For a start, we shall look at ways in which your lifestyle directly affects your retirement plans.
Participate in a Supplementary Retirement Scheme
SRS or Supplementary retirement Scheme is a voluntary savings scheme that gives you a tax relief each year you save for retirement. SRS in Singapore do not prohibit early withdrawals but will tax the amount withdrawn. SRS retirement savings should last until a retirement age currently set at 62 years.
However, before retirement you could use the money on your SRS account to invest in shares, ETFs, insurance, among other investments. The profit gained from SRS-funded investments is not taxable and goes straight back to your SRS account. SRS will not only save you from relief taxes, but also from profit gained through investments funded through the account. In conclusion, retirement is a crucial reality for everyone. This article should at least shed some light on the various ways to start saving for retirement in Singapore.
Most of us think that retirement savings should start when we are earning enough money. Well, there is never the right time to save for retirement. If you can, then it is advisable to start as soon as possible. However, before you sacrifice your earnings for a better future, it is important to know the nitty gritty of saving for retirement in Singapore as it is one of the most expensive Cities to live in.
The most important aspect to consider while spending your money is the inflation. If you can afford a $20 burger and a bottle of soda, you may not be able to afford the same twenty year later- assuming an inflation rate of 2% p.a. So trimming lifestyle expenditures now will come a long way in adding up to your retirement nest.
Consider these tips and you can secure a better future with more than enough retirement savings: Take CPF Seriously- If you reside in Singapore as a Permanent Resident, you should at least start applying for the CPF Lifelong income For the Elderly. If you meet certain criteria, the scheme is able to give you lifelong monthly payouts available in three categories. For instance, if you qualified for a CPF LIFE on 1 May 2016, then you should have at least $60,000 in your retirement account.
Buy an insurance Cover
It is important to look for a good insurance firm as factors like health costs will rise as you grow older. Insurance covers vary and you would have to choose the ones that fit your income, lifestyle, as well as retirement goals. Some plans provide pure protection, others have protection bundled with income, and there are those that offer regular investments allowing you to invest in a variety of funds while still having life coverage. Some investments will promise regular income streams, although at the expense of a lesser life coverage.
Another proper way to increase you retirement savings is through investment, and in particular through diversified investment. Well, diversifying your investments is the trick; put your money in different companies and have a variety of risks and returns. Invest in blue chip equities, Exchange Traded Funds (ETFs), Unit Trusts, among others. Invest in different countries, find the most developed and put some money on their stocks, buy different expertise, and mix them up with your own understanding.
Hopefully you can apply the tips and suggestions listed above to increase your wealth and savings.