Skip to main content
  • Search
  • AIA Singapore
  • Our Products
    • Life Insurance
    • Medical Insurance
    • Critical Illness Insurance
    • Disability Income Protection
    • Accident Protection
    • Savings
    • Investments
    • Platinum
    • Travel & Lifestyle
    • AIA Vitality
    • Employee Benefits
    • Corporate International Medical
  • Life Matters
    • Health Matters
    • Wellness Matters
    • Money Matters
    • Wealth Matters
    • Your Financial Needs Matter
  • About AIA
    • Our Leadership Team
    • Environmental, Social and Governance
    • Careers
    • Media Centre
    • Awards
    • Our Top Awardees
    • MDRT Members
    • AIA Financial Advisers
    • AIA Brunei
  • AIA Vitality
    • About AIA Vitality
    • How It Works
    • Rewards & Partner Benefits
    • Join AIA Vitality
  • Help & Support
    • Contact Us
    • ONLINE PAYMENT WITH AIA PAY EZ
    • AIA HealthShield Support
    • Lodge a Complaint
    • FAQs
    • Form Library
    • Submit a Claim
    • Notices To AIA Policyholders
    • AIA Funds Information
    • AIA Annual Fund Reports
    • AIA's Participating Fund Commentaries
    • Consumer Guides
  • My AIA
    • My AIA SG
    • My Rewards
    • AIA Altitude
    • Make Payment Online
    • Submit a Claim
    • Request HealthShield Pre-Authorisation
    • FSC Access
    • Bank Partner Access
    • FA Broker Partner Access
    • eBenefits
  • AIA Vitality
    Visit the AIA Vitality website
  • YOUR FINANCIAL NEEDS MATTER
    Explore our financial calculators and resources for your long term and short term goals at different life stages.
  • Recent Promotions
    Find out more about our latest campaigns and promotions
AIA
AIA Logo AIA Logo
  • Our Products

    Our Products

    Find our products and services according to your protection needs.

    See more
    YOUR FINANCIAL NEEDS MATTER

    Explore our financial calculators and resources for your long term and short term goals at different life stages.

    EXPLORE NOW

    Recent Promotions

    Find out more about our latest campaigns and promotions

    See more

    For Individuals

    For Business

    • Life Insurance

      Protect your loved ones’ future from life’s uncertainties

    • Medical Insurance

      Adequate coverage for medical bills so you can focus on getting better

    • Critical Illness Insurance

      Protect against the financial burdens of critical illness

    • Disability Income Protection

      Protect your ability to earn an income.

    • Accident Protection

      Be financially prepared for the unexpected

    • Savings

      Start planning early and fulfil your saving goals.

    • Investments

      Make your money work harder for you – your dreams matter

    • Platinum

      Plan your enduring legacy, and share it with the generations to come.

    • Travel & Lifestyle

      Cover your personal belongings from loss or damage

    • AIA Vitality

      AIA Vitality is one of the most comprehensive wellness programmes with a wide spectrum of tools and benefits that target different aspects of your health.

    • Employee Benefits

      Secure your company’s most important asset through our market-leading domestic solutions

    • Corporate International Medical

      Give your local and international employees world-class healthcare with our corporate international medical solutions.

  • Life Matters

    Life Matters

    We take care of the matters of your life because your life matters

    VIEW ALL IN LIFE MATTERS
    • Health Matters

      Kick-start your journey to better health

    • Wellness Matters

      Live life to the fullest

    • Money Matters

      Prepare for your lives ahead

    • Wealth Matters

      Start protecting your wealth and enabling succession and legacy for your generations

    • Your Financial Needs Matter

      Explore our financial calculators and resources for your long term and short term goals at different life stages.

  • About AIA

    About AIA

    For almost a century, AIA has served the ever-changing needs of millions of people all across the Asia-Pacific region.

