Retirement planning: 3 common mistakes Singaporeans can avoid

3 common retirement planning mistakes Singaporeans can avoid

After working with so many families and individuals for their retirement planning,  I realised that there are 3 common mistakes that people tend to make. 

 

 

1. Disregarding higher healthcare cost? 

Singapore medical inflation is scary! According to a study by AON, the medical inflation rate of Singapore stood at a high 15% in the year 2015 and 10% in the year 2016. Both numbers exceeded the global rate. If that isn’t scary enough, an NUS study showed that 1 in 3 Singaporeans will end up with diabetes by the age of 69. Singapore is one of the developed countries with the highest incidences of the condition in the world. If you’re really that worried about medical bills, please take steps to maintain your health while you’re still young enough to do so.

This also includes critical illness coverage as well. You do not want your retirement fund be wiped out in the event of illness striking. 

 

2. Not investing enough?

If you’re afraid that now is not the right time or can never seem to find the right opportunities, you might want to take the strategy known as dollar cost averaging when investing. It is a systematic way to invest in a diversified portfolio of different asset classes.

• Keeping up with inflation (2%-3% per year) is the main reason why should you invest and this can reduce the buying power of $1 saved today to the equivalent of about 60 cents after 20 years. Hence, chances of outliving your retirement funds are very higher by letting your money sitting in the bank.

 

3. Thinking CPF LIFE is enough for retirement 

“How come your CPF LIFE is not enough?”

The monthly payout of CPF Life is from your own CPF savings. But if you don’t have sufficient CPF life payout to begin with, you simply won’t have the monthly income which you need. The problem is that many Singaporeans have jeopardised their own retirement by diverting too much retirement savings into properties. Have you used most of your CPF to pay your mortgage loans?

If you feel that you might be making any of the 3 mistakes or you are unsure whether you made them when planning for your retirement or you want to find out on how to plan for retirement in Singapore where things are getting more and more expensive/ cost of living is raising. 

 

Feel free to drop me a message down below with your details, so that I can get in touch with you:

 

Also check out the case study of how my client gambled away her $1million retirement fund unknowingly and how you can avoid it