People sometimes think retirement planning is tough. It takes a long time and requires a lot of money. For example, to achieve the CPF Life Enhanced Retirement Sum and enjoy a monthly income of between $1,770 and $1,920 from age 65 onwards, an individual would need to set aside $241,500 in their CPF Retirement Account at age 55. And if we assume the individual wants to retire at age 55 with a monthly income of $1,800, then the person would need an extra $216,000 to see him through from 55 to 65.

Is a total of $457,000 a target too much to accumulate by age 55? Let’s take a look at it.

Balancing Your Spending And Saving

It is easy to go on either extreme when it comes to money management. There are people who simply do not save, and are constantly finding new ways to spend away any pay increment or bonuses that they get. On the other spectrum, there are those who scrimp and save every single penny to the extent that daily spending becomes so stressful to deal with.

We want to advocate that you should enjoy life today without having to sacrifice your enjoyment tomorrow, or when you finally decide to retire.

Your Monthly Spending Should Be Reasonable

All of us working adults should be responsible enough to be able to manage our month-to-month budget. We all know how much we earn, and what we can or cannot afford. If you are earning $2,500 a month but enjoying restaurant meals and shopping spree every weekend, along with an expensive $150 gym membership and regular taxi rides, then you my friend, have bought in to the idea of consumerism as a way of life.

With all things being the same, someone who earns $2,500 a month should not be spending in the same way as another person who is earning $5,000 a month. Likewise, a person who has to take care of multiple dependants in his family should not be spending in the same way as someone who does not have any dependants.

Can you save 10% of your monthly income each month? This is a question that everyone should answer for themselves. Some people are already doing it (and more), others will find ways to do it and there will be some who can’t do it because they have a standard of living to upkeep.

 

 

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