Making Wise Financial Decisions for 2015

newyearAs an independent financial adviser helping people make wise financial decisions everyday, I got to know the real situations and struggles of many families in Singapore, many trying to make ends meet on a daily basis. I am not surprised at all if I meet a person living in Singapore who is not financially prepared for the future.

So what do I mean when I say “Making Wise Financial Decisions”? What are the factors that will help us make wise financial decisions? Why even bother to make any wise financial decisions at all?The reason is very simple, it is not how you start that is important, it is how you end that is equally important, if not more important. Why? It is very easy for anyone in Singapore to earn a decent four figure monthly income at the beginning of our working career but are you able to live on a decent four figure monthly income after you retire at age 65?

As we live longer and longer, our retirement will stretch to more than 20 years! Simple Mathematics will tell you that you will need at least S1,000,000 of retirement nest egg if you are going to have a $50,000 a year lifestyle. That’s $4167 a month. Can you and your spouse live the same lifestyle that you are currently enjoying based on $4167 a month? Think of inflation, 30 years down the road, what will $4167 a month lifestyle will you get?

Then it is wise that you start to create a financial road map to bring you to the destination that you want. I am sure you have planned many overseas holidays and you are no stranger to planning… Start Googling and do your research. Find the best independent financial planner to help you realize your financial dreams, That’s Step 1.

Create a plan that suits you, not one that someone tells you because it is more likely that you will stick to the plan much longer if you really own it. Just like the dream holiday that you have always been looking forward to. That’s Step 2.

What are the ways that will lead you to your destination? I am sure there are many ways to reach Rome. Which way is the most economical and which way is the most scenic and memorable? Start finding out what is available out in the financial markets that will lead you to your financial success. Talk to reliable people who had been there and succeeded. Find the way that you are comfortable with and fully understand what you are getting into. Sometimes, it may be uncomfortable at first because it is alien to you but you will get used to it as you read up and talk to more people who are experts in that particular financial product. That’s Step 3 for you!

Congratulations! You are on your way to making great and wise financial decisions, but wait a minute, you may be lost and could be heading a wrong direction, missed a turn when you were distracted with the beautiful scenery in front of you. Check where you are and consult your financial adviser regularly, orientate your compass and redirect your resources when you have a good bonus payout, don’t splurge on a new 60″ LED Curve Screen Smart TV! Yes, consult and redirect if necessary. That’s Step 4.

Finally, don’t forget to smell the roses and greet the people along the way or else you may be very lonely when you reach your final destination. That’s worse than being bankrupt… Building a great character and making great friendships along the way is definitely a great way to travel… I wish you success in making wise financial decisions that will bring you the desired lifestyle that you have always wanted but remember, it is a journey not a destination.

Enjoy the journey as you plan your way to financial success that you will share with your family and friends, yes even people that you don’t know, bless them and God will bless you too. Merry Christmas my friend. God bless you!

Retirement Planning 101

Retirement Planning, I am sure you have heard of these two words spoken by many financial advisers reps and you may have become numb by all their “Sales Talk”… You may even switch off mentally and tell yourself that it is impossible to save for retirement because you have so many financial commitments now!

I believe part of the reason for your apathy could be that you are blown away by the huge sums of money that your financial adviser rep is showing you! Yes, the sum at your retirement could be $600,000, $1,000,000 or $3,000,000… and you cannot imagine how on earth you could save such an astronomical sum of money!

Fret no more, let’s look at this on a monthly basis… what kind of lifestyle are you living now and are you happy with it now? If you desire to live a lifestyle that requires $5000 a month, then you will have to plan for it to happen right? Success is a choice, it is not achieved by chance.

You need to achieve financial freedom before you can retire, you need to assure yourself a reliable and guaranteed source of income before you can say goodbye to your job forever… and I have the solutions for you! Listen to what I have and you may find that your golden nest egg is achievable after all, on a monthly basis.

I urge you to meet me at my office to discuss how you can achieve a guaranteed monthly income upon retirement and never have any doubts about your lifestyle in retirement anymore. Get it over with and live the life you want without any fear. Call me at 90011082.

Happy New Year 2014 and may all your dreams come true in the Year of the Horse!

Stephen

 

Rapidly Aging Population in Singapore – An Aging Bubble Waiting To Burst?

According to our CPF website, www.cpf.gov.sg Singaporeans are expected to live longer and many of us will live till our 80s.

Here is a quick snap shot as shown in CPF website…

“Number of Singapore residents aged 65 or older…

2007 305,600
2030 795,900

Supporting and caring for a rapidly aging population will be an increasing strain on Singapore’s younger generations. Today, 8.5 economically active persons are supporting one elderly. By 2030, only 3.5 persons will be supporting one elderly! Therefore, it is important that you plan early for a secure retirement”.

China will also be facing an aging bubble, due to their “One Child” policy. As they age, their only child will have to take care of their own family, their two parents and even their grand parents. Social welfare is very little and hardly can help them. This problem will be a challenge for any government.

