Ask the experts: When do I start planning for retirement?

Each week, our financial experts from Manulife will respond to readers' questions related to financial planning.

If you have any questions on financial planning - whether it's about educational planning, retirement, housing loans, CPF, Singapore Savings Bond, SRS, MediShield Life and more, ask our experts! Send your questions to contentstudio@sph.com.sg.

This week, Ms. Henrietta Ng (Associate Manager, Financial Services, Manulife) replies to our reader's question on when one should start planning for retirement.

When do I start planning for retirement and how much do I need?

There is never a good time to start planning for your retirement. But the earlier you start, the more you can accumulate with less effort with the effect of compounding.

As a rule of thumb, you will need a monthly allowance that is at least two-thirds of your last-drawn income to maintain your current lifestyle during retirement. Due to inflation and longer lifespans, you will actually need more. You can also check how much you will need for your retirement using Manulife's simple and interactive retirement .

In planning for your retirement, you should consider the following:

Define your retirement goals - when you would like to retire and your preferred lifestyle during retirement

Estimate your monthly or yearly living expenses when you retire as accurately as possible

Assess your current situation to see if you are on track to meet your retirement goals

Will you still have any dependants by the time you retired?

Your legacy needs.

Having done your research and calculated the numbers for your desired retirement, the next step is to build your wealth. Knowing how to make your money work harder and smarter for you early on in life will help you keep pace with inflation and build your retirement nest egg more quickly.

Putting aside a sum of money as savings is a good start to building your wealth. However, with the low interest earned on cash deposits, deploying some of that cash strategically for investments can help you increase your returns and better reap the benefits of compounding interest.

There are different ways to diversify your income sources in retirement. Some ways could be

Investing in a private retirement plan can be a good solution to help you enjoy a steady stream of income when you retire.

Contribute to the Supplementary Retirement Scheme (SRS) for drawdown upon 65

Invest regularly to build your nest

Purchase properties for rental income

Manulife also offers a suite of retirement plans under its which ranges from endowment plans that provide a lump sum payout at a certain age to investment-linked plans that not only provide a stream of yearly or monthly income but also offer insurance coverage.

It is never too early to start planning for retirement. The earlier one starts, the easier it is to achieve one's goal. Review your plans and achievement regularly and at different life stages. Start saving and keep invested and allow your money to grow for your retirement nest.

Work out what you need and work out a plan to achieve it. People don't plan to fail but they fail to plan.

This article was part of a sponsored series first published by SPH Content Studio.