    Healthier, Longer, Better Lives

    • Our Leadership Team

      The Executive Committee and Board & Board Committees of AIA Singapore

    • Environmental, Social and Governance

      Our ESG commitment aims to deliver value to all our stakeholders

    • Careers

      Explore opportunities to work at AIA

    • Media Centre

      News and information about AIA

    • Awards

      Check out our awards and achievements over the years.

    • Our Top Awardees

      Presenting our top performers of FY2020

    • MDRT Members

      Presenting our top performers of FY2020

    • AIA Financial Advisers

      Who we are, what we do. Let's forge a partnership that lasts beyond a lifetime.

    • AIA Brunei

      Find out more about our branch office

  • AIA Vitality

    AIA Vitality

    AIA Vitality supports and motivates you every step of the way towards achieving your health goals. What’s more, get rewarded for healthy choices and earn points when you get active, eat well and complete Health Checks!

    Find Out More
    • About AIA Vitality

      AIA Vitality is a comprehensive programme that motivates you to keep fit and helps you to manage your health.

    • How It Works

      ​Discover how you can live a healthy lifestyle by staying active, eating well and maintaining good health with AIA Vitality.

    • Rewards & Partner Benefits

      Discover the rewards and benefits you have unlocked with your AIA Vitality points.

    • Join AIA Vitality

      Join us today, and get motivated to live a healthier, longer and better life!​

  • Help & Support

    HELP & SUPPORT

    We strive to assist you for all your inquiries with high touch customer service.

    CONTACT AIA
    AIA COVID-19 Support Programme

    Support Programme to extend the grace period for payment of premiums due up to 180 calendar days for customers who are financially affected by COVID-19

    Proceed to Page

    For Customer Support

    For Resource/Useful Links

    • Contact Us

      Cannot find the answer in our FAQ section? Contact us now

    • ONLINE PAYMENT WITH AIA PAY EZ

      Manage all your AIA payments from one convenient location

    • AIA HealthShield Support

      Quality Healthcare Specialist Partners exclusively for AIA HealthShield Gold Max customers

    • Lodge a Complaint

      On the sale of insurance products under the Financial Advisers Act (FAA)

    • FAQs

      Have a question? You may find the answer here

    • Form Library

      A selection of forms you can download, fill in and send back to us

    • Submit a Claim

      Need to make a claim? Learn more about the claim process.

    • Notices To AIA Policyholders

      Useful information for policyholders

    • AIA Funds Information

    • AIA Annual Fund Reports

    • AIA's Participating Fund Commentaries

    • Consumer Guides

  • My AIA

    My AIA SG

    Exclusive for AIA policyholders and Vitality members to conveniently access policy information, Vitality membership and rewards

    Register For My AIA SG

    If you are an AIA customer, and do not have a login, you can register for My AIA SG account here.

      Customer
    • My AIA SG

      My Rewards

      AIA Altitude

      Submit a New Request
    • Make Payment Online

      Submit a Claim

      Request HealthShield
      Pre-Authorisation

      Distribution
    • FSC Access

      Bank Partner Access

      FA/Broker Partner Access

      Employee Benefits
    • eBenefits

    My AIA SG

    Exclusive for AIA policyholders and Vitality members to conveniently access policy information, Vitality membership and rewards

    Register For My AIA SG

    If you are an AIA customer, and do not have a login, you can register for My AIA SG account here.

      Customer
    • My AIA SG

      My Rewards

      AIA Altitude

      Submit a New Request
    • Make Payment Online

      Submit a Claim

      Request HealthShield
      Pre-Authorisation

      Distribution
    • FSC Access

      Bank Partner Access

      FA/Broker Partner Access

      Employee Benefits
    • eBenefits

    Home

    My AIA Perks

    Logout

  • Search
  • Contact Us
    • Book an Appointment

    • Contact us

Money Matters
Prev | Next
  • {{title}}

    {{label}}
  • Why It Is A Mistake To Delay Planning For Retirement

    AIA Singapore


    Many of us do not start thinking about planning for our retirement until we're much older. However, this is a mistake because you need time for your plans to bear fruit, and starting early is one of the best ways to ensure that it does. 

