It's Singapore's dirty little secret, but anyone who spends more than a few weeks here notices it: The number of old, wizened people who continue to toil away in menial jobs, doomed to continue working for the rest of their lives.
You would think that these daily reminders of not being retirement-ready in a country with no social safety net would scare people into preparing for retirement at an early age.
Yet a sobering 2014 news report revealed that Singaporeans are largely still woefully unprepared for retirement. Only a quarter of the people surveyed had any kind of retirement plan. Meanwhile, a different survey found that 75 per cent of the Singaporean mums surveyed had never even thought about retirement planning.
Why is this even happening? Here are some stupid excuses Singaporeans make for putting off retirement planning.
I have lots of time
When you're young and strong, retirement seems like a lifetime away. Why bother suffering now for a future you're not even sure will come to pass? Besides, you've still got a good 30-40 years of economically active years left, so why bother starting now?
Unfortunately, you might be shooting yourself in the foot by not starting early. Because the earlier you invest your retirement savings, the more time they'll have to grow. The later you start investing, the more you'll have to save.
Thanks to compounding interest, your money has more potential to grow than you think-investing your money just ten years earlier can lead to your having a much bigger sum when you reach retirement age. If you're planning to wait till you're older, you'd better pray you're able to save a ton of money as you'll need to make up for lost time.
I don't know how to invest
Anyone who's gone through the MOE school system knows that students are used to being spoonfed by teachers. Nobody wants to spend hours finding out how to do things themselves-just give us the practice questions and answer keys so we can score that A now, thanks.
When it comes to investing your own money, things are not as straightforward-and without anyone to spoonfeed them, many Singaporeans are refusing to take the first step to finding out how to invest.
If you haven't even started saving, let alone investing, it might be worthwhile drawing up a retirement savings plan with the help of a financial advisor (heed the warnings here, though). Just make sure you do your search before you put down money on any so-called retirement products.
Self-employed folks don't have the luxury of employer's CPF contributions and don't need to contribute their own money to CPF either, so this group can be particularly vulnerable if they fail to make plans for retirement.
Budgeting and setting aside money to invest is even more crucial when you're self-employed because you don't have CPF to fall back on, however inadequate it might be. If you're undisciplined about saving and investing, things will be even more disastrous for you then for your salaried friends.
While contributing to CPF is an option, and one that you should probably take if you're completely unable to save or unwilling to bother to find other ways to invest, you might be able to get higher returns by putting your money elsewhere-but you'll have to do the legwork and do your own research to find out how. Do bear in mind that once you put money into your CPF accounts, you can't change your mind and take it back.
I don't earn enough to invest
The people who complain every so often that they just don't have enough money to invest are unlikely to know anything about investing in Singapore. They're probably planning to wait till they can afford to buy property, and then treat that as their "investment".
Otherwise, they would know that you can buy as few as 100 shares per lot on SGX. This means even a relatively expensive $10 stock doesn't have to cost more than $1,000 per lot. Let's say you want to buy stocks in Suntec REIT-at a stock price of $1.69 you would only have to pay a measly $169 for the smallest lot.
I have other expenses to pay
So you're earning a decent enough salary, but you can't seem to set any money aside to invest. There is always something more urgent or more enticing to spend on-like LASIK surgery, overseas holidays, treats for your family and so on.
Even amongst those who do invest, 1 in 3 are in debt for things other than property. That means that even many of those who do have the money to invest are overspending or unable to cope with their daily living expenses. These aren't people who are wiping down hawker centre tables for a living!
No matter how juicy or how pathetic your salary is, you've got to try your best to live within your means. If you complain about all your money going to other expenses, take an honest look at whether you've inflated your lifestyle and are spending on luxuries you don't need.
Are you giving up retirement security for designer bags and expensive restaurant meals? Well, we hope those Pradas keep you safe and warm when you're struggling with work well into your golden years.
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