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Are you prepared for retirement?


Read an article on Yahoo Singapore this evening about the people needing to prepare more for retirement as the retirees are living longer with better healthcare and lifestyles.

According to the article reposted from Bloomberg,  “Longest retirements fuel pressure for remodel”, Singaporean retirees are living longer like in most places in the world and this causes stress for the retirees as they probably had not saved enough for this.

In the same article, there is a quoted survey by Friends Provident International of 556 people who had at least $80,000 to invest found that only about 57% felt that they are saving enough for their retirement. I went to look at the survey that they provided and there were some interesting things there too like some felt that they need at least $800,000 for retirement while others have figures of $2.5 million. 

Being a bit of a busybody, i went to Google Friends Provident International, read a bit of their website and went to one of their funds that they advertise and suffice to say that i baulked at the fees that they are charging for their investment advice. This high fees charged besides other things is also mentioned at this website by Andrew Hallam that was part of the first page of the Google search results that I found.

The one thing you can control in investment is fees.

High fees are not indicative of expert knowledge. Nor do they indicate that there is a modicum of safety or stability in the high fees charged.

Back to the topic of being prepared for retirement, I will say that quite a lot of people think that investment is hard. It isn’t, but it is not that easy either. In fact, I’d say that it takes more willpower than IQ.

In my second job working for a bank’s call centre, I remembered the trainer who showed us a newspaper clipping about a clerk who invested a fixed monthly sum to her Singapore unit trust fund. She retired as a millionaire.

All you need to do is to spend less than you earn each month (some months may be a bit of a challenge, what with insurance dues, credit card payments etc, but the key is that you have to spend less than you earn).

So no car, no LV bags, no Tag Heur watches, no frivolous expenses.

The author of the book, “The millionaire Next Door”, found firemen, teachers as people who managed to find themselves with a million. So there isn’t an excuse for not being prepared for retirement.

It’d be helpful if you can actually save a million, but that is doubtful unless you are earning millions each year. So for us mere mortals, we have to invest.

My abiding faith in the power of investment is because i was a beneficiary in that too as my father’s investment in stocks and shares all through his life was key to his being able to send me overseas for my university studies.

So I bought stocks and IPOs in my very first job right from the first year.

I’ve stopped making stock purchases in the past two years as my baby boy came along with my busy job and a master’s course (funded this time by the stock purchases I’ve made). But i have two monthly dollar cost averaging plans that are moving along without any input from me. And I plan to start again pretty soon, China looks inviting as it has fallen to below 10x in its PE ratio from sky high levels just about a year ago or so.

Meanwhile, time to relook at my estimates for how much we need for retirement based on the Bloomberg news article  and Singapore’s new high levels of inflation.

1. Bloomberg article: http://www.bloomberg.com/news/2013-04-18/world-s-longest-retirements-fuel-pressure-for-singapore-remodel.html
2. Friends Provident International survey: http://www.fpinternational.com/common/layouts/subSectionLayout.jhtml?pageId=fpint/SitePageSimple%3Ainvestor_attitudes#
3. http://andrewhallam.com/2011/04/weve-just-been-scammed-by-friends-provident-so-what-now/

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The information contained in this blog is prepared from data believed to be correct and reliable at the time of publication of this report. The authors do not make any guarantee or representation as to the adequacy, accuracy, completeness, reliability of the information contained herein. Neither the authors or any affiliates or related persons shall be liable for any consequences (direct or indirect losses, loss of profits and damages) of any
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