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Retirement in Singapore: Is it just another pipe dream?

profileKenneth Lou

Ah, a common controversial topic discussed over coffee with some slamming of tables about the government and whether the CPF (Central Provident Fund) sufficiently covers for our retirement life.

How much do you need to retire?

We decided to investigate a little deeper and perhaps it is at this juncture we would like to share with you some pretty alarming stats. Did you know that you would need a total of $400,000 to retire at age 55 in Singapore?

However, this article won’t be about the hard numbers. Instead, I will focus more on the less discussed side of retirement – what it means to most people in Singapore today. And for that, we enlisted the help of our Seedly personal finance community!

(Editor’s note: Two members won the ‘Retire Smart’ books by Lorna Tan, the Sunday Times Invest editor for the past 20 years, she’ll definitely know a thing or two about retirement! Bonus: She autographed it for our community)

What does “Retiring Smart” mean to our community?

By and large, people get it. There’s some form of money component to it, but beyond that, it’s the peace of mind. Here are the TOP 5 Definitions most Singaporeans adopt today.

Above chart from Ivan at SGMoneyMatters

1) Inflow more than outflow

This is the most basic definition of retirement. A very ‘practical’ way to describe it, summed up in this equation below:

Passive Income > (Daily expenses + Occasional Splurge)

You simply customise the left side: A savings or investment strategy that will lead to a retirement portfolio that is sufficient to support the lifestyle when one decides to stop working.

Thanks to input from: Lilian Loke, Jeff Yeo and Izah Alep.

2) Working when you want to, not because you have to

Pretty self-explanatory and also very relevant. Because most people define work as the main source of income, hence the importance of building up some form of passive income stream as a crucial way to survive. Creating your own life KPIs instead of following some routine KPI in your work day.

Being able to do what you love

This can actually be summed up by a very beautiful personal story by Pascal Samsoon who shared about his grandfather who built go-karts for a living. “He was a happy man, able to build things that made him happy. For him, it was motorised vehicles: repairing tractors, building go-karts, solving car problems… for others, it could be writing books, blogs, tech companies or a bakery if that matters. He worked with people from all walks of life…he would always look at the world with positive thoughts and understand the people he worked with, no matter where they would be from.” He added: “He never retired per say, and lived happy till his last day. Through his work, he helped people enchant others through magic (one of his clients was a magician!) and help countless more to travel around the country and perform their daily work that required transportation.”

Thanks to input from: Darren Chee, Jerry Tong and Pascal

3) A mental state of doing any $#@! you want

Time waits for no one. Indeed very true. Finding ways to start doing what you already want to do in your ‘ideal retirement life’.

A story shared by Zetong clearly paints this picture. “I’d imagine a year of sabbatical mid-career to travel the world, meeting new people, and helping the less developed countries. I’d also imagine taking weekends to spend on hobbies which people only do after retirement. I have a friend in Singapore who likes carpentry, he said he would be a carpenter when he retires. But, what’s stopping him from doing that now?”

Another shared by Dolce was about helping the less privileged. “I would like to build a school in one of the 3rd World Countries & make a difference to the underprivileged children’s lives.”

It is at the end of the day, retirement can be seen to be a ‘glorified term’ of doing whatever you want to do, but finding ways to get it done, like a bucket list!

Thanks to input from: Zetong, Dolce and Valery Lee

4) Building good relations and being ready for the worst case scenarios

We can be forced to retire anytime. As Chin Mei shared: “We must be emotionally, socially, mentally, & financially ready at any time. Money will never be enough. We can plan for many things, we can also use insurance to buy life risks. Financial & investment planning is just to give ownself piece of mind to continue our life as per habitual. No amount of planning can prepare when disruption happens in life. We can only plan & execute according to plan only as much as what we can foresee.”

“If you manage to be healthy fit and are able to work, with a empathetic family and good children, that’s a very fulfilled life. Some people may think they have plan for themselves & family. But suddenly one day they may become a dependent unexpectedly in the early stage of wealth accumulation or they may left behind as a dependent.”

Money doesn’t solve all the problems even though it can definitely be enabling of options.

No matter how wealthy one is, for example with severe dementia in old age. Money cannot buy compassion, empathy & kindness in the community one is aging in. So retiring smart doesn’t mean just financial planning, it also means one should invest in intangibles such as building good relations. Think you have good relations even with relatives? Would they help you in times of need when meaningful reasoning in the head is lost ?

Thanks to input from: Chin Mei and Harris Tan

5) Depends on how you want to live your life

At the end of the day, retirement is a very personal decision. Never go out and subscribe to any popular belief that is sold out there. Seriously question why some people are doing certain actions and how you can lead a fulfilled life. The best example of this is by Leianne Tan who gave a huge insight into the way she wants to work towards retirement.

How else but via an acronym – RETIRING SMART:

  • R: Reach savings target
  • E: Expenses controlled
  • T: Teach and help people
  • I: Interesting life
  • R: Raise grandkids
  • I: Ignore my kids (LOL)
  • N: No worries
  • G: Good health
  • S: Sex life awesome
  • M: Marriage intact
  • A: Awesome friends
  • R: Rosy cheek ≠ 黄脸婆
  • T: To die peacefully

Yes, no doubt Singapore is pretty expensive, complicated and competitive. However, at the end of the day, only you can really decide how you want to live your life and we all can plan towards retirement. Why not start today?

About Kenneth Lou
Co-founder of Seedly. Passionate about helping people make smarter financial decisions.
You can contribute your thoughts like Kenneth Lou here.

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