Have you ever thought of retirement and then had a big scare?
With things like inflation, rising costs of living and people increasingly getting more and more unhappy about their salary, it is no wonder people have that scare.
I’ve heard this so many times “Oh, when I am old and finances are limited, I downgrade lor… downgrade to 1 room flat… downgrade my hospitalisation plan…”
Remember, retirement is not about downgrading your life!
Yet to virtually guarantee a good life after retirement, it is not impossible. Check out these 8 ways to make sure you don’t come back knocking on your boss’s door again after retirement.
1. Get a Hold Of Your Finances!
The first step of guaranteeing your retirement is by preparing yourself for it. No one goes into the retirement arena without analyzing what it takes to stay there.
By reverse engineering the sum of what you would need in the future, also calculate how much you have now and how much income will you be receiving in the future.
In specifics, calculate the following:
- Assets – how much you have and how much are they worth? By “Assets” it can also mean the type of insurance protection you have now, and who you want to leave it for.
- CPF Account – How much money is in there and when is its maturity date?
- CPF Life annuity plan – When can you apply for it?
TIP: Make use of the CPF Retirement Calculator to estimate your future income.
2nd Tip: Read this article to effectively manage your dollars, especially the 5th point!
2. Establish a Long-Term Financial Plan
In phases, look at how your needs will change over time. For example, there’s definitely a bucket list of items we would like to strike off before getting struck off the face of this earth ourselves. For most of us, travel seems to be commonplace or taking up a new hobby. Soon, you might also need to replace your car or enjoy the fruits of your labor by renovating your once very humble abode into a palace.
Think about the different income sources you can use to fund the different stages in your retirement life. Long term is the key and not just for the next five years. Seek financial advice if you are not sure how to go about it. Budgeting is really not that hard.
3. Grow Your Retirement Income In Different Ways
A retiree or a potential retiree’s worst fear is to run out of money and not have enough or any income coming in. However, many different options are available to grow your retirement income and you would only need to be on an active search for it.
Look at seminars or talks that educate on growing passive income while retiring. Although most of these talks are more intended to sell you something, you can pick out the main ideas from them to invest.
4. Financial Advice – Get it as soon as you can!
Professional advice is always advisable to maximize your retirement fund potential. If you require help with a strategy to invest, don’t ask your friends! Because everyone’s situation is never the same, approaching a financial planner can cover or uncover areas that can increase potential returns you never though you can get.
5. Spread Your Eggs
As the saying goes, it is never wise to put all your eggs in one basket. And that is so very true as far as retirement planning goes. With most retirees surviving beyond 90 these days, don’t commit to investments without seeking help first. Diversity is key to keep a healthy and growing investment portfolio.
If you can afford it, try investing in property or blue chip stocks, which will help with good capital growth and also to stay on top of inflation. Don’t make rash decisions to invest heavily in just one financial instrument, keep your options open!
6. Scrutinize Your Spending
By scrutinizing your spending, you can ensure that you pay yourself first. As stated in the famous book called The Richest Man in Babylon, if you don’t pay yourself first and pay the restaurants and clothes boutiques first instead, you will never be rich.
By using a simple budget planner, you can save enough for the whole of your retirement days without worrying whether you will have enough tomorrow.
7. Use Your Entitlements!
If age pension is not in the picture, there are other benefits that you can take advantage of such as cheaper medical care, reduced conservancy rates and travel concessions. A Seniors Card can also provide some discounts in other services such as retail.
8. Keep Working
Sounds odd but its true. Keep on working while you still can so that your savings for retirement goes untouched. What’s more, there will be more CPF in your account. The Singapore government now encourages most to work beyond their retirement age because it not only benefits your financial well-being, it also stimulates the mind.
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