Mr Garry Chua, UOB’s group head of bancassurance, stresses the importance of balance when it comes to retirement planning and caring for your parents.
“The key is not to sacrifice one for the other,” he says, “but to prioritise ensuring appropriate financial planning (so we can) help our ageing parents on their financial and healthcare needs.
“With careful planning, budgeting as well as tapping on government resources, you would be in a better position to care for your elderly parents’ needs without compromising on your retirement goals,” he adds.
How to start planning for your retirement?
The first step is to decide when you plan to retire. This will determine how many years you have left to save and how long your savings need to last, says Mr Chua.
The official retirement age in Singapore is 63, while the re-employment age is 68. These will be raised to 64 and 69 respectively in 2026.
He adds: “People are living longer, so it is crucial to plan for potentially 20 to 30 years of retirement.”
The average life expectancy for Singapore residents at birth in 2023 was 83 years, according to the Singapore Department of Statistics.
As a rough guide, MoneySense, the national financial education programme, suggests using two-thirds to three-quarters of your current income to determine how much you’ll need for retirement.
For example, if you currently earn $50,000 a year, and your desired retirement age is 62, the annual retirement income you need would be about $37,500.
Inflation is another key factor. Prices rise over time, which means your spending power will decrease. Historically, inflation in Singapore averages at about 2 to 3 per cent annually, says Mr Chua.
You can set and track your retirement goals or plan your finances for the months ahead with the help of