Before you start thinking for your child, you need to ensure your financial future is secured when you eventually retire. Again, the longer you have to accumulate your retirement nest egg, the less stressful it will be.
Unlike planning for your child’s education where you may have other financing options, you cannot afford to have a shortfall for your retirement. A shortfall will mean you are either dependent on your children, or forced to continue working in your old age in order to afford your daily living expenses.
While it’s easy to assume you simply need to work longer if required, the reality is that people fall ill, get injured or become redundant in their occupation. It’s also not a guarantee that you will be able to continue earning the same salary when you get older.
This uncertainty makes it important to start planning for your retirement as early as possible. The government has taken an active role in preparing Singaporeans for retirement via CPF and the CPF LIFE scheme, the Supplementary Retirement Scheme (SRS), the lease buyback scheme, and several others.
While these options are available for all Singaporeans, you cannot assume that they will be sufficient for your retirement. You need to crunch the figures for yourself to know how much you need and ensure you have a plan that gets you there.
You can take advantage of retirement products such as the AIA Retirement Saver (III) to supplement your retirement income with guaranteed monthly payouts over a 15-year period. Moreover, for those who are risk-averse, this policy guarantees your capital, while striving to earn a non-guaranteed yield of 4.69% per annum.
Other ways to grow your retirement nest egg include investing in properties, stocks or bonds.