After retirement, how are you going to pay for your hospitalization premiums?
Most of us in Singapore have a comprehensive hospital coverage to protect ourselves against the rising medical costs so that should anything happens, we have a peace of mind as the insurance company is there to take care of our hospital bills.
However, have you thought of what happen after your retirement? Without an income coming in or lesser income coming in, how are you going to pay for your hospital premiums when it will increase as you aged older? Do you have an additional of $89,000 coming in after retirement?
If no, what are you going to do? How are you going to pay for it? Not forgetting that this is the time you need hospital coverage the most?
Do contact me if you want to know what are the various options that are available to you so that you have this sum of money coming in after your retirement.
In the recent report “The Future of Retirement 2015” by HSBC, it was found that many people in Singapore did not plan for their retirement. 61% of the retirees are concerned about running out of money in retirement. About 41% regretted not savings more, 35% wished they had started earlier to improve their standard of living and 19% said that their living standards are worse than before they retired.
The facts and figures speak for themselves. Do you want to be like them ended up regretting not planning for retirement earlier? Do it now and don’t delay anymore. Let the old aged you thank you for the decision you make today.
It is Your Life, If You Don’t Plan for Yourself, Who Will Do the Planning for You?
National Trades Union Congress (NTUC) said an advisory panel’s proposal to revaluate the CPF Minimum Sum to the Basic Retirement Sum is good as it is a more achievable amount for most employees to achieve retirement adequacy. NTUC supports the use of long-term inflation to accustom the Basic Retirement Sum, which could provide more predictability. NTUC also urged the Government to make sure that the public is well informed beforehand on any adjustments to the Basic Retirement Sum to ensure transparency on the calculated adjustments. NTUC also suggested that the government introduce incentives to encourage members to retain their retirement savings so that their monthly pay outs will not reduce.
Do you agree with the new proposal of having the basic retirement sum is a good idea? Will you be able to hit the basic retirement sum when you retire? However, is the basic retirement sum sufficient to sustain your ideal retirement lifestyle?
The top concerns of Singaporeans are retirement adequacy, healthcare and cost of living. Singaporeans fear having inadequate funds after they retire to cover their daily expenses and higher living cost, especially for those who are still paying their housing loans. Some Singaporeans foresee gaining help from the Silver Support scheme, while some believe that depending on oneself is crucial to pay off home loans and to prepare for their retirement. There is also a greater pool of people requesting for more withdrawal flexibility from their CPF accounts upon retirement.
Many are concerned that healthcare and hospitalisation costs may be very expensive especially for critically ill patients. Such problems will still persist despite of MediShield Life scheme that will be administered in end-2015.
Many Singaporeans also request for more financial assistance to subsidies “everyday goods and services”. Some felt that the government should relief financial burden on food such as distributing grocery vouchers.
Do you share the same concerns as what is stated above? Or do you have other concerns? Are you adequately prepared for your future in terms of medical costs, increasing cost of living and your retirement? If you don’t prepare and delay it longer, the shorter time you have left. Financial planning starts now and you re-adjust your financial plans as you pass through different phases of your life. Do you want to be in control of your finances without any uncertainty or do you want to delay your planning and live life full of uncertainties?
The Minimum Sum is the amount that must be retained in Central Provident Fund (CPF) for retirement when a member turns 55. 50% of the sum can be in the form of a pledge from a property purchased with CPF savings. The Minimum Sum provides CPF members with monthly payouts during retirement. It varies from the age of individuals and is adjusted with inflation. When a member turns 55, money from his Special and Ordinary accounts will be transferred into a newly-formed Retirement account. The Retirement account will hold up to S$155,000 or it varies with his age-group. Any extra will continue to grow in his respective accounts.
A member can still withdraw up to the first $5,000 from his CPF account even though he is unable to meet the Minimum Sum as the CPF board will immediately pledge the property he purchase during his CPF for up to half the Minimum Sum. Upon reaching 65 years of age, members will get monthly payouts, depending on the cash savings he has in his Retirement account. For members who do not make any withdrawal, money in their Ordinary account will earn up to 3.5% per annum. For Special, Medisave and Retirement accounts, the current interest rate is up to 5% annually.
Members can choose not to set aside the Minimum Sum unless they have purchased life annuity with payouts that is equivalent or more than their expected retirement sum. Over the years, the minimum Sum was set at $80,000 in 2003 and has rose over the years to match up with inflation and higher standard of living.
Will you reach the minimum sum when you retire? Are you aware how much do you need for retirement? Besides CPF’s retirement account, do you have other sources of money for retirement? What happens if you do not have enough for retirement and you are too old and weak to work?