How far I’m I from hitting 50? How much do I need to have saved?Every time the age number 50 is mentioned what comes to the minds of many is retirement. The issue of how much one needs to retire is quite challenging even to the wealth managers or financial advisers because it differs from person to person depending with the country they reside in and their individual daily needs. To some, three healthy meals a day and a descent roof over their head is just enough; to others, a helicopter and 15 bedroom houses in an island will be just fine. The fact that it’s hard to tell exactly how much a Singaporean will need by the time they reach 50, the tips below however will paint a clear picture for you.What to have As a Singaporean by the age of 50?
What to have As a Singaporean by the age of 50
1. A clear stated will
You must prepare your will (or a trust) at this time depending on your legacy. A trust works in cases when there are businesses, money or property you want to leave for your children as inheritance. A will saves your loved ones from unnecessary fights after you’re gone. Preparing a will is not expensive as it is the case with a trust.
This will involve professional help from a competent lawyer and a wealth manager who will assist you in distributing your estate as you so desire.
2. No debt, just your mortgage
The older you grow, the lower your earning capability continues to fall, especially if you have to physically work to earn a living e.g. construction/office manager. In such a scenario having extra debts other than your mortgage may make your retirement years quite unbearable. Loans such as car or business must have been cleared by the time you hit 50.
3. Savings to have been 5X your annual salary
Majority of wealth managers in Singapore recommend that for one to enjoy their retirement, their estimated savings should highly supersede what they earn per year. For instance;
-At age 35- Your savings should total up to the figure you earn annually; this includes CPF.
-At age 45- It should be 3 times your annual income.
-At age 55- It should be 5 times your annual income.
-By retirement- It should be between 8-11 times.
Statistics say that the average income in Singapore is approximately $3,700 per month. When you do the math, it means by the time a Singaporean is 50, he should have total savings of $177,600 (3,700 X 12 X 4).
4. A set plan on supporting children/grandchildren
Children can completely ruin a retirement plan if financial plans for them were never included. This could be in terms of making last minute decisions to pay their school/college fees or even building/purchasing houses for them because you can’t get along living in the same compound.
For effective planning, sit down with your financial advisor and make considerations on how best to set financial rules for your children and strictly adhere to them.
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