Let’s be honest: discussing one’s retirement is never a great conversation topic to begin with. More than that, everyone would have a more immediate pressing financial commitment that they need to fulfill first. Consequently, a lot of people put off retirement plans.
Nonetheless, it is possible to imagine a future in which you continue working far into your senior years. In fact, a growing number of Singaporean retirees hope to maintain their employment long into their 90s. Theoretically, you could keep working until your very last breath. Even yet, you shouldn’t let this excuse you from saving for your golden years.
1. You may not be able to control your health or your career opportunities
Unfortunately, not everything works out as expected. Consider the effect that COVID-19 has had on the labor market. It’s clear from the statistics that the elder workforce was hit harder by the pandemic.
Even if a company survives a slump in the economy, it may still close or a position may become obsolete due to advances in technology or shifting market demands. Also, no matter how cautious a person is, people still might get sick or hurt.
It’s not always up to you whether or not you want to stay working over the typical retirement age. Any moment, you could lose your capacity to keep working and receive a wage due to an unexpected event or a layoff. In the event of a family emergency, you may need to take time off from work to care for a loved one.
When you lose your work or are laid off as you become older, it might be difficult to start over again professionally. If you’ve had to take time away from working to heal from or care for a medical issue, you may find that your abilities have become obsolete in today’s fast-paced business environment.
However, a retirement plan is still necessary as a fallback in your retirement years. You may rest easy knowing you’ll have enough money to live comfortably in retirement with the help of a retirement plan like Go Retire Flex Pro, AIA Platinum Wealth, or Great Retire Income, all of which will allow you to keep working towards your professional goals for as long as you choose.
It’s one way in which these plans stand apart from CPF LIFE, which is designed solely for withdrawal upon retirement. If all goes as planned, you can add this to your CPF LIFE in retirement. You have a backup plan financially if you are unable to work or decide not to in your retirement years.
2. While your income may be lowered, your spending will simply increase
While it’s true that years of service are valuable, older workers have physical limitations that prevent them from putting in the same kind of hours as their younger counterparts. It’s also possible that they lack the most modern workplace abilities. Regardless, senior workers won’t be considered as essential to the company’s future.
However, you may find that your expenses rise as you become older. As you age, you will become increasingly vulnerable to health problems, and as a result, your healthcare bills will continue to climb. The cost of healthcare has a tendency to increase at a considerably faster rate than Singapore’s overall inflation rate.
That’s why it’s so important to put some thought into your retirement finances now so you’re not left scrambling later.
3. Plans vary through our different circumstances
When you’re young, it’s natural to believe that you’ll never have to work a day in your life. The truth is that as you progress through life’s stages, your priorities will inevitably change.
Without saving for retirement, you can’t afford to stop working or try something new (that pays less or nothing) when you’re older. When you’re young, you have a lot of time to put money down for retirement. Whether you choose to keep working in retirement or not, you will have more time and flexibility to invest during periods of market volatility and enjoy the compounding effects of your investments.
4. Leaving a Legacy for Your Family
You may be able to retire comfortably if you’ve set aside enough money now, invested well, and are eligible for CPF and CPF LIFE benefits when you reach retirement age.
If you have a family that relies on you financially, such as kids or grandkids, you may wish to leave them something in your will. This could be for anything like a wedding, college tuition, or even the first investment and self-assurance needed to launch a new business.
Bequest planning is an integral part of creating a thorough retirement strategy. Protecting your family’s standard of living and financial stability is more important than your own retirement savings.
5. Flexibility and liquidity for your financial goals
Retirement age in Singapore is projected to rise to 65 by the year 2030. Whatever the retirement age in Singapore may be when you reach senior citizenship age, a well-thought-out retirement plan will offer you the freedom to spend your golden years as you like. For this reason, it’s crucial to have a well-established strategy for retirement.
Additionally, you have the freedom to select either a single or recurring premium payment schedule, as well as an individual accumulation horizon, giving you complete control over your coverage. Together with life insurance that covers you for the rest of your life, you may rest easy knowing that your loved ones will be taken care of no matter what.