Having a backup fund for retirement
In this second instalment of a six-part series brought to you by Manulife Singapore, we explore the topic of preparing for retirement at different stages of your life
LUKE NG, 41, AND LILIAN ONG, 45, MARRIED WITH TWO CHILDREN
AS EARLY as during their courtship days back in the 1990s, Luke Ng and Lilian Ong both agreed that, in life, one has to have a plan.
From tying the knot in 1997 to having children early in their married life, the couple said they have always kept a keen eye on the future.
Their journey hit a slight bump in 1998, when Mr Ng suffered from a serious medical condition, which he has since recovered from.
The episode reinforced the couple's philosophy of saving for a rainy day and the need to beef up the family's financial security.
The couple have a daughter, Tara, 14, and a son, Asher, 11. Mr Ng is an operations manager at a watch retail company, and Ms Ong is a general manager with a fashion retailer.
WHAT ARE YOUR FINANCIAL GOALS?
When we were in our late 30s, we started to think what our life would be like in our 50s and 60s - would we still be employed then?
We realised that we would need a backup fund for retirement, which we could also draw on to pay for our children's further studies, if needed.
WHAT HAVE YOU DONE TO ACHIEVE THESE GOALS?
Compared to when we were in our 20s and 30s, we have slightly more disposable income now.
Instead of putting the funds in a bank, which gets a low interest rate, we buy insurance to get coverage, and to also beat inflation.
About 20 per cent of our monthly household income goes to paying for insurance, and we also save 20 per cent on top of that.
In the family, we have about 20 insurance policies in total - from life plans to short-term endowment funds for ourselves and longer-term ones for the children.
A few years ago, we bought investment-linked plans which, over a maturity period of 20 years, offer projected returns of between 4 and 8 per cent.
Because of Luke's earlier medical condition, many insurance companies do not want to cover him. Manulife has an endowment plan called ManuWealth Secure, which does not require underwriting but still offers coverage for death, permanent disability and terminal illness.
HOW ARE YOU PLANNING FOR YOUR CHILDREN'S FUTURE?
When Tara and Asher were just a month old, we bought them limited-payment whole life protection plans, which can be passed on to them to manage when they reach the age of 20.
Hopefully, these funds can give them a head start later in life, such as when they want to buy their first home, or get married.
WHAT LIFESTYLE DO YOU ENVISION FOR RETIREMENT?
We want to slow down and enjoy life. Spending time with the family will always be important. We want to paktor (meaning "go dating" in Cantonese) too.