We spend close to a quarter of our lives in retirement. The average new-born female could expect to live longer than the average new-born male. A girl born in 2013 would expect to live an average of 84.6 years, longer than the average of 80.2 years for a boy. This sounds like a wonderful prospect, but accumulating enough money to live comfortably for that many years is a daunting task. One of the common mistakes people make is not planning early for their retirement.

Despite its importance, retirement planning is often neglected by most individuals. For some, retirement is too distant and for others, they may feel that their CPF saving will provide enough of a nest egg for their old age.

To achieve our goal, we must start planning as early as possible. We may not be able to depend on our family to support us during old age. With our high standard of living, higher medical cost and increase in life expectancy, we need more money to meet our living expenses during retirement. Many people will not have enough CPF savings for their old age.

So how would you go about planning for retirement? It involves four simple steps of setting your retirement goals, estimating your financial resources, determining the shortfall in funds and formulating an investment or saving plan.

Common questions about retirement

1) What should be my priority: saving for my retirement or investing for my child’s education funding?

Ideally you should plan for both but if you are tight on fund, than planning for retirement funding is more important. Please understand that I am answering purely from the financial point of view. I know you love your children and want to help them fulfill their dreams and achieve their success but on the other hand you are also concerned whether or not you can retire comfortably.

Your children do have many options they can explore but you don’t.  They can work in order to pay their way through college. They can also take study loans or apply scholarship but unfortunately there are no scholarships for retired people or senior citizens loans to help you to get by.

2) When should I begin investing for my retirement?

As soon as you can. Don’t wait because time magnifies compound interest. The earlier you start the better. Even $1000 left alone to earn 6 percent a year will multiple to $39,000 in twenty years! That is the power of compounding interest.

3) I’m over fifty years old, it is possible for someone like me to catch up with my investment?

You need to ask yourself, why haven’t you been able to invest it save? Whatever the reason, you need to correct the behaviour and start saving or investing.

Then you have to make some tough decisions like downsizing your house, driving a cheaper car, traveling by public transport or continuing to work as long as your situation allows. Whatever it takes, you must free up some money and starting building your nest egg.

 The Common Pitfalls in Retirement Planning

People tend to start too late, save too little and earn too little with their saving and investment. Our Singapore government recognises the fact that Singaporeans are living longer, and hence will need more money to see them through old age. In light of this, the government proposed all CPF members to set aside savings in their retirement accounts, to allow them to use their savings to buy an annuity from an approved life insurance company. Instead of purchasing an approved annuity, you can also deposit the minimum sum in a CPF approved bank or you can choose to leave your money with the CPF board.

In conclusion, my advice to you is to start planning. How you want to live your retirement depends on how you save and invest while you are working. Start planning early, save sufficiently and invest wisely so as to ensure a pleasant and comfortable retirement.


  1. What is the average life expectancy for man and woman?
  2. Have you started too late, saved too little or earned too little in your retirement plan?
  3. How do you see yourself spending your time as a retired person? How much will it cost?

Week 45 – Retirement Planning (Part 1)