The 3 ‘R’s of Retirement to Help You Retire Right

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When it comes to retirement, most of us seem to revert to a kind of magical thinking. On one hand, we eagerly anticipate the day we escape the daily grind, picturing all the places we’ll finally be free to travel to… but on the other hand, we continue doing absolutely nothing to realise this fantasy. Dreams without action and a plan are just pipe dreams.

So what are you waiting for? Planning for retirement isn’t just about the good stuff (round-the-world trips, spending time with loved ones), it also involves wrapping our heads around the bad (mounting bills, inflation, and deteriorating health). Not exactly fun.

We need a new framework for thinking about retirement. So we’ve come up with the 3 ‘R’s of retirement to help you retire right and enjoy your golden years to the max.


1. Reframe your retirement goals

We’ve all heard the advice to “start saving for retirement early” a thousand times over, but that’s only a starting point and not the complete answer. It only tells us the “when” of retirement planning… but not the what, where, how and (importantly) how much.

To fill in the blanks, it’s time to do some soul-searching. What are your retirement goals? What do you want your retirement lifestyle to look like?

Getting realistic about your desired retirement lifestyle will help you decide how much you need to fund that lifestyle. Will you be living the high life, dining out and travelling in style? Or will your priority be to volunteer and spend time with your grandkids? This will tell you whether your retirement income needs to be closer to $10,000 or $3,000 a month.

Don’t be afraid to dream big and reach for the skies… but be realistic, too. The more we want during retirement, the more it costs. Life’s all about trade-offs — how do you want to live today to achieve your dream retirement?

If you’re currently overstretched by supporting your children and parents, it might not be sustainable to aim for a $10,000/month retirement lifestyle. You might be temporarily motivated to do so, but retirement planning is a marathon, not a sprint.

So do reframe your retirement goals with sustainability in mind. Your retirement goal should have a nice balance: it’s a desirable lifestyle, but not so expensive that you burn out trying to fund it.

Sustainable retirement income 101

  • Decide how much annual income you need during retirement
  • Multiply your annual income by 25 for a quick-and-dirty way to determine your retirement number
  • This is based on the 4% rule, known as the “safe withdrawal rate” assuming that you are invested in a globally diversified portfolio of shares and bonds
  • Note: Do adjust the multiplier upwards if you are investing in lower-return vehicles such as retirement income products or bonds
  • For example, multiply by 33 if you’re looking at something that generates 3% annual income; multiply by 50 for a 2% payout rate, and so on


2. Be resilient: stay the course

Saving and planning for retirement is a marathon. That’s why it’s important to stay resilient and keep your eyes on the prize.

Why resilience? Because it’s almost guaranteed that unplanned situations will throw you off-course.

Saving for retirement is a project that spans years, even decades. During this period, there’s a 99.9% chance that life throws a curveball and disrupts even our best-laid retirement plans. Resilience is how you stay the course in face of adversities.

For example, a medical emergency might mean you have to pause your retirement savings for a spell. Resilience means that you stay committed to your plan even if it is temporarily disrupted by circumstances. You resume saving once you’re able to, even if it takes a year or two for your plan to get back on track.

You can further deflect this curveball by having other financial safety nets in place, such as an emergency fund (about 6 months of your living expenses) set aside for rainy days and the necessary insurance plans to protect your hard-earned savings and to help you stay on track with your retirement plans.

As human beings, we’re hardwired to prioritise the here-and-now over something distant like retirement. Resilience helps you stay the course.

The path of giving up may look inviting. But remember, it leads to working past retirement age, making just enough to scrape by, depleting your energy, and preventing you from enjoying your golden years. Don’t go there!


3. Research to make wise financial decisions

You wouldn’t buy a house on a whim, would you? After all, that’s a six- or seven-figure sum we’re talking about! Not a good idea to commit without first researching the options.

The same goes for retirement planning. Although it may not involve a large sum of money like purchasing a house (you can actually start with small regular sums and roll over to a larger amount with time and compound interest), it’s like building a safe haven for our future.

Indeed, something so important (with our future happiness at stake) shouldn’t be done half-heartedly or handled in a flippant manner. Instead, we should carefully research and analyse our needs before committing to a plan.

For example, as you’re probably aware, Singapore citizens have a few schemes to help us with our retirement planning, such as CPF LIFE as well as MediShield Life and CareShield Life to offset healthcare expenses and preserve our retirement nest egg. But are these enough for you? You’ll need to do your homework to decide.

After researching, perhaps you decide you want to supplement your CPF base with other financial products.

That’s great! But steel yourself, because what follows is… a LOT MORE RESEARCH. From retirement insurance to DIY investing, every option has its pros and cons and you’ll need to assess which are suitable for you and your goals. And within each type of product, there are so many providers vying for your business.

One way to reduce the legwork and get professional input is MoneyOwl, an NTUC Social Enterprise and a financial advisory and fund management company licensed by the Monetary Authority of Singapore. MoneyOwl isn’t tied to any one provider, so it can aggregate different retirement plans and let you compare them easily in one place.

When you sign up with MoneyOwl, you’ll get a dedicated client adviser to walk you through the options and help you make an informed decision. But don’t worry about them hard-selling products with the highest commissions that benefit them — MoneyOwl’s client advisers are salaried and do not rely on commissions, so you can be assured that they will provide conflict-free advice and recommend products in your best interests.


Purchase a retirement income plan & savour FREE barista-style coffee at home

Interested in working out your retirement goals with MoneyOwl? They’re currently offering an atas promotion that involves free barista-style coffee at home.

From 1 March to 30 April 2022, the first 100 to purchase an eligible retirement income plan through MoneyOwl will receive a De’Longhi Stilosa Pump Espresso (worth $269). For this promo, eligible plans include offerings from NTUC Income, Singlife with Aviva, Manulife and Etiqa.

We’re not saying you should sign up for a plan just for a coffee machine! But if one of the eligible products fit your needs, it’s a nice perk. After sorting out your retirement plans, you’ll probably want to celebrate with a nice cup of coffee anyway — and think of all the money you can save by enjoying your cuppa at home instead of travelling all the way out to town to have it in a cafe!

In addition, MoneyOwl rebates up to 50% of the first-year basic commission they receive from the insurer of your new plan so you can save more!

Kick-off your retirement journey with MoneyOwl. Find out more about the MoneyOwl promotion here.


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