Have You Planned For Your Retirement Yet?
After you retire, you will probably live on for another 20 years on average. Have you thought about how much you will need when the day comes?
Depending on how much you are spending right now, you will probably be spending at least 60% to 70% of your expenses. Although the figure can vary much on how well you control your spending.
Some people advise that you should have a lump sum and use the interest generated to spend. Others say that you only need a big enough lump to whittle it down.
Also, there are advice out there that say that you should not invest in stocks after retirement, or if you do, it should be 10%-20%. But who’s to say what is the correct model for you?
Everyone’s different. Your situation is different. But you got to think about it while you are still working about the sum of money you want as your nest egg and actively do something about it.
With a plan, you can see if you are behind or ahead and adjust your spending and savings accordingly. If you can’t plan or don’t know what to do, it is advisable to get a trustworthy financial planner who is recommended by your relatives or friends and who will not fleece you nor try to sell you products which have high costs to you.
Else, self-educate with the huge amount of free information out there and from well regarded investment books.
At the moment, my wife and I are slightly ahead of our plan, and we intend to stick to it and try to keep saving and continue to invest.
Hope your own plan is running smoothly along.
December 4, 2009 at 5:17 PM
Very timely reminder.
No offence, but nowadays I think it's a challenge finding a trustworthy FP. Might be better off self-educating.
One idea not often discussed but worth considering is the surrendering of life policies (not hospitalisation) when major loans are cleared and dependents become independent. Mr Tan Kin Lian covered this is his blog.
W
December 7, 2009 at 10:22 AM
To W,
If you surrender your life policy, what happens if you 'kena' critical illness? Stroke, cancer, heart attacks?
I think you'll be an even worse position. Hospitalisation plans only cover you when you're in the hospital. But there are things you have to pay while you're out of the hospital, thus you might have need for the lump sum payment.
I don't think I'll surrender my life policies unless I'm really really in need of money.
December 7, 2009 at 8:56 PM
Hi W,
I rather agree with la papillion in that I wouldn't give up my life policy unless I am in urgent need of money.
But you are rather correct in that it is hard for a financial planner to be trustworthy unless they are paid not on commission but for a fixed fee.
Regards,
Lemizeraq
December 7, 2009 at 10:41 PM
Hi La Papillion and Lemizeraq,
Thanks for your comments and concern : )
Like LP, I view critical illness cover as quite important.
Maybe I didn't state clearly in my post. I do have some life policies that insure only Death and TPD but I didn't buy critical illness riders, so I may surrender these policies when the time is right.
Of course surrendering such policies is just an option. I know many parents would rather not, as they want to leave something behind for their next generation when they pass on.
Anyway, keep up the good posts, both of you!
W
December 7, 2009 at 11:47 PM
Hi W,
Thanks for your clarifications and encouraging words.
Please critic and comment on anything amiss that you spot or give your views here or any of the financial blogs you go to.
It is through this process that we all learn something valuable.
Goodnight!
Regards,
Lemizeraq
December 8, 2009 at 1:36 PM
Hi W,
Ohhhh, you should have mentioned that. So evil, thought you wanted both me and lemizeraq to die pain pain!! wahaha
December 8, 2009 at 3:59 PM
Hahaha, if I had wanted the both of you to die pain pain, then where am I going to get my daily fix on personal finance??
: )
W
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