4 Wise Retirement Tips MoneyOwl’s CEO Has For You

It’s everyone’s dream to have a blissful retirement, but Singaporeans are finding it difficult to prepare for their golden years. MoneyOwl’s CEO & CIO dishes out four tips on how one can retire worry-free.

Retiring comfortably is an aspiration that everyone shares, whether it’s the fresh graduate taking his first steps into the office or the veteran employee who can operate the coffee machine in his sleep. In Singapore, there are several schemes implemented by the Government to help working professionals turn their retirement dreams into reality.

Firstly, there’s CPF LIFE, an annuity plan which currently pays out a maximum of S$2,230 per month. Secondly, the voluntary Supplementary Retirement Scheme allows individuals to open a specialised bank account from DBS, OCBC, or UOB to accrue additional funds for retirement. Finally, you can make a lump sum withdrawal of S$5,000 from your CPF accounts.

Despite these schemes and other solutions, Singaporeans are reportedly still financially unprepared to retire. In response, robo-advisor MoneyOwl launched its Fullerton MoneyOwl WiseIncome fund in March 2021.

According to Chuin Ting Weber, CEO & CIO of MoneyOwl, this product was created as ‘a stream of reliable income on top of CPF LIFE payouts’.

The firm’s top owl went on to share four tips on how you can secure a comfortable retirement. These include:

1. Knowing your priorities
2. Calculating how much you need
3. Taking the time to learn
4. Some personal advice from the CEO

1. Know what your priorities are

It goes without saying that to have a worry-free retirement, you should start saving up for it as early as possible. However, Chuin Ting believes that “there must be a balance between living a purposeful life now and saving for the future”, citing an example of parents deciding whether to bolster their retirement fund or save up for their child’s education.

“While you can defer retirement, you cannot defer your child’s education. The parent may then want to save for the child’s education first,” she explains.

Other immediate priorities mentioned include marriage and purchasing your first home. These can’t be delayed, given the amount of time needed. Ditto for that home purchase, seeing that some BTO projects will take years to complete.

2. Do the math

Saving up as much money as possible for retirement is much easier than taking the time to calculate an ideal sum needed. However, now that you know you have to balance immediate needs with building a retirement fund, what is considered the ideal sum? Chuin Ting feels that an ample retirement sum will vary for different age cohorts and that everyone defines ‘enough’ differently.

Her tip in this instance would be to make a projection based on your desired retirement age and growth rate of your CPF accounts, assets, and other surpluses. “Thereafter, we can take a step back and look at whether we are happy with the result. If we are not, we make adjustments to our current lifestyles and corresponding savings and expenses,” she says.

3. Knowledge is power...and money!

Chuin Ting believes that finding comprehensive and trustworthy financial advice is a large hurdle Singaporeans face. She feels hard-selling and a platform or advisor’s conflict of interest are factors that make the financial planning process uncomfortable.

However, she adds, “Many Singaporeans want a human advisor to advise them, not just a robotic platform; CPF, investments and insurance can be complicated and many need advice on how to best put these solutions together to meet their financial needs.”

Take the time to find a financial advisor that you can trust while equipping yourself with personal finance knowledge from a mix of online resources and hardcopy books. This allows you to make more informed decisions and discern whether an advisor is recommending the right products for you.

4. Some personal advice

Chuin Ting is no stranger to retirement planning, sharing that she’s personally preparing for it by first ensuring that her family is financially healthy. She says that she has an emergency fund tucked away in bank accounts and MoneyOwl’s WiseSaver product. She adds that she is not over-leveraging on any of her investments as well.

She explains that doing so allows her to ‘run the marathon of investing’ and avoid having to liquidate investments to fund her living expenses. Speaking of (literal) living expenses, she shares that her whole family has ‘necessary medical expense insurance’ and ‘low-cost insurance’ to protect them from loss of income from death, disability, or a medical crisis.

Finally, she adds that she plans to reduce the risk level of her investment portfolio when she’s closer to retirement.

In conclusion

Not only has life expectancy in Singapore risen by more than five years since the turn of the millennium, individuals are leading more fulfilling lives in their sunset years too. Therefore, adequate retirement planning is more important than ever before to ensure that an optimal quality of life is maintained.

Admittedly, this isn’t an easy task to accomplish given the myriad factors that affect when you’ll retire and the lifestyle you can lead. Chuin Ting’s word of advice?  “Because financial planning is not one-off (sic), but a lifelong process, you should also review your plan when there are significant life changes”. This allows you to chart your course and keep your retirement dreams on track, no matter what items are on your bucket list.

A 4-kilometer walk in Kyrgyzstan with your fellow septuagenarians, anyone?

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