average total return of 12.9% in 2014(2).

Additionally, if you were thinking of an annuity that would provide a fixed monthly income for 30 years beginning in 35 years time, setting aside that $3,600 annually into a savings account with an interest of 4% (i.e. CPF-SA savings), will provide $1,000 of annuity income annually for 30 years.

Tips to help you save

There's no better time than now to start saving. To get yourself used to developing this habit, start with S$10 a day. It's not difficult especially if you have a steady job. You can further challenge yourself by finding ways to cut down on your expenses as well.

3 ways to reduce your expenses

Go through your channel subscription; let go of some premium channels if you realise you don't watch them often.
Is it worth signing up for an expensive plan to get the latest phone? Consider downgrading to lower plans if it is more cost-effective.
Eating out can be costly; try cooking at home more often. This could even lead to a healthier lifestyle.

The future of your happiness lies in your hands. The most important thing you can do for yourself is to make the decision to take charge and start taking positive steps. No matter how small, a step in the right direction brings you closer to achieving your goals.

"The journey of a thousand miles begins with a single step."


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  1. DBS Retirement Report 'Best is Yet to Be' (December 2014)
  2. The Business Times, BT Invest, "28 REITs and Six Stapled Trusts Averaged 2014 Total Return of 13%"
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