Ask Singaporeans what's the number one thing they need for retirement, and the obvious answer will be not a tropical beach resort where they can live out the rest of their days, but money.
And for good reason, given the fact that many Singaporeans are doubtful of their ability to amass a retirement fund big enough to let them kiss their working days goodbye.
This might sound counter-intuitive, but it's a mistake to get so fixated on amassing that golden sum you think you need for retirement that you forget about everything else.
Being able to retire with peace of mind is not just about saving up a certain amount of money - it's also about having a well-thought out financial plan and purchasing the right products that will keep you afloat come what may.
Here are some financial products you might need.
Health and life insurance coverage
Not being able to afford the cost of healthcare is one of Singaporeans' biggest fears, and it is one that only grows with age.
When you're no longer a spring chicken, you can expect your healthcare costs to rise significantly (Botox doesn't count), and if you're not careful a few trips to the hospital can wipe out your entire retirement fund.
There's why it's so important to obtain sufficient health coverage in the form of private health insurance.
MediShield Life, while certainly an upgrade from the previous MediShield system, still has its limitations.
Getting private health insurance can make all the difference between being forced to wait months for treatment at a public hospital, and being able to see a private doctor of your choice at any time.
It is also essential for Singaporeans with dependents such as children or aged parents, and even those without, to consider a life insurance plan.
In the event that they become critically ill or disabled, they and their families will be taken care of.
A term life insurance policy is a cost-effective way to receive coverage, while investment-linked life insurance policies can have the dual function of helping you set aside money for retirement.
It removes the need for you to rise from the dead to continue working should the worst happen.
(And yes, that feels even worse than dragging yourself to the office with a hangover.)
Sure, everybody would like to retire with a giant nest egg. But the thought of delaying gratification to enjoy something that will only come a couple of decades down the road is too much for many people.
That could be why so many young Singaporeans feel that their existing financial commitments will hinder them from retiring completely, and a growing number of people are getting into credit card debt to finance lavish holidays, meals at Instagrammable restaurants and those quilted Chanel bags you see floating around on everybody's arms.
If saving money sounds harder to you than saving a human being in a burning building, it's a good idea to consider a savings plan to help you build up an emergency fund.
Savings plans force you to put aside a certain amount of money every month, to be paid out together with returns at the end of a number of years.
You won't see that money for a while, but when you do it will come back to you in a lump sum that's more than what you put in.
Passive income stream
In this day and age, nobody plans for retirement by hiding cash under a mattress.
In fact, there's a good chance few of the retirees of tomorrow will be relying entirely on cash to finance their retirement.
Instead, passive income streams like rent and share dividends are going to play a big part in the retirement plans of those who actually manage to stop working in time to enjoy life.
Don't worry, you don't need to be a descendent of Warren Buffet to enjoy the benefits of passive income, nor do you have to have a spare million lying around at home.
There are some low-cost investment options that offer passive income.
For instance, you can buy into a Regular Savings Plan that invests your money in the STI Exchange Traded Fund.
Your money will be invested at regular intervals, and any dividends will be credited to your account.
Nowadays, you can participate in such plans for as little as $100 a month, so there's really no excuse.
This article was brought to you by NTUC Income as part of their Start Retiring? campaign.
The article first appeared on MoneySmart.
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