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Money

4 ways to better prepare for your retirement

M / Money

4 ways to better prepare for your retirement

by Adora Wong  /   November 25, 2021

Think you’ve still got a long way to go before retirement? Not if you manage to put together a nest egg by the time you’re, say, 50. But how should you go about pursuing financial freedom more aggressively? After all, the recent State of Retirement in Singapore survey by Great Eastern found that women typically face “unique” hurdles when it comes to financial planning.

“For one, women are more likely to take prolonged breaks in their careers, whether for maternity leave or to fulfil other domestic responsibilities. The time off can translate to a reduced capacity to fund a nest egg,” explains Teo Xue Ting, a representative from the insurer. She adds that they also tend to spend what they have on their family, especially their children, instead of saving for retirement.

And then there is the gender wage gap and the discrepancies in financial literacy.

“Women not only generally earn less than men, but are also less likely to invest their money. Women are generally more conservative investors and prioritise day-to-day solvency over long-term goals.”

It should also be noted that women tend to have increased life expectancy, which means they are left to grapple with rising healthcare costs and other issues associated with old age for a longer time. This is probably why the survey found that a higher number of women (45 per cent) here rely on family members for their retirement income than men (39 per cent).

Want to better prepare yourself for your retirement? Xue Ting shares four tips.

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https://www.herworld.com/gallery/women/money/prepare-retirement-women-tips/
4 ways to better prepare for your retirement
Start small and start early
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“Retirement planning is like any other long-term project–the earlier you start, the earlier you reap the rewards. Building an adequate and balanced retirement fund requires communication (i.e. not being afraid to ask), trust (i.e. following the advice from the right people) and discipline (i.e. sticking to the plan).”

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Grow your knowledge
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“It is pertinent that women educate themselves adequately and keep abreast of the times, be it the world economy, market movements, investment products or even cryptocurrency. Having knowledge builds confidence, which in turn gives us the freedom to take the necessary actions or seek the necessary advice required to secure their twilight years.”

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Diversify your retirement income sources
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“Relying on your job as the sole source of income may not be enough for retirement, not least because of the general lower earning capacity of women. To manage this risk, women should look into building multiple sustainable sources of income such as investing, purchasing annuity plans or even turning a passion or hobby into a profit-generating side hustle. With greater savings and knowledge, the focus then shifts to investing or setting aside retirement money early and doing it consistently.”

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Plan for the unplanned
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“This not only includes having sufficient income streams for the duration of their lives, but also having adequate provisions for emergencies and sufficient protection (e.g. long-term care plans and life insurances)  for which a financial adviser would be best placed to advise. I know of many older women who are constantly worried about future medical expenses and regret not setting aside more money for insurance coverage against illness when they were younger. Don’t be afraid to seek help from a professional financial advisor. A good one will be able to help you get over any inertia towards taking the first step in retirement planning.”

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10 easy ways to stop spending so much and save more money

3 hidden costs that will delay your retirement

5 tips to still save big for your retirement even if you started late

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  • retirement plan
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MCI (P) 049/10/2021. Published by SPH Media Limited, Co. Regn. No. 202120748H. Copyright © 2022 SPH Media Limited. All rights reserved.