Questions To Ponder Whether Are You Ready For Your Retirement?

After seeing so many Clients (both the young and the matured), do you know that most of them have no considerations and are still not prepared for Retirement? This is something alarming and should be brought to your immediate attention!

What Is Retirement?

This is the time period

  • Whereby you should have stopped working (for goodness sake, after working so many years in your life)!
  • Whereby you should enjoy your life to the fullest – see the world, have quality time with your loved ones, enjoy your hobby, enjoy good food (please do not just survive on bread) or anything that has been your wildest dream!
  • Whereby you have not worries for money – you can have built up a Residual Income, or have Ample Savings (money being worked for you all these while)

How Long Can Your Retirement Be?

In today’s context, most Singaporeans would choose to retire at the age of 65 and with life expectancy on the rise, you and I can live to the age of 80 (for men) and to 88 (for women), and that can amount to nearly 20 years of retirement.

How Much Do You Need For Your Retirement?

There’s no standard amount, but a study has been done, and most people would prefer to have $1 million for their retirement (did I hear a waaaaa?). I know this amount can only be very much dreamed about and good to have.

But if you do need a number to make sure you are somehow near to a comfortable retirement, this is a sample calculation:

  • Decide your desired Retirement Age (e.g. 65)
  • Decide your desired Expiry Age (e.g. 80) (I do know of people who want to die the moment they reach 65, sigh!)
  • Get the Difference of the above two, let’s call it “X”
  • Based on your current income, foresee how much it will be before you retire (e.g. $5,000/month) and decide how much (%) of that last income you will like – 100% (for the best time of your life), 70% (for a rather comfortable life), 40% (for a simple life)
  • Once you get that value, let’s call it “Y”, then get the product of “Y” and “X”, and this will be the amount you will need to last your Retirement.

If you have based on that $5,000 per month (that’s $60,000 per year) therefore a 15 years of retirement can easily bring you:

  • $900,000 for the best time of your life
  • $630,000 for a rather comfortable life
  • $360,000 for a simple life

Question is, will you have any amount of savings or residual income that can bring you near to the amount above?

If not, what would you do today to start preparing yourself for your retirement (please… no negative thinking)?

Some Questions To Ponder If You Should Start Planning

  • Do you think your current assets (savings account, stocks, shares, unit trusts, properties) are enough for your retirement?
  • Do you think these will be enough to meet your retirement needs (daily living and lifestyle)?
  • If these are not enough, how do you plan to go about meeting the shortfall that you have (start saving or investing?)?
  • What are the “standbys” should you be unable to retire (even at the simplest) as planned?

Some Questions To Ask How You Will Feel

  • How would you feel if yu were unable to retire as planned?
  • What would be the consequences if the provision you have is not enough?
  • Can you or do you want to depend on your children (or your parents, if they are still around) for financial support during your retirement?
  • How would you and your other half cope if you are unable to support your basic needs?

These are some of the considerations that you need to make and to consider for your retirement planning. Once you have decided an age to retire, it’s a good time as well to start looking into areas to help make sure that you are ready for your Retirement!

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