In a recent Aviva survey, 54% of the Singaporeans say they would like to retire before 60 but only 36% of them believe they will be able to do so.
56% of them believe they need $2,000 to $6,000 per month for retirement, but 48% say they will actually have less than $2,000 per month based on their current financial plan for retirement. Looking at these numbers, it is already apparent that CPF savings would be unlikely to meet their needs.
So Singaporeans readily recognize the need to save for retirement, but many are skeptical about being able to save enough by the time they retire. The survey results have been consistent throughout the years, so what can Singaporeans do to change this?
[Free Ebook] How should you invest your first $20,000?
We asked 14 Singapore finance bloggers to share what they would do if they could go back in time and invest their first $20,000. They can no longer rewind time, but you can learn from their experience and hopefully start with a better footing.
1. Follow a Recommended Budget
At Dr Wealth, we recommend that users do not spend more than 50% of their income on essential needs and 30% of their income on lifestyle expenses. Do read more, see Simple Budgeting With The 50/30/20 Rule. By following this simple rule, Singaporeans will be able to supercharge their savings.
2. Do a Financial Health Checkup
Other than following a proper budget, one should also do a full financial health checkup, which includes solvency tests, liquidity tests, insurance requirements and more. Fortunately, Dr Wealth provides all these health checkups for free.
3. Know Thy Retirement Number
Other than knowing how much you need monthly during retirement, an even more important to know if how much you need in TOTAL by the time you retire to meet your monthly expenses. This figure requires several numbers, including monthly expenses required during retirement, time spent in retirement, inflation rate and rate of return. Again, Dr Wealth provides a Retirement Calculator for free! All you need to do is signup for an account to use the retirement calculator.
4. Invest for Retirement
Other than saving for retirement, it is even more important to invest for retirement. Investing through compounding returns is realistically the only way Singaporeans will be able to achieve their retirement target. At Dr Wealth, we believe investing in a well diversified portfolio is the best way to grow investments without taking excessive risks.
About the Author
Calvin Yeo, CFA, CFP is the Managing Director of Doctor Wealth Pte Ltd (www.drwealth.com), which is is revolutionizing the financial advisory industry by building an online platform to provide high quality and comprehensive financial advice.
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