Three women share how you can retire earlier in Singapore

AH: The current economic climate can be terrifying as it brings about feelings of uncertainty. Women who are employed fear losing their job and income, so they become more cautious about spending. So, there’s a desire for more knowledge to manage money. This, along with the rise of digital financial influencers and viral content, indicates that women are becoming more proactive with their finances.

TT: I wasn’t surprised that personal financial stability came in tops – numerous businesses in sectors such as tourism and hospitality sectors shuttered or were severely affected due to Covid measures, which inevitably led to job losses and/or pay cuts. I also observed more women clients taking a more active interest in securing their own financial future, especially since their husband’s jobs were at risk.

CW: Women adapted very quickly during Covid-19, but they ironically became more fearful about money. The volatility made those who feared managing and investing money even more hesitant. I’d ask some of my clients, “Why aren’t you afraid of inflation? It’s happening every year!” I feel it goes back to financial awareness – once you understand how investment works, you will be able to strike a balance between long-term gains and short-term volatility. Knowledge allows you to plan better, so you no longer worry (about losing money due to market forces).

AH: Much as it’s boring and painful, it’s also important to be honest about your financial situation. Start by evaluating your financial needs, and consider the following: Are you spending more than you should? What is your current income and how much do you need? If you lose your job, how many months can you live without an income?

Then, focus on building an emergency fund for unforeseen circumstances – ensure you have at least six months of savings. Make a list of its intended use, and stick to it. Otherwise, if you’ve been dipping into this emergency fund too often, set up a mishaps fund to cater to unplanned expenses. For example, you went on a vacay and missed a connecting flight home, so you had to pay for an extra ticket.

TT: Statistics have shown that women live longer than men! In Singapore, where life expectancy is among the world’s highest, women can live up to over 85 years, and men, around 81, according to last year’s Singapore Public Sector Outcomes Review. And with advanced medical and healthcare technology, the numbers are likely to go up. So taking 65 as the general retirement age, it’s crucial that our financial base lasts us for at least 20 to 30 years further.

CW: More women aren’t getting married or having children, so there’s one less source of support to rely on during your old age. And it will be too late to start working for your nest egg at 70! If you are 20 years old but want to retire at 40, you have only another 20 years to grow your wealth. You reckon that’s enough time to grow funds that will last you for another 45 years, supposing you live till 85?

AH: Women are earning more money; we are saving more, but tend to leave it to our spouses to manage the money. But we must learn to protect ourselves and our loved ones against unfortunate circumstances, such as death of a partner, divorce, and disability. While we aren’t competitive about returns, we must be equipped to make informed decisions. Staying on top of our finances also helps us enjoy greater self-confidence.

TT: If we define retirement as ceasing all employment and having zero income, I am thankful that I am in a business where I do not have to cease all employment, and my income doesn’t cease just because I stop working. So in a sense, there is no fixed retirement age for me. But I would like to slow down by the time I’m 60 and explore other interests. As the saying goes, “When is the best time to plant a tree? The answer is 10 years ago. When is the next best time? The answer is now!” The same applies to building wealth and planning for retirement. Everyone should start as soon as we enter the workforce.

AH: As a child, I knew it was important to take care of myself and my family. Learning how to make my money work harder fascinated me – I felt it would liberate me from the stresses of living from pay cheque to pay cheque every month. When I was a student at Hwa Chong Junior College, I met– during my volunteer work – many women stuck in unhappy situations or marriages as they had no income. I started reading books such as Security Analysis by Benjamin Graham and David Dodd, and picked up useful knowledge on economics and finance. I’ve been investing since I was 21, and have built a comfortable portfolio for myself!

AH: I am very careful with how I spend my money these days. As an entrepreneur, I have less disposable income, so I plan my budget carefully and use my passive income to supplement my retirement nest egg. I also allocate a bigger proportion of my savings to long-term investments, and conscientiously assess the risk and suitability of my holdings for the next three to five years. One investment strategy I often use is dollar-cost averaging (where the same amount of money goes to the same asset at regular intervals), which helps me to avoid timing the market and feeling any panic that comes with the volatility. Invest for the long- term, and don’t be tempted by a quick buck.

TT: I’ve become more aggressive about investing; I allocate more resources to equities and REITs, and even alternative investment classes

CW: I don’t think my strategies have changed as a result of Covid, but I did spend less as I couldn’t go on my overseas holidays. So whatever I saved and didn’t use for these luxuries was channelled into investments. I don’t usually put in a large amount although I did put more into exchange-traded funds and mutual funds that were cheaper by 50 per cent. I had to remind myself not to succumb to quick wins, especially since I am, like many Singapore women, risk-averse.

TT: A typical budget is to spend 50 per cent of your income, save 10 per cent, invest 10-20 per cent, channel 10 per cent to insurance, and give 10 per cent. If you can spend less than 50 per cent, there’s more to invest and save. I also intentionally set aside a budget for giving – we need to build the habit of giving back, whether to charity, to our community, or for religious purposes.

AH: There is no blanket amount – it depends on your income, responsibilities, liabilities, family needs and lifestyle. As a guide, however, 15-20 per cent of your income should be set aside for your intermediate and long-term goals without dipping into it.
Meanwhile, 30 per cent is for short-term goals and savings. It will be tough to fulfil these goals unless you budget properly. So, do up your budget, and itemise your income and expenses. If you want both new shoes and a new smartphone, be disciplined and hold off buying one until the following month.

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