What the expert says
SINGLES in their 30s, who have comparably fewer financial commitments than those who are married, should save and invest as much as they can.
This is the advice that Mr Gregory Fok, director of sales for Manulife Singapore, has for Mr Viknesh Jayakumar.
GET COVERAGE WHILE YOU ARE HEALTHY
Singles in their 30s should obtain comprehensive protection for medical conditions and hospitalisation when they are healthy.
This is because they may not be able to get insurance coverage in full, should they suffer from a medical condition or have a history of illness. In some cases, they might need to pay extra premiums or be excluded from coverage of certain medical conditions, including symptoms resulting from the condition.
PROTECT YOUR INCOME
Income protection is also vital for working adults to protect their earning ability should a sickness or an injury hinder them from pursuing their career.
At this life stage, they should look at retirement planning in greater detail and consider boosting their retirement-plan contribution as their career progresses.
BUILD UP A SAVINGS BUFFER
It is good that Mr Viknesh has been saving a major portion of his income for the future.
He needs to be self-insured due to his pre-existing medical condition, by building up a significant buffer of savings in case he requires medical attention.
This would bring into question his objective of buying property. If it's for investment purposes, he should note that property is a long-term commitment and not considered a liquid asset, especially in a downturn. His investments and assets should be relatively liquid, in case he needs health-care funding.
Mr Viknesh can consider a stream of income for his parents, to ensure that they are well taken care of, regardless of his medical condition.
BEWARE OF FINANCIAL RISKS
Mr Viknesh has indicated that he invests in forex. While forex may generate potentially higher returns, he should note the risk that comes with it, such as the potential risk of overleveraging.
He should be mindful of the duration of investment as he may need to hold out longer than expected and even be required to cut losses.
To manage such risks, he can set a limit on the amount allocated to forex trading, size the right bet to avoid overtrading, research and diversify his pairings and hedge his risks.
BUILD A REGULAR RETIREMENT INCOME
Daily simple pleasures may seem affordable now, but they can rack up a huge sum during retirement.
For example, a breakfast for two at $6 per day can come up to more than $54,000 over 25 years.
Mr Viknesh can consider Manulife I-Gen for building his retirement income. I-Gen is simple to apply for, as it does not require medical underwriting.
With just a 10-year premium, he can enjoy yearly coupons of up to 3.87 per cent of the sum insured for a lifetime.
Each yearly coupon comprises a guaranteed 2 per cent and a non-guaranteed 1.87 per cent of the sum insured, starting from the 10th anniversary of the policy.
Under this plan, he can continue to enjoy a regular stream of income for the rest of his life.
For more information on retirement solutions, visit www.manulife.com.sg or call 6833-8188.