The recommendation is frequently to start young when it comes to investing and retirement savings. However, given the current state of the economy, there are now additional difficulties, with many people concerned about their job security. But precisely because of these difficult circumstances, getting a head start is even more crucial. According to market observers, starting early gives investors a longer runway to profit from the compounding effect over time. The capacity to weather market volatility is another benefit of a long runway.
CPF savings are frequently the cornerstone of retirement planning singapore.
The earliest retirement age
The retirement age has been raised to 63 as of 1 July 2022 and will be gradually raised to 65 by 2030. This means that, for age-related reasons, your employer cannot advise you to “retire early” or fire you from your position before the age of 63. The minimum retirement age safeguards you and offers you a little extra time to increase your savings before deciding to permanently leave the workforce.
Why starting in your 20s is the best time
- Less financial obligations
Although it may be tempting, your 20s will be the decade of adulthood during which you have the fewest financial obligations.
Start your retirement plan today even if you have more financial obligations than the typical Singaporean 20-something. You have the benefit of time, allowing you to fully capitalize on compound interest.
The first step in retirement planning is education, and it may take some time to fully grasp your alternatives and the best course of action. Although self-education is crucial, you don’t have to travel this path by yourself. Your decision-making and long-term planning can benefit from a small amount of financial support. To start planning for your retirement, talk to a financial advisor.