    A recent study by AIA showed that Singaporeans generally spend 2.5 times more on their children’s needs than their retirement planning, with some even neglecting it altogether. But don’t forget that your child also needs you to be financially prepared for your retirement, so that they won’t have to be stressed out about having enough to support your retirement expenses.

    sgbudgetbabe-infographic-planning-for-retirement

    Planning early will make a huge difference to your retirement years

    As part of the sandwich generation, it is even more crucial that we start planning early. My husband and started discussions about this in our first year of parenthood, as we both agreed that we did not want to become a financial burden to our children when we’re in our 60s and beyond.

    Instead, we wanted to make sure that our own retirement needs will be well taken care of, so that our children can be free to make their own financial decisions without having to be weighed down by us. This determination was cemented after personally going through the stress of having to support our growing family as well as our own ageing parents (who did not plan nor save towards their own retirement).

    The need to balance your priorities

    It is only natural to procrastinate on planning for your retirement because you’re too focused on being able to finance your present, shorter-term needs. But to defer your retirement plans would be a huge mistake, and you’ll be doing yourself (and your children) a huge disservice.

    Considering that most Singaporeans plan to retire at 60 years old, this will require at least 25 years of retirement income that we will need to plan for. If you start early, you’ll be able to leverage the power of compounded growth over time to accumulate your retirement pot of savings.

    But if you continue to put it off, you'll likely need to put aside an even higher sum of money later on, and by then, you will also have fewer tools or options available for you to choose from – depending on your age and health. The study also revealed an irony: while 70% of young Singaporean parents do not wish to be a financial burden during retirement, they may very well end up having to rely on their children, other family members and friends eventually if they face a retirement planning shortfall.

    more-than-half-of-singaporeans-are-14-years-short-in-their-retirement-planning

    Source: More than half of Singaporeans are 14-years short in their retirement planning.

    Here’s how you can start planning

    First, you’ll need to estimate how much you will need in your retirement years. By using online tools - such as AIA’s retirement calculator here – calculating that has become so much easier than before. 

    AIA-retirement-calculator-2021

    Source: AIA Retirement Calculator (2021)

    With an end goal in mind, you can now work backwards and plan concrete steps to get there.

    Next, you’d also want to make sure that you’re well protected against unexpected emergencies, such as medical bills or critical illnesses. If you have dependents (be it young children or your elderly parents), then having a life insurance with critical illness cover is also important. Plans like AIA’s Guaranteed Protect Plus (III) also often appeal to those looking to finish paying the premiums during their working years while accumulating cash value in their policy, with the flexibility of encashing it later on to supplement one’s retirement income if you wish to.

    Once you have your bases covered, it is time to look at how you can grow your savings by leveraging on the power of compounding over time.

    Please don’t be like the 92% of Singaporeans who rely on bank deposits as the most popular savings tool of their choice. Instead, learn from the savvier 21% who are growing their wealth by also supplementing with investment tools.

    How to achieve your retirement plans

    The best retirement plan is one that you can consistently stick to, without giving up.


    1. Calculate CPF Life as your base

    As a Singaporean, don’t forget to factor in your CPF into the equation. Find out how much you can expect to have from CPF Life as your base foundation, since the national insurance annuity scheme provides you with a monthly payout no matter how long you live. Of course, relying on your CPF Life alone may not be enough, especially if you have a desired retirement lifestyle in mind, so this is where you’ll need to start building the rest of your retirement pot.

    cpf-board-infographic-planning-for-retirement

    Source: CPF Board

    2. Optimise your current resources

    Next, look at your current resources. How much cash savings do you have? And are you simply leaving it in your bank account to earn paltry interest, or actively growing that through investments?

