Since CPF LIFE is not on the cards until you turn 65, you may need to cater for other sources of cashflow to support yourself in retirement. One of Singaporeans’ favourite investment is properties, which generate a passive monthly rental income while enabling investors to also realise capital gains when the market performs well.
Younger investors are increasingly turning to stock investments. Companies and Real Estate Investment Trusts (REITs) that provide regular dividends can also supplement your retirement income.
However, during economic downturns, these two asset classes may be affected by market forces. This could strip you of passive income or a force you to realise a loss in asset value. You need to be ready for these scenarios as an early retirement will likely mean spending over 30 years in it, and facing one or more economic downturns.
Another way you can add an income stream in your retirement is by purchasing a retirement product such as AIA Retirement Saver (II), which provides a regular stream of guaranteed monthly income from ages 55, 60 or 65 for a period of 15 or 20 years with the potential to receive non-guaranteed dividends.