Be it if you are currently in your 30s or 40s, you may have considered planning for your retirement or putting aside some savings to help you stay afloat in case of an emergency. Not every one is hardworking to plan early and some might not have the ability to do so and eventually turn to licensed money lenders such as banks to get personal loan. Some of you though, may be thinking, retirement? I have many years left to worry about that! It might seem like many years but well, guess what, you can never plan too much. Nobody ever looks back in their 50s and regrets making responsible decisions to secure their future well in advance. In fact, most people nearing their retirement age scramble to save enough, and a majority of retired people say they underestimated the amount of money they will eventually require. Most people could do with more savings and it is never too early to start building your nest, especially if your career is flourishing at the moment. So where can you begin?
1. Consider your goals
Retirement means different things to different people. For some it is the ability to spend time with their grandchildren, for many it is the start of a whole new chapter in life. But absolutely everybody would like to be financially independent at the time of retirement. So ask yourself, where do you want to be post-retirement? Are there any passions or hobbies that you would like to pursue? Perhaps you see yourself travelling the world. Some may prioritise leisure, while others may be thinking of securing their family financially. Whatever your goal might be, It is important to estimate your needs well in advance so that when the time approaches, you are free of stress and can truly enjoy retirement as the blessing that it is.
2. Keep medical costs in mind at all time
Even if you are the kind of person who desires a simple, modest life post-retirement, you have to consider medical costs. As you grow older, your body becomes more and more vulnerable to chronic illnesses. Lifestyle plays a major role in determining longevity, but general fitness is not a foolproof guard against emergency situations. The biggest causes of death such as cancer, strokes, pneumonia, and coronary artery disease can go undetected for a long time before symptoms begin to show. These illnesses do not announce themselves, and after a certain age it is important to get regular health check-ups. This expenditure is not only indispensable, it can always exceed your estimation. To add to this, medical costs are consistently rising. Medical inflation rate in Singapore has been at about 10% in 2016 and 2017. This is higher than the global average.
3. Account for inflation
Inflation is not just occuring in the medical sector. You might think it is enough to simply put aside money periodically, but consider general inflation year after year. Your savings twenty years from now will not have the same value as they do today. Even in a relatively stable economy, prices of goods and services rise over time. Economic fluctuations can be unexpected and catch people off guard. For instance, the latest Singapore Budget 2018, a rise in GST is one of them. In few more years time, it will go from 7% to 9%. Simply accumulating savings is not enough in and of itself. Singapore ranks second in the list of most expensive places to live in Asia, and this is set to increase or at least remain consistent in the coming years. So what can you do?
4. Explore and research on the various investment options
Consider using your savings to invest in fixed deposits, securities, bonds, start ups etc. This means your money can grow over time instead of remaining stagnant in a savings account. Taking informed decisions at the earliest can lead to a happy retirement where you have the freedom to pursue your passions without compromising on the financial security of your family.
Ideally, you want to find investments that provide a steady and secure flow of money. But certain high risk investments might be a good idea if you are looking for short term gains and are willing to put in the time and effort.
a. Property is a safe bet
Your parents always told you, property is a safe investment. This notion is popular for very good reason. One of them is the fact that property keeps appreciating in price, especially in urban areas. This is true in Singapore as well, with property prices rising consistently. It also creates the possibility of earning rental income in the future. With services like Airbnb becoming popular, the ways of earning an income through property have expanded. It might be a large sum to invest at once but it will serve you in the future. At the very least, having a roof over your head will never go out of style.
b. Equities have enormous potential
Investing in stocks is considered riskier, but a good investment can bring you short term (and long term) capital gains. One advantage of equities is the liquidity, the stocks can be sold readily if you need money at hand. This is a less secure option than investing in properties, but has a higher potential for profit. As a general rule, the more money you invest, the more likely you are to make big amounts. However, finding worthwhile investments can be a daunting process.
5. Consult an expert
It can be easy to lose your way when there are so many options. When in doubt, seek the assistance of an expert who can help you navigate the world of investments. Finding a reliable financial consultant will give you valuable insights and tools that you may take years of hit and trial to figure out on your own. A consultant can advise you on the pros and cons of different investment options and suggest the best one for your needs. A couple of sessions can give you clarity on how to proceed. It is well worth the time, effort and money saved. But what if I don’t have enough savings to make such big investments?
Don’t worry! There are many options available if you are willing to take this crucial step for your future. You don’t have to wait for several years to amass enough savings and watch investment opportunities pass by. Lack of savings at the moment should not be an impediment to your planning process. Visit a moneylender in Singapore who can provide you a personal loan or property loan at affordable interest rates. There are many moneylenders in Singapore who offer flexible repayment plans. Reach out today and find out your options!