How to Guarantee the Retirement You deserve

Dear Sir/ Dear Madam

Wanna retire at age 50 and yet send my children to university?
Wanna enjoy fine dining as often as you can?
Wanna spend more time with your children, parents and close friends?
Wanna take more frequent holidays to explore Asia with your spouse?

Fine dining for you?
Fine dining for you?

Who doesn’t want all the above?!!  


Most of us aspire to retire age 50 with a property full paid up and with assets and income to maintain our desired lifestyle for the rest of our lives.

e.g. If you are age 30 now, you only have 20 years “left” to save up for you to “retire” at age 50 and last you for the next 35 to 40 years. Assuming the average lifespan of Singaporean is  around age 80 to 85.
To retire at age 50, you’ll need to save $2033/mth at 7% p.a. to accumulate S$1m in 20 years to retire with $50,000/yr to last you for 20 years.

My job is to help you create the design for you to have certainty at your projected timeline so you can CHOOSE to either continue to work to stay mentally and socially engaged with society at age 50 or CHOOSE to completely relax and enjoy life.

It’s your life. It’s your choice.
And no one will care about your money as much as you do.

This requires your time, energy and commitment to sort your finances and start to save for your future now.

First, set aside your rainy day fund AND settle your critical illness cover and healthcare insurance plans before you do any investment or get any retirement plans.

  • If your household expense for basic needs  (food, utility bills, hobbies, & healthcare insurance needs) costs you $5000/mth, then you need to save a rainy day fund of $30,000 for 6 months in a liquid fixed deposit or bank savings account.
  • If you are single or you have children or aging parents who require your financial support, then you need to save up more.  I recommend saving up to 1 year’s income as standby fund for this.

Next, look at your idle cash savings, anything in excess of your rainy day funds MUST be put in different asset classes to earn interest for you (in the absence of any short term needs like buying a property or marriage).

Because your cash sits in the savings account bank and earns a low return of 0.05% p.a. with DBS for example.

Ask ourselves, will this return help you to achieve your retirement goal at age 50?

In layman terms, if inflation is 2% and if your fixed deposit rate is 3%, then your effective return is “3% – 2% = 1% p.a. ”
In financial terms, the effective return is only 0.98% p.a.
i.e. inflation will reduce your returns. 

Will the CPF Life to give you $1200pm at age 65 be enough for your basic needs?

If you think you can rely on your CPF savings for your retirement, THINK AGAIN!

The prices of property is high in SG. Chances are, most of us will use the CPFOA funds to pay off the mortgage. 

  • Will you be able to meet the CPF Life full sum at age 55?
  • Realize there are CPF rules: you need to set aside the basic retirement sum first at age 55 and only then, can you use the excess CPFOA funds to pay off the mortgage.

i.e. you may not even get the $1200 pm  “pay check” for your basic needs at age 65 if you do not meet the Retirement Sum for the CPF Life which is increased every year to keep pace with inflation.This is a real problem that most of us are concerned with.

Solution:
If you truly want to create the life of your dreams, you need to look inside yourself and make the decision to save up for yourself.

  • Only 20% of your monthly income is set aside for CPF which is probably going to service your mortgage anyway.
  • Set aside at least 10% of your monthly income to save up for your long-term goal of your retirement. It’s a need now!
  • Spend less on holidays. Cut back on unnecessary spending.
  • Start saving as much as you can, as early as you can.

To create your own pension, you either need a large starting nest egg or time.

Good news; if you are young, you have time on your side.

  • As long as you start saving now systematically and let the investments compound over time, you will have the income you need during your retirement. And keep contributing funds to your retirement account along the way.
  • For  single income families, where the husband is the sole breadwiner, the wife may not have sufficient CPF funds to form the basic retirement sum to receive a meaningful payout.  This is where dual-life annuity-basedinstruments can help couples to plan their retirement together so that in the event of a death, the surviving spouse can be assured of a retirement payout that goes on. Yes, such plans are available.

The only way that you can guarantee your retirement is to take control today and make that decision to set aside time and money to understand your options and set up the solutions.

So if you are below age 40, I can help you create a guaranteed monthly “pay cheque” for you to receive every month at age 50, not subject to market volatility or property rental yield fluctuations to pay for your basic needs. And this is on top of your CPF Life, assuming you have met the Full retirement sum at age 55.

For other age groups, there are other solutions. Call Claire to find out more.

I can also help you build a “play cheque” so that you have a chance to grow your money and enjoy the potential upside of the your money to allow you to go for holidays.

  • An example is a dividend portfolio that my company and I can help you generate passive income from a portfolio of fixed income funds and equity funds.
  • You need to take calculated risks to grow your money to beat inflation and the rising cost of living, even at retirement.

Be bold, commit to yourself and seize time to design your retirement today.

Call Claire at 81687459 now to start a conversation on this.

In my personal opinion, the only way to guarantee your future is to take control now and maintain control over your self-made pension.
The earlier you start, the higher your chance of materialising your desire to retire at age 50 when you accumulate enough money through the compounding effect.  

Nothing in this material constitutes personalized investment advice.
Information provided here should not be considered as advice or as an offer or enticement to buy or sell or trade. The contents of this material, including any financial data, information, opinions and analysis, are strictly intended for educational use only.

No guarantees are made as to the accuracy of the information provided herein.
You shouldn’t make any investment decision based solely on what you read here.

It’s your money and your responsibility. And please consult your financial consultant or call Claire Soh at 8168 7459 before investing in any investment or insurance.

Should you choose not to seek such advice, you should consider whether the investment or insurance product in question is suitable for you.

Contents © 2015 Ms Claire Soh. All Rights Reserved.


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