In contrast to that of Japan, SG’s retirement and pension plan are one of the best in Asia; and, this was not the case about 70 years ago. But, with this in mind, if you live and work in SG, do you have what you need to retire? Are you setting aside enough for you to live comfortably when you are no longer working? Yes, the SG retirement system is great; but, with this in mind, it is still lagging behind globally, as there are a number of nations that outrank SG.
SG is not one of the top-1o when it comes to global pension schemes. So, unlike other countries, there are people who are working more now but are also going to have far more set aside when the time does come for them to retire. With one of the highest salaries in the world, it is quite surprising that SG’s retirement and pension schemes are not as highly ranked. So, there is some disconnect here. What does this mean for you as you are planning for your retirement, and how much you are going to need when the time comes for you to stop working?
Your pension state – It is specific to you
What does this mean? Basically that no two pension schemes are alike; even if you work the same amount of hours as a co-worker, and have the same salary, the amount that is going to be set aside in CPF, and other optional vehicles for retirement saving, is individual to your specific desires as an SG worker. Your family, background, culture, and lifestyle, are also going to play a major contributing factor to your saving when you are planning for retirement. So, this does have to be accounted for when you are thinking how much should be set aside for your retirement.
The Central Provident Fund, or CPF, is the main retirement saving vehicle for those who work in SG. It does encompass your house, medical, as well as general expenses; but, you will have to consider luxuries, and other lifestyle choices, as you are deciding how much you should be setting aside for the time your retirement approaches. CPF is mandatory, but there are 3-tier options you can choose from when deciding how much you are going to set aside.
In addition to the CPF, there are other vehicles, which are optional, that you can add to when you are planning your retirement. Civil servants, armed force personnel, and other groups of employees/workers will have different options offered to them, based on salary and type of work they do. If you choose to add to these accounts, you can spread your retirement funds, and you can appreciate the tax-free amounts you set aside, as long as you are working. So, you can put more away while you are working, and you are not going to have to worry about a huge tax implication or burden when the time comes to file your taxes with the government each year.
A 1/3 of SG’s residents are expats, so they are not able to contribute to these accounts. This is also a major reason as to why SG’s retirement and pension plan are so far behind that of other countries. If only a few residents are capable of setting aside money for when the time comes for them to retire, how are the rest of the residents, who were not born in the country, able to save and thrive when they are ready to retire in SG? It is quite difficult to rank highly, when nearly 1/3 of the people who are living, working in, and contributing greatly to the economy of SG, are not capable to survive when the time comes for them to retire. So, this is one area in which SG can truly make a change, and allow for retirement planning and saving for expats, to ensure they will have what they need when they do retire, and need to take care of their families while living in the country.
There are guarantees
The CBF is guaranteed; but, depending on your lifestyle, family, and personal needs, this might not be enough for you when the time comes for you to retire. This means you are going to have to find other ways in which you can save, and have the money that you are going to need in order to survive, when you are no longer working. The optional retirement saving vehicles, such as the RSS, stocks, and other accounts, are all ways in which SG residents can save more, put more money away, and can have the money they need, when they are ready to retire.
In taking aside different accounts, and planning to save through various vehicles, you are not only going to spread the wealth evenly, but you can also avoid risk, and avoid minimizing on your returns, when you are planning for your retirement. It is important to compare a few of the optional or voluntary vehicles you can rely on, when planning and saving for your retirement. Even moneylenders can provide funds for you to place into accounts, save, and repay; this might allow you to open an additional account, or allocate resources to place into a stock account, which can grow, and can earn a great deal of interest, if you are willing to let it sit in that account for many years.
You have many options when it comes to planning for retirement; and, even though SG is not ranked among the leaders in pension and retirement savings, there are ways in which residents can save more and set more aside, while htey are working. These are a few of the many ways in which you can do so. Not only to ensure you will have what you and your family needs when you retire, but also to ensure you spread and allocate funds to many accounts, in order for them to grow more as you are working, and planning for retirement.
