If you are saving for retirement then you must consider on having the most excellent retirement plan offered in the market. You are going to depend on the retirement plan you chose by way of savings or pension once you retire. It is very important to be able to invest in various assets to have a wealthy future so you must choose a retirement plan that will provide you with such. Although there are good retirement assets in the market, mutual funds, precious metals, and real estate properties are the best ones from a money lender.
With today’s increasing living costs, you can see yourself being hindered in saving for retirement. Having money for future use is very important so saving is a must. Are you afraid of dealing with your retirement because of no savings? A retirement plan is an answer to that problem since you are going to save money while having this plan because you are obliged to do so. The logical choice is to have a savings plan with the social security being stagnant lately. With this, you are going to have multiple options in living your future the way you want it. It is very important to reduce any expenses you are going to make since it will help you in saving for retirement.
So, why should millennials in Singapore start thinking of saving for retirement early enough?
The Power Of Compounding Interest
The advantage of compounding interest is on your side. Do you know that saving a fix monthly amount for 35-45 years would guarantee you that will be adequately funded when you retire compared when you save double or triple the amount monthly for 10-20 years? The reason is the power of compounding interest that lets you earn more because of the time value.
Now, it becomes very easy to calculate what your fixed deposit needs to earn, for a safe old age. But these are times of high inflation. Frankly, fixed deposits aren’t as aggressive in earning interest, despite their security. But who is going to constantly monitor the performance of all your investments? So, you must invest in a retirement plan and let professionals worry about it. And to select the best pension plan for you, you’ll have to access the online tool called retirement calculator.
The earlier you start investing, and the greater you save, the lesser the risk in your pension planning. Who knows, compounding interest could more than take care of all your retirement needs. When that happens, you are totally secure because you are financially prepared, come what may.
How do you begin?
Yes, everybody has read in the Mathematics textbook back in school what is simple interest and what is compounding interest. But who remembers it now, after all these years? And even if you do, it will take a long time to calculate the future value of your investment in a product. But when you have to repeat the process with all the products you are comparing before investing, the calculations multiply. Therefore, look no further than a power of compounding calculator.
Whatever financial product you may have in front of you, just enter the following details:
-The frequency of your investment-one time, monthly, quarterly, half-yearly, annually
-The duration of your investment
-The annual rate of return after taxes
And then the power of compounding calculator will tell you exactly what will be the future value of your investment, under the terms of the product that you’re checking.
Pension planning is mainly concerned with just three figures:
-The total sum you require on your retirement
-Your anticipated monthly expenses on retirement
-The monthly savings that you must start from today to reach the above figures
To get those figures, you need to enter the following details in a pension plan calculator:
-Your present age
-When you plan to retire
-For how long you would need a pension after retirement
-Your current monthly expenses
-The anticipated rate of inflation
Now, just compare pension plans to find out which of them closely delivers as per your requirements. Initially, a pension plan invests with a bias towards high-return, high-risk investment avenues. But over time, your investment corpus gets shifted to fixed interest options.
Cut down on your spending
You worked so hard for many years to enjoy the fruits of your labor, travel perhaps or simply do the thing you are most passionate about without worrying if there would be food on the table or bills piling up simply because you left the corporate world. Are you willing to change your lifestyle or cut back on spending once you’re jobless? If the answers is a resounding no! Then shop for the best pension now.
Start saving up
If you are good enough that you allot money in the bank, in savings or time deposits do not rejoice just yet because more or less your money depleted thru time because of the inflation rate and instead of being able to save, you love the value of your money.Times are hard nowadays but you can alleviate its effect on your retirement if you start early building your nest egg, monthly religiously.
It doesn’t matter if you start small what’s more important is you are making it a habit and overtime you will reap its reward. There are also companies that offer the benefit of funding portion of your pension fund, take advantage of such an opportunity.
Continue saving up on your CPF Special Account
In recent discussion with President Halimah in regards to address inadequate retirement saving among Singaporeans, economist Walter Theseira proposed disallowing the use of CPF savings for housing purchase. However, it created an outcry from the People as most of them need CPF in order to buy house.
CPF is special kind of fund that is managed by the Singaporean government which provides retirement housing and income options for its citizens. The amount to be contributed varies with the age and income of an individual. It is a given fact that there may be other priorities when you are young like paying debts, supporting up to a family or getting a house and paying its amortization but whatever the obstacles may be making sure that you are setting up even a small amount in your pension fund.You can now start investing for the later days to come.