Prepare ahead for a fulfilling retirement

Sipping a cocktail by the beach. Attending a mid-day yoga class. Volunteering at our favourite charity. These are some idyllic scenarios which we dream of when nearing retirement age.

After decades of working, we all look forward to retirement. In our minds, retirement is a golden period where we can finally put our feet up and have the time and leisure to pursue our hobbies.

Retiring well today, however, is not easy due to the high cost of living in Singapore. Even if we have worked diligently at our jobs and enjoyed substantial pay increases over the years, the temptation to spend more or ‘lifestyle inflation’ eats into our savings pool. In Singapore, 63 is the minimum retirement age and this will be gradually raised to 65 by 2030. So, do keep in mind that there will come a time when we leave workplaces for the final time and step into the next phase of our lives – retirement.

Mr Teo K.S. and Madam J. Tan, a couple in their late ‘50s who are in the construction and legal industries respectively, are nearing their retirement phase. Unlike the typical sandwiched generation, they are relatively free from financial burdens as their adult daughter is working and they do not have elderly parents to take care of. Let’s hear from them what they have done to get ready for the golden period of their lives:

Save diligently while you are still working

According to the Household Expenditure Survey 2017/2018 which is carried out every five years, the average monthly expenditure of households comprising solely retired persons above 65 years old is $1,970. On a per household member basis, it is $1,150.

What this means is that a couple who are not working will spend at least $1,970 a month on housing, food and transport which typically make up the largest share of household spending. Other items include spending on recreation and culture, healthcare and communications, amongst others.

Mr Teo who plans to retire at 65 said: “I have started retirement planning, in the form of savings as well as in my  CPF. I also have life insurance. In addition, I am also aware that topping up my CPF will help to shave a little off my tax bill.”

His wife, Madam Tan, admits to being less savvy when it comes to retirement planning: “I was unsure about the technicalities of topping up CPF and did not know where to seek out this information. However, I do have life insurance with staggered maturity dates.

Grow alternative income streams

Know that when you retire, your monthly salary also stops abruptly. To prepare for a time when you no longer see your bank balance increase every month, learn to be financially savvy and grow alternative income streams.

Review the skills that you have and see if you can monetise them. Pivot towards part-time life-skills coaching with the people management and coaching skills you have as a Human Resource manager. If you enjoy baking, consider starting a side hustle during weekends selling your confectionery.

When asked about his philosophy towards money management, Mr Teo firmly believes in keeping it safe as throwing caution to the wind can take a hit on hard-earned savings. He said: “Cash is king. Investing in high-risk, would mean high-rewards, but low-risk investments also mean lower rewards.”

For those such as Mr Teo and his wife who also do not believe in taking too much risks, they can consider topping up their Supplementary Retirement Scheme for its two-fold benefit: tax savings and safe investment opportunities.

Maintain a healthy lifestyle

Without the constraints of a full-time job, retirees can enjoy a more active lifestyle than before. Exercising regularly can prevent or delay health problems that seem to come with age. According to researchers, half an hour of light exercise, six days a week is all that is needed for an older person increase their life expectancy by 40 per cent.

The Teo couple already lead a healthy lifestyle which places them in good stead for an active retirement. Mr Teo is a firm advocate of a clean diet and avoids oily and unhealthy food such as commercially prepared snacks. As for Madam Tan, she does brisk walking few times a week by walking to the supermarket to do her grocery shopping. 

Give back to society

Retirees often find themselves without a purpose after they stop work. To prepare for the ample time on your hands post-retirement, start by volunteering at a charity which you identify with even before you stop work. The skills and experience which you honed at the workplace can be put to good use when you volunteer. Volunteering also lets you meet like-minded friends who are working towards a common good.

If you do not have time to volunteer regularly, consider donating instead. The donations need not be big as every bit counts towards the charity which you give to. Donating regularly also helps to shave away your tax bill. After all, every dollar saved is another dollar which can go towards the retirement kitty.

Pursue new hobbies

Retirement opens up opportunities to discover new hobbies to enrich our lives. While the couple is mostly aligned when it comes to their retirement plans, on the topic of hobbies, they have differing views.

Mr Teo does not feel that hobbies are necessary for an enjoyable life post-retirement. However, Madam Tan said: “Hobbies can enrich your life and give you fulfillment, something to look forward to and work towards every day, something to enjoy in life.

Having said that, the couple already enjoy a rhythm in their daily lives which see them catching up on drama series after work. Madam Tan also reads regularly and does sudoku puzzles which keep her happily occupied. Their disciplined way of life is a routine which should see them transit to a happy retirement effortlessly. After all, as Mr Teo puts it: “I am just enjoying my life now.” And it should be no different when the couple retire as they have already planned well for the golden period of their lives.