Ever thought about what it would be like to retire early? To achieve financial freedom to support your lifestyle without having to work? In actuality, it’s not exactly an impossible feat. All it takes is a little bit of planning, some forward thinking, and of course, plenty of discipline.
Now take a few minutes to think about your ideal retirement age. Having an idea of your financial landscape will help you determine what should be your right investment plan. Don’t forget, planning a retirement at 40 means that you have 25 less years to save compared to retiring at 65. You may realise that relying on your CPF alone will definitely not be enough to ensure financial independence after retirement, especially with the ever-increasing cost of living, economic inflation, and potential unexpected emergencies.
What you need is an immediate savings goal – the earlier you start, the more you’ll have by the time you’re ready to retire. Although you may have a well-calculated plan in mind, it’s always best to aim higher.
Pay yourself, not just your bills
Setting aside at least 20% of your monthly income is a good start and prevents impulse spending. Park it into a savings account giving you high returns, such as our CIMB FastSaver, or look to fixed prices funds which pay consistent annual, non-taxable, no-sales-charge dividends.
Consider Additional Investments
While you may already be on the right track to a financially independent retirement, there are a host of opportunities to consider without compromising on your needs or your lifestyle.
The Supplementary Retirement Scheme was introduced by the government to allow Singaporeans to save more for their retirement years, beyond their CPF savings. The benefit? Investing in SRS and SRS-approved financial instruments help with reducing your taxable income, and allowing you to earn even higher returns for your eventual retirement.
Beyond keeping you and your loved ones protected for the unexpected, there are many insurance plans that combined both protection and investment These offer the flexibility of dividing your premiums into insurance protection and investment funds.
Another popular option, Unit Trusts have the potential to deliver higher returns compared to traditional savings plans. You may diversify your investment portfolio as you gain exposure into professionally managed investment opportunities in local, regional and global markets.
Finally, explore opportunities that create passive income streams to supplement your income and boost your savings. These are ventures requiring minimal effort and upkeep, yet able to earn meaningful returns to boost your retirement kitty.
Speak to a financial adviser for more nest egg opportunities so you can look forward to retiring restfully, happily and comfortably.
Pushy persuasion tactics
You may want to steer clear of investment sellers who are hesitant to share additional information or risks, and uses hard-sell tactics. Instead of disclosing the truth, these fraudsters can use different persuasion tactics to get you involved in their schemes. This can include cold-calling and purporting to be from a reputable institution. They then try to set up a face-to-face meeting, asking you personal questions trying to persuade you to commit with limited time offers.
Always get information in writing. Conduct your own research and bring along an acquaintance when agreeing to meet in person.
Important Notes & Disclaimer
This article is brought to you by CIMB as part of our ongoing efforts to raise the level of financial literacy amongst Singaporeans. Financial knowledge and understanding are key to making well-informed and meaningful financial decisions that will improve everyone’s well-being. This in turn, achieves CIMB’s purpose of advancing customers and society.
This is intended for general information only, and does not take into account the specific objectives, financial situation or particular needs of any person. The reader may wish to seek advice from a financial adviser before making a commitment to a product.