    Some of you may even have funds sitting idle in your Supplementary Retirement Scheme (SRS) account – to be more accurate, 26% of the total contributions in 2020 ($12 billion) are held in cash. For those who invest their SRS monies, insurance and direct investments continue to be the most popular tools used.

    ministry-of-finance-infographic

    Source: Ministry of Finance

    Insurance retirement plans that allow you to invest using funds from your SRS account can help. They don’t have to be expensive either – for instance, AIA Platinum Retirement Elite starts with premiums from $500 a month, and you can then set the monthly retirement income you wish to receive upon your target retirement age. It is no wonder that such plans focusing on sustainable long-term wealth strategy to help grow your wealth and build your target retirement income for retirement continue to remain popular. To further ensure that your desired retirement lifestyle is not impeded by rising inflation rates, you can check if your insurer allows you the flexibility to receive a yearly stepped-up income as well (similar to you opting for the Escalating Plan on CPF Life).

    When you plan for your child’s future, remember to also plan for yours.

    Find out how we can help.

    3. Plan how much to set aside each month

    To get to your goal, you need to be disciplined in putting aside money each month towards your retirement. The good news is, the earlier you start, the easier it is.

    jpmorgan-2020-guide-to-retirement

    Source: JP Morgan’s 2020 Guide to Retirement

    For instance, even setting aside a monthly amount of $400 (or a lump sum of $5,000 each year) can go a long way when you allow this to compound over time. In the chart above, you can clearly see that because Susan started earlier, she still emerges with more money than Bill, even though Bill sticks to his plan for a longer duration (30 years) and invests more capital (3 times more) than she does.

    That is the power of starting early – even if you were to pause later on in life, your money can continue to grow if you’ve parked it in the right financial instruments.

    In choosing which tool to grow your savings with, you’ll need to ask yourself, how confident are you when it comes to investing, and are you reasonably good at it?

    Whether you prefer to manage your own investments or outsource it to the professionals (e.g. BlackRock or Wellington Management, just to name a few), there are different options to suit your discipline level, skill, budget and even time (or the lack of it, when it comes to actively managing your own investments for growth).  

    4. Factor in your property

    If you have a property, don’t forget to include that into your plans as well. Will you be staying in your current residence all the way, or do you intend to downsize (or “rightsize”) when you’re older and your kids have moved out?

    Liquidating your property can sometimes help to unlock cash for your retirement years as well. This was what we did for my parents (neither of them have much savings for retirement) since the house was now too big for just the two of them.

    5. Review, adapt and change

    It is prudent to review your retirement plans every few years to ensure that you are on track to meeting your goals. Another good time to do so is whenever there is a significant change in your life milestones, as that may necessitate a change in your retirement plans as well.

    For instance, if you end up having more children, then you may be faced with the prospect of having lesser cash flow to invest during their younger years (especially as preschool and tuition fees can cost quite a bit to support!). This may then mean you have to either push back your target retirement age, or perhaps consider if taking a more calculated and aggressive risk approach (such as increasing your exposure to equities, for instance) would be more appropriate.

    how-much-do-singaporeans-need-for-retirement

    Should you top up your monthly savings for investments, or take on higher risk in your portfolio?

    Take the above illustration for instance: these portfolios, accessible via AIA Platinum Retirement Elite, are managed by AIA Investments and powered by some of the world’s top institutional asset managers (Baillie Gifford, Wellington Management and BlackRock) which most ordinary retail investors may find difficult to get access to. 

    Conclusion

    As you can see, planning for your retirement need not be difficult. And the best part is, the easier you start, the easier it will be for you to achieve your retirement goals since you get to ride on the power of compounding your money over time.

    Procrastination, on the other hand, will mean you’ll have a much harder time catching up in your later years.

    It is easy to get caught up in the pressing day-to-day matters such as climbing the career ladder and taking care of our family that we forget, or push aside planning for our own retirement. But it can be as easy as 1-2-3:

    1. Optimise what you currently have.
    2. Set aside a sum each month.
    3. Invest your cash.

    So start thinking about your retirement today, and if you’re married, have a chat with your spouse about theirs as well.

