The first and most obvious safety net is your CPF. You contribute a hefty chunk of your salary each month and will be able to drawdown from CPF LIFE in your senior years. This is primarily meant to provide you with a basic standard of living in retirement.
Next, you’re also contributing to another large asset throughout your working years – your home. If required, there are several ways you can unlock this asset in your retirement. The easiest ways to do this is by a) renting out spare rooms once your children leave to start their own families; b) sell back part of your HDB housing lease to encash unrequired lease; or c) downgrade to a smaller home.
While working, you would also have spare cash left over at the end of the month. Part of this must be used to invest to build your retirement nest egg. You don’t want to wait till the final stretch of your career to realise this. Ideally, you should start from your first paycheque.
If you’re not sure how to start, the AIA Pro Lifetime Protector (II) is an investment plan that helps take the complexities out of investing. We help you avoid pitfalls of emotional investing and timing the market through three Guided Portfolios – “adventurous”, “balanced”, or “cautious” – offering you access to various risk levels to optimise your returns for the long-term.
At the same time, we also create another layer of safety net for your loved ones. With comprehensive coverage on your investment plan, it ensures that you and your loved ones are protected in the unfortunate events of death, disability or multi-stage critical illnesses – that rob you off your ability to build this nest egg for you and your loved ones.