A JOURNEY TO RETIREMENT

Life is a journey where we choose certain paths and make certain life choices. At various life stages, we make financial decisions that will impact our lifestyle and how much we will have during our retirement. 

CPF Board has made available an on-line tool called the Interactive Journey on its website under the CPF Retirement Planner which helps show you how your choices in life would affect your retirement planning.

Here's a taste of what you can expect:

Gomala, a young executive in her early twenties, has just started work. She earns a starting monthly income of about $1,500.

Gomala makes a conscious effort to save 15% of her take-home pay every month and invests her money as an investor with a moderate risk appetite. On the average, the return on her investment is around 5%.

Gomala hopes to be able to have a monthly retirement income of $2,500 (in today's dollars) during her retirement years. As she saves 15% of her take home pay each month and contributes to CPF, Gomala is happy to know that she will have more than $20,000 cash savings and more than $65,000 in her CPF accounts by her late 20s. 

Gomala plans to get married in the mid-20s, buy a property and have three children. However, she wasn't quite sure what kind of property she could afford. She tries out the Home Affordability Calculator found at the CPF website and realizes that she can actually afford a 4-room HDB flat. She also intends to buy a car.

Over time, with her chosen lifestyle, Gomala realizes that at age 62, she would have a retirement fund of about $580,000 which would give her a monthly income of about $1,355 per month. That's below her desired monthly retirement income of $2,500. Gomala then reviewed her life decisions and realized that if she decides to take public transport instead of buying a car, she would have a monthly retirement income of $2,374, which is closer to her desired retirement income.

We will all retire from work some day. It is never too early to start planning for our retirement. At every major event in our lives, we will need to do some planning and make some decisions. From starting work, getting married, buying a house, making an investment and even when we reach 55, the decisions we make will have an impact on our retirement savings. Hence, we need to consciously plan for it and work towards the goals. After all, people don't plan to fail but rather they fail to plan!

We need to constantly review our plans and make changes along the way so that our retirement goals can be achieved. Like Gomala, we may find that a simple choice of taking public transport instead of buying a car will enable us to meet our retirement goals.Gomala is now closer to her retirement goal by simply doing her retirement planning early and changing her lifestyle choices. 

Wouldn't you want to know if you will be able to meet your retirement goals in life as well? Well, what are you waiting for? CPF Board has made available the CPF Retirement Planner which allows you to try out the Interactive Journey like Gomala, or the Retirement Calculator which will give you customized information according to your financial input. 

 Log on to www.cpf.gov.sg today!