My Executive

Never too late to save for retirement

BE PREPARED: Thanks to increasing life expectancies, our retirement years will likely be extended, so, the earlier we start putting money aside for our retirement, the better.


    Jul 09, 2013

    Never too late to save for retirement

    In this second instalment of a six-part series brought to you by Tokio Marine Life Insurance Singapore, we explore the necessity of insurance in planning for retirement

    As life expectancies continue to increase and Singapore's population ages rapidly, the need to be financially prepared for retirement is more important than ever.

    But when should one start saving for one's golden years? And how much does one need to set aside each month to retire comfortably?

    My Paper spoke to Mr Sam Goh, a financial-planning director at Tokio Marine Life Insurance Singapore (TMLS), and asked him to shed some light on the topic.

    Saving for retirement can seem pretty daunting, with many under the impression that major lifestyle sacrifices have to be made in order to put away enough for the future. Is there a way to strike a balance?

    One of the key factors in financial planning for retirement is being realistic.

    If one does not have the means to raise the standard of living significantly during retirement, it is prudent to at least plan to maintain the current standard of living in the golden years.

    Putting aside resources for retirement - which seems so far away - will always be a challenge when there are immediate financial needs to take care of. But we should balance living for tomorrow with living for today.

    How important is it to start early when it comes to financial planning for retirement?

    I believe that most of us no longer see our children as our "retirement plan".

    Our retirement years will likely be extended too, thanks to increasing life expectancies.

    The thinking now is very much "the younger me today must look after the older me tomorrow".

    Suffice to say, the earlier we start putting money aside for our retirement, the better.

    How we get there depends on when we start the journey, as that determines what savings and investment options are available and suitable.

    If one doesn't start saving for this eventuality at a young age, how can he compensate?

    It is never too late to start financial planning for retirement.

    When we are nearer to our retirement age, we just have to set aside more each month, and, perhaps, stick to more conservative investment tools.

    How does one determine how much one needs for a comfortable retirement?

    There is no simple formula. Much is dependent on what the individual wants. Here are some factors to consider:

    Decide at what age you want to retire

    This would tell you the amount of time you have to save or invest towards your retirement.

    Decide on the annual income you'll need in your retirement years

    It is reasonable to assume that you'll need about 70 to 80 per cent of your last-drawn income before retirement to maintain the same standard of living while in retirement.

    Find out the number of years that you're likely to need this annual income

    Statistics tell us that more than half of the current cohort of 55-year-olds will live beyond 85, and one third will likely live beyond 90.

    Another aspect to consider is your family history. Do your family members have the longevity gene?

    What are some of the policies available for those looking to build up a nest egg?

    Retirement-funding products usually offer an accumulation period, and then a pay-out period of between 10 and 20 years.

    But it is difficult to ascertain exactly how long to plan to receive a retirement income.

    At TMLS, we take away that problem by offering retirement-funding solutions with guaranteed lifetime retirement income.


    For more information on the types of insurance available, speak to your preferred adviser or visit