Most people envision a comfortable retirement filled with a luxurious lifestyle and an abundance of family time. While these goals may be achievable, they aren’t realistic for everyone.
If you hope to retire comfortably and enjoy your golden years in blissful leisure, you’d better start planning now. Don’t wait until you’re too old to get started on building your financial strategy.Although the chances of making it happen are slim, there are several things you should consider that will help ensure the success of your retirement. Here are three factors that are essential for achieving the retirement of your dreams: Saving strategy, wise investments, and well-planned retirement income plan.
Retirement is a major milestone in life, and it’s important that you plan your finances well ahead of time to make sure you’re ready.
Saving Strategy
An important factor to consider for a successful retirement is putting aside a certain amount of money from every paycheck and having a large sum available for whatever you may need in your later years. The easiest way to save money is by living below your means. Spending less now can improve your finances in the future. But most people don’t know how much they’ll need to save in order to retire comfortably. According to Tiq (2021), Singaporeans need to have at least $1421 monthly for retirement. Most people will live longer than 20 years, so the total amount of savings needed would be about $341,040. The best thing to do for you to generate this much is by starting early and living below your means as much as possible.
Wise Investments
When it comes to sustaining a comfortable lifestyle, what you need is income. To replace income from work pre-retirement, retirees need to seek income from their CPF savings, government-source benefits, and also from any pension plans or annuities they might have. However, these will most likely not be enough to provide the necessary income needed during retirement. A retiree will need to supplement these income streams with withdrawals from their investments. Your savings may not go as far as you think. Singaporeans have been earning low returns for years.
If you want to have a healthier retirement, you can take steps to invest your funds more directly in the stock market. This will require a commitment of time to learn about investing and the risks involved.
There are many investment options available, and selecting the right mix isn’t easy. Some people opt for a simple “buy and hold” strategy, buying an index fund and holding onto it until retirement. Others like a more active approach which tries to maximize returns by exploiting short-term trends in the market. Making smart investments can help you grow the money you’ve saved for retirement. Some people choose to invest in stocks, bonds, or mutual funds; hiring a financial planner can help you decide which investment strategy is right for you.
Well- Planned Retirement Income Plan
Lastly, it is essential to have a customized retirement income plan in place many years before and throughout your retirement. A bedrock of most plans is a predictable, sustainable, inflation-adjusted stream of income that will make up a large portion of your after-tax, inflation-adjusted expenses.
Having a retirement income plan will help you manage the potentially steep costs of your lifestyle and other emergency expenses that may arise in later years. An extended plan, with premiums worth paying for, provides extensive benefits and removes some of the burden of getting support from your family.
A good plan for retirement will take into account many factors: your income (and whether it will rise or fall), your debts, your lifestyle, and so on.
Retirement is a major milestone in life, and it’s important that you plan your finances well ahead of time to make sure you’re ready. There’s no point in putting it off, either—the sooner you start to plan, the better prepared you’ll be when the time comes. So start planning today! The earlier you plan, the more time you’ll have to adjust your strategy based on changing circumstances.