    Author: Dawn Cher, SG Budget Babe.

    Content originally published at https://www.sgbudgetbabe.com/2021/07/a-mistake-to-delay-planning-for-retirement.html

    Disclosure: This post is written in collaboration with SG Budget Babe. All opinions are that of author's, and information referenced is accurate as of 29 July 2021.

    This advertisement has not been reviewed by the Monetary Authority of Singapore.

    Related Articles

    • SHOULD YOU RIGHT-SIZE YOUR HOME WHEN YOU RETIRE?
    • 5 EASY WAYS TO BUILD YOUR RETIREMENT NEST EGG IN SINGAPORE
    • INSURANCE OR INVESTMENTS - WHICH SHOULD COME FIRST?

    How We Can Help

    AIA Guaranteed Protect Plus (III)

    Savings

    AIA Guaranteed Protect Plus (III) is designed as a single solution that offers wider coverage for your protection needs. With its unique multiplier feature, it gives you the ability to boost your coverage by up to 5 times while ensuring affordability. This plan also provides stable cash value that is accumulated over time.

    vitality

    AIA Platinum Retirement Elite

    Wealth Management

    AIA Platinum Retirement Elite is an SGD and USD dominated investment-linked plan focused on maximizing wealth creation for your retirement years.  It is uniquely crafted with the flexibility to adapt to your changing needs. Leveraging on the expertise of world-class asset managers and a sustainable long-term wealth strategy, we’ll help you arrive at the retirement you deserve.

    Get in touch

    What’s your name?*

    What's your mobile number?

    What's your email address?

    Are you an existing AIA Singapore customer?*

    Area of concern:




    Thank You

    Partial NRIC / Passport / FIN No.

    (last 4 characters)

    Date of Birth

    CONTACT AIA

    1800 248 8000

    1 Finlayson Green
    Singapore 049246
    View Details

    BOOK AN APPOINTMENT

    GO TO

    AIA.COM

    Visit our corporate site to learn more about AIA.
    Go To
    CONTACT AIA

    1800 248 8000
     

    1 Finlayson Green
    Singapore 049246

    View Details

    BOOK AN APPOINTMENT

    GO TO

    AIA.COM

    Visit our corporate site to learn more about AIA.
    OUR INSURANCE PRODUCTS
    Life Protection
    Medical Protection
    Critical Illness Protection
    Disability Income Protection
    Accident Protection
    Savings
    Investments
    Platinum
    Travel and Lifestyle
    EXPLORE AIA
    AIA Retirement Solutions
    Your Learning Buddy
    AIA Altitude
    Careers
    AIA Vitality
    Sitemap
    USEFUL LINKS
    Recent Promotions
    AIA Funds Information
    FAQs
    Form Library

    This website uses cookies for the purpose of enhancing your user experience. You can find more information on the types of cookies we collect, what we use these for, and how to manage your cookie settings in our Cookie Policy and AIA Personal Data Policy (Singapore).

    ABOUT AIA
    Explore AIA
    AIA Retirement Solutions
    Your Learning Buddy
    Wealthbeing by AIA
    Careers
    AIA Vitality
    Sitemap
    OUR INSURANCE PRODUCTS
    Life Protection
    Medical Protection
    Critical Illness Protection
    Disability Income Protection
    Accident Protection
    Savings
    Investments
    Platinum
    Travel and Lifestyle

    This website uses cookies for the purpose of enhancing your user experience. You can find more information on the types of cookies we collect, what we use these for, and how to manage your cookie settings in our Cookie Policy and AIA Personal Data Policy (Singapore).

    USEFUL LINKS
    Recent Promotions
    AIA Funds Information
    FAQs
    Form Library
    Digital Payments
    Security Advisories

    Copyright © 2022 AIA Group Limited and its subsidiaries. All rights reserved.
    Terms of Use | AIA Personal Data Policy (Singapore) | Cookie Policy