Smart Millennials #2: Should you be Concern about your retirement now?
How to count amount required to retire?
Consider your costs of living
Planning for the income standard you want, rather than the minimum
Calculate how much you spend on accommodation, food, groceries, clothes, healthcare, transport, communication, utilities, and even additional costs like taking care of a loved one that is dependable on you. Majority of these expenses will still need to be afforded in your retirement.
Your current standard of living is a good gauge to what you aspire in your retirement. It’s easy to say you will lower your lifestyle once you retire, in practice, but it may not be possible after being accustomed to such a lifestyle. It may be even harder if you aspire to enjoy some luxuries in your retirement.
3. Take into consideration inflation and greater medical needs in your old-age
Costs of the things we buy today will likely increase next year, and the year after, and the year after that. That’s how inflation works. While this year’s inflation rate is close to 1.7%, Singapore’s long-term inflation rate is closer to the 3.5% mark.
4. Start Building your retirement nest egg today
When building your retirement nest egg, you should look at it as adding layers of safety nets for your retirement.
The first safety net, and also the one every Singaporean and PR has, is your CPF. You contribute close to 37% of your wages to it through your working years, in a bid to afford the basic retirement level.