People tend to neglect retirement planning for many different reasons, ranging from not knowing how to start, to procrastinating, to thinking they will just continue working their entire lives.
It’s easy to see that not knowing how to start planning for retirement or delaying the process are not great reasons to disregard retirement planning. However, the notion of working into your golden years can seem achievable and even admirable. In fact more Singaporean seniors want to work into their 80s and 90s not only for income, but to keep mentally and physically active as well.
While it may be reasonable to not end up retiring, there remains reasons why everyone still needs a prudent retirement plan.
1. Uncertainties over your health and your job prospect
Things don’t always go to plan. Companies collapse, job functions become redundant, people fall ill or get injured. While no one wishes for any of these things to happen, they unfortunately do. All the time.
Your decision to keep working into your retirement may not always be yours to decide. An accident or retrenchment might rob you of your ability to stay employed and earn a salary at any time. Should anything happen to your family member, you may also find it necessary to take time off work to care for your loved one.
As you get older, you will also find it more challenging to restart your career after losing your job or being made redundant. The pace in the working world is accelerating, and your skillset may be outdated if you have taken several years off to recover from, or take care of someone with, a medical condition.
To cushion against potential financial impacts of such uncertainties in your life, you are typically encouraged to maintain a liquid emergency savings fund worth between six and 12 months of your expenses before you find employment again, and to buy adequate health and life insurance to protect your and your family’s standard of living should the unforeseen happen.
However, you still need a retirement plan to act as a safety net in your golden years. With AIA Platinum Wealth Elite, you can continue charting a fulfilling and long career, while also enjoying peace of mind thanks to protection benefits, and the option to make cash withdrawals during your retirement.
If everything goes to plan, you can use this to supplement your retirement income. If you are unable or choose not to work during your golden years, you have an added financial safety net to fall back on.
AIA Platinum Wealth Elite gives you the ability to tap on our dedicated investment professionals with AIA Investments and connects you to best-in-class investment management companies, such as Baillie Gifford, BlackRock and Wellington Management, via one of three tailored funds – AIA Elite Conservative, AIA Elite Balanced and AIA Elite Adventurous – based on your risk preferences.
If the unforeseen happens, AIA Platinum Wealth Elite provides a lifetime of wealth protection (up to age 122) with a death benefit pay-out and terminal illness benefit. It also provides you security in the initial years of wealth accumulation, while your investments have not had the time to sufficiently compound, with guaranteed protection in the first 15 years.
2. Reduced income earning potential, coupled with increased healthcare costs
While there’s no denying that experience counts, an employee over the age of 70 must also recognise that they might not be able to work as hard or long, or have up-to-date work skills. Moreover, they also will not be seen as the future of the company.
At the same time, your healthcare costs will only continue to rise as you age and become more susceptible to health conditions. As such, retirement planning is critical to ensure you have adequate financial resources when you need it the most.
3. You may have a change of heart
When you’re young and full of energy, it’s easy to think that you are invincible and will enjoy working for the rest of your life. However, the reality is that as you enter different phases of your life, your priorities will likely shift.
Without a retirement plan, you are not giving yourself the option to call it quits or explore new passions (that pay less or nothing) in your golden years. The best time to start building a sizeable retirement nest egg is when you’re young. This will give you more options and a longer investment period to ride out market volatility and compound your wealth for your golden years – whether you want to continue working or not.
4. To have something to leave to your dependents
Between your life savings, CPF monies and CPF LIFE payouts, investments, and a potential continuous wages in your retirement, you might have enough to gradually draw down for a comfortable time during your golden years.
However, for those with children, grandchildren or other dependents, you might want to leave a legacy to give them a boost in their lives. This could be for their tertiary education, wedding, or seed funding (and confidence) to start a business of their own.
A comprehensive retirement plan includes factoring in how much your bequest will be at various stages of your life. This is less about safeguarding your retirement, and more about protecting your family’s standard of living and financial backing.
5. Flexibility and liquidity for your wealth goals
Regardless of what the retirement age in Singapore will be when you enter your senior years, implementing a prudent retirement plan as early as possible gives you the flexibility you need to pursue the life you want in your later years. This is where AIA Platinum Wealth Elite comes into the picture, as a comprehensive wealth accumulation and wealth protection solution.
You can also choose from a single or regular premium payments, with personalised accumulation horizon, so you are in control at all times. Coupled with life protection up to age 122, you can be assured that your family’s well-being will be taken care of – no matter what happens.