Retirement is all in the planning

Planning for your retirement is likely to be one of the most important investment decisions you make. It could dictate the lifestyle you and your family experience for many years after you decide to scale back on or stop working.

It’s never too early to start planning for retirement. However you plan to live in your golden years – travelling around the world, starting a new business or taking up a new sport, it is crucial that you map out a financial plan for a comfortable retirement as soon as possible. The later you begin, the less you’re likely to have in retirement because you won’t have as long to benefit from investment growth.

One of the more common ways to build your retirement pot is to put aside a certain percentage of your income into a savings or investment plan. The larger the percentage set aside, the greater the options available to you at retirement.

Why advice is so important

It used to be the case that an employer’s pension scheme would provide most of your income in retirement. State pensions would come next, with private provision topping up your retirement nest egg. However, this is largely no longer the case, as private pension provision becomes ever more important. For such an important and complex issue, going it alone without an adviser can be fraught with peril.

Whilst in your home country, saving for your retirement was likely compulsory (perhaps deducted from your monthly pay).  Living in Singapore, this may no longer be the case, so you should review your options.

Retirement planning issues that must be considered

An important and sometimes difficult thing to predict is where you will retire, as this is very much dependent upon your situation at that time. As there are so many unknown factors that can influence where you will retire, the lack of flexibility within local, domestic, retirement plans can make them seem like an unattractive proposition.

Secondly, in many pension schemes you may not be able to gain access to the funds or move the money before reaching retirement age. For others there may be the option to consolidate your pensions to maximise the returns you will enjoy in retirement.

These decisions are complex and need the support of an expert team, qualified and experienced in international pensions to ensure:

  • You do not lose out as a result of your decision
  • Any new solution will be tax efficient, both now and in retirement, and is flexible enough to adapt as your plans change
  • You understand if you will have enough income in retirement and the options to bridge the gap if not

Central Provident Fund (CPF)

The CPF is a compulsory comprehensive social security savings plan in which working Singaporeans, Permanent Residents and their employers make monthly contributions to the CPF and these contributions go into three accounts:

  • Ordinary Account– for housing, pay for insurance, investment and education.
  • Special Account– for investment in retirement-related financial products.
  • Medisave Account– for hospitalisation and approved medical insurance.

Here at AAM Advisory, we can offer expert assistance managing your CPF investments or help assessing your existing retirement planning.