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3 Jan 2023
SOURCE: CPF Board
What does your dream retirement look like? Be it spending more time with your loved ones, continuing to work or indulging in your hobbies (or both!), it’s important to know how you can achieve this desired lifestyle.
However, coming up with a roadmap towards your retirement isn’t easy. Life is a long journey, and sometimes obstacles may appear, forcing you to take a detour. When that happens, it helps to take small but steady steps towards your goals, such that you are always progressing in the right direction despite setbacks.
Here are three ways to help you mould your dream retirement in the present, so you are ready for the future:
Retirement planning is like running a marathon: if you know where your end goal is, you will be able to better pace yourself as you make your way towards the finish line. The key lies in finding your purpose and knowing what you find meaningful so that you know what to work towards.
But what can you do, concretely? The first thing is to set some goals for yourself that you can steadily work towards. These goals need not be big milestones like having a certain amount of savings in your CPF accounts, either. You can have smaller, short-term goals that are easier to attain as checkpoints along your journey to the next big milestone.
An example of a long-term goal would be retirement. To achieve this, some questions you need to consider are:
In order to mould your future, it is also important to accurately assess your present. Rather than a You Only Live Once (YOLO) approach or even a Financial Independence, Retire Early (FIRE) approach, balancing your current spending and saving for the future is the key. It may be difficult, but achieving your ideal retirement lifestyle is worth the effort!
While it may be good to set aside a certain amount of your salary to save each month, it is only advisable to do so if the balance of your salary can satisfy your current needs.
This can range from everyday necessities like food, utilities and clothes to things like transport and insurance premiums. In addition, it is advisable to save up for emergency forms of expenditure, such as hospitalisation. Other similar forms of expenditure can include your children’s education, which require long-term planning and saving. These forms of expenditure are more immediate and can cause huge problems should they not be addressed timely.
As such, before you think about how much you want to save, you should consider how much you can reasonably afford to save after your current needs are satisfied.
With a game plan set up and your immediate needs taken care of, it’s time to take some solid steps towards achieving your desired retirement lifestyle. CPF offers stable interest rates to help your salary grow towards your retirement funds, but you can always help your savings grow faster! By topping up frequently into your CPF accounts, you can help the savings grow at a much faster rate. In addition, you also have the added benefit of tax relief when you top up your CPF accounts or the accounts of your loved ones!
If you’re keen to find out more, here is a handy article to help you with building up your retirement nest egg.
A well-thought-out plan is only good if you start off on the right foot. Similarly, the best way to approach a new year is to start it right. And what better way to do so than to ensure you’re taking the right steps to achieving your desired retirement lifestyle? With proper goals and a clear direction, your first step into the new year can also become your first step to a wonderful retirement.
Information in this article is accurate as at the date of publication.