| In life, we face
many uncertainties - over our career, family size, inflation
and changes in economic policies. Having enough to spend during
retirement requires a good deal of ability to judge what the
future would be like. But it is precisely because of these uncertainties
that make retirement planning important. You must be able to
cope with a variety of eventualities, and to monitor and modify
your plans as your hopes, abilities and personal finances change.
Retirement planning, in effect, is critical to all of us.
One - Start
Planning Early
Many plan how to spend their weekends but fail to plan for
the serious phase of their life - retirement. Though your
goals will be constantly evolving, developing a framework
that will fulfil your objectives is essential. People are
likely to delay planning for retirement until a few years
prior to it. After all, there are more pressing concerns such
as buying a house or car. However, the longer you put off
preparing for the years when you are no longer working, the
less likely it is that you will have enough during retirement.
This is because you will have less time to accumulate what
you need, and will most probably have to bear higher risks
in your investment portfolio in the hope of getting higher
returns. It is therefore important that retirement planning
should start as soon as possible, even while there are other
financial needs.
Two - Do Not
Rely Solely on Your CPF Savings
The CPF is a statutory savings scheme that provides employees
with benefits when they retire. Both employers and employees
are required to contribute to the fund at the appropriate
rates provided under the CPF Act. Though the CPF scheme prepares
for your retirement by making you set aside a sum of money
every month, studies have shown that Singaporeans may not
have enough CPF savings to fund their retirement. This is
because the bulk of our contribution has gone to financing
acquisition of properties.
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