10 Myths About Retirement, Debunked!5 min read
Knowing what is true about retirement can help you plan better.
Eh, you see me work so hard, still driving Grab, still cannot retire leh. I want to go coffeeshop like those old uncles. Talk cock sing song every day. But ah, I also don’t know much about retirement. Luckily, my army buddy, who is now an insurance agent, gave me a few tips. Told me I should have planned for it in my 30’s. But anyway, I now share with you, so you don’t make the same mistakes.
1. Use your CPF lah!
You may think you have enough money in your CPF account for your retirement. But you may not retire as well as you might have wished for if you do not make certain changes to your CPF. Let me explain. When you are working, top up your CPF! Don’t anyhow spend. Do you know that the money in your CPF account earns more than any bank’s savings account? You can also take part in the Supplementary Retirement Scheme, where you can save for your retirement and on taxes. Then there’s CPF Life, a retirement scheme which gives you payouts each month till you are no longer living. All these useful info can be found at the CPF website one. Go!
2. My children will take care of me
If you believe in this, you are in for a rude awakening. Yes, your children will take care of you, but not financially because it could be a burden to them. It’s also not fair. They will have their own family expenses, and the need to build up their own income. So don’t depend on them. Build your own income and save, save, save!
3. Sell my house can already!
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You sell lor. Then sleep where? Ok, you may have other houses to stay in. But you know, it is always harder to sell a house than to buy one. Plus, selling your house doesn’t mean you will get the price you want. And if you urgently need to sell, your price will not be ideal. You may even lose money if the time and situation is not right.
4. Aiyah, no need to plan so early
The earlier you plan, the less taxing it will be on your future self. To plan in your 40’s or 50’s is a bit late already. Don’t forget, for most of us, our income drops as we age. So it is better to start early. It may be tempting to get the best house, the best car, the best home entertainment system when you are earning a lot. But, the sacrifices you make earlier will pay off when you can retire comfortably when the time comes.
5. I can use my savings mah
Unless you have millions of dollars without any financial commitment, then can lah. But for the average person, you cannot just rely on savings. If you have savings without insurance plans to protect your money, then your savings may be wiped out if something unfortunate happens to you. Retirement requires big sums of money. Savings may not be enough to meet your golden years expenditure.
6. I should invest safely for retirement
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A lot of people think that when they start to plan for retirement, they should invest safely in low-yield investments. That may not be true. Low capital means low returns. So these “safe” investments may not be enough for you to build up your retirement fund. Plan with your financial adviser to find more attractive returns for your money.
7. I retire, I don’t need to spend so much
Again wrong hor. One word may scare you: inflation. A plate of char kway teow may cost 1.5 to 2 times more when you retire. And char kway teow is not the only thing that will cost more. You will need to spend more! Plus, as we age, we need money for medication, medical aids, and maybe a helper or two. Who are you going to ask? Your son? Go and see point number 2.
8. My money will outlast me
But why would you take that chance? According to statistics, women can live up to 82 years and men, 81. Do you have enough money to last your lifetime? Along the way, you may use it up for some unexpected emergencies. Bear in mind that you may not have active income after you retire as well.
9. I can still work in my old age mah
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Yes, it is true. But, old bones and joints start to weaken already, how to work? It is true that you should work while you are still active and able. But, don’t you want to relax and retire as you have planned?
10. Buying insurance plans have nothing to do with my retirement lah
Wrong thinking, my friend. The insurance plans that you bought when you were working help you in many ways – some to build income and help towards your retirement, some to offset against unexpected emergencies, so you don’t have to use your savings.
Quick, go and speak to a financial adviser. Or check out CPF's website, where you have tips on how to calculate for your retirement and all the helpful schemes that will help you towards your retirement.
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The Patriach of the Tng family, Uncle Tng is a Grab driver with the gift of the gab. He’s loud, always trying to help and still uses the terms “Internet” and “Chat room”. As he sees himself as an experienced man of the world, he’s often sharing his worldly views, whether you are interested or not.