Singaporeans who are baby boomers, born from 1946 to 1964, myself included, will be one of the 795,900 old folks who will be more than 65 years old AND retired!!! Who will be feeding us if we do not have enough savings? Most of us have two or less children so it is very pressurising for our children to look after their families and their aged parents. Healthy parents may not be a problem to look after, but what if the parents are sick… have high blood pressure or diabetes. These illnesses require long term medication and I am sure it will take a toll on the children footing the medical bills. CPF Medisave is very important and it will be used to pay for medical bills both in and out of hospitals.

So please ensure you have adequate savings for your retirement as well get a Medisave approved private integarted hospitalisation insurance plan.

Savings for retirement can be easily solved. Delayed gratification is the answer!

I personally like a savings plan that requires me to save for only 8 years. Then I wait till I am 65 years old. For the next 10 years, from age 65 to 75 years old, I will receive a guaranteed monthly income. Not only that, I will also receive another HUGE lump sum of money at age 75. That should last me till my late 80s if I live frugally.

My hospitalisation expenses will be taken care of by my CPF Medisave approved insurance plan.

If you are concerned about your old age and do not want to tax your only child, I strongly advise you to start planning now. Your retirement lifestyle is critically dependent on what you do or do not do today!

Not sure how much you need for your retirement? You may want to try out the CPF Retirement Calculator HERE.

In retirement planning, I am an independent financial adviser representative who will help you separate the best from the rest. I look forward to help you achieve your retirement lifestyle while it is still not too late.

How Much Do You Really Need During Retirement?

For many of us, retirement is not even in our radar screen, just like premature death. It will surely happen for we all grow old, stop work and hopefully have enough to last us a lifetime.

What if there is a shorfall? How are you going to live before your bank account dries up? You may be living anxiously, not knowing what to do and where to get your next meal… This pathetic situation will not happen if you are prepared and start planning now.

The main question is ” How much? ”

That really depends on what kind of lifestyle you want. A good gauge is marking it down 60 to 70% of your last drawn pay or you could use an estimate of your monthly expenses during your retirement years.

Most probably, you may not have a reduced lifestyle immediately after you retire. You may even spend more as you travel to new destinations which you were unable to go due to work constraints. The first 10 years of your golden years will probably come at a premium. Be prepared for it, by saving a substantial amount of your income now.

If you have the time, I can meet up with you to give you the solution where the monthly income is guaranteed and the returns are above the bank rates.

I look forward to meeting you soon.

Your Retirement Can be As Long As 25 Years!

The word “Retirement” seems to be on many people’s lips these days… Or rather the inability to retire seems to be the norm… in fact we have been encouraged not to retire at all if possible! Looking around us, what are the old folks doing near where you are staying?

You see old folks sitting under the HDB flat void decks, in coffeeshops, on park benches, alone or with their grand child, or horrors… you see them sleeping on cardboards at night under a bridge or staircase… Are these old folks happy or are they sad and resigned to their fate… unable to change their fate.

You could be one of them in 20, 30 or 40 years time if you do not start planning how your retirement years are going to be like. Start visualising how you want your lifestyle to be, then you calculate how much you will need a year to sustain this lifestyle. Multiply this annual sum by the number of years that you intend to enjoy… You will see that this sum of money is a huge figure… right?

So start living below your means now, save for the future and you will have a good time during your golden years. Delayed gratification is probably the most important element in retirement planning. You can be earning $300,000 a year but if you splash your income on a luxurious lifestyle, you will end up with nothing much to fall back on after you retire. Wake up to the fact that you will lose the ability to generate this income one day. Be wise now or sigh later.

I wish you all the best now and in the future…

Not Enough Money To Retire?

Some years back, I remember watching a video clip of a male senior executive being congratulated by his younger colleagues at a Retirement Party planned just for him. Everyone was so happy and even envious of him retiring, patting him on his back and one by one, his colleagues came by and congratulated him. Everyone thought that he would be spending the rest of his life, enjoying himself and doing the things that he loved. Finally, he could not take it anymore and blurted out that he could not retire and wanted to continue working!

I hope this scene will not play out in reality for you and your loved ones.

Many young people live for the moment, staying in the prime districts of Singapore, enjoying holiday trips to exotic places, flying first class and eating regularly at high end restaurants, buying up big and fast cars, sending the children to the best schools and spending all they have on tuition and more tuition for their kids. Living it up is the motto of many young people nowadays. All is well, until the day comes when the seemingly unlimited flow of wealth stops when age catches up and retirement looms ahead. Too close for comfort, too close to imagine…

Trying desparately to find a way out, many will start to sell their assets for cash. Selling even when the price is below market prices. Vultures will be waiting for such sales! Sadly, many will be taken advantage of and their assets may be sold at the mercy of others who can wait.

Please don’t let such a sad situation happen to you after a lifetime enjoyment of a luxurious lifestyle! Be prudent like a squirrel, start saving for your retirement years so that you CAN enjoy your golden years and do all the things you have been yearning to do. You decide when to retire, not the governement, not your boss, not your company! When you have the funds in hand you can walk away from your job and kiss your company goodbye! Isn’t this true?

Contact your independent financial adviser to work out a plan to leave the company at the age you want!

If you don’t know any financial adviser, I am just a call or email away. I look forward to seeing you soon.

Cheers!

Guaranteed Retirement Income for 10 years!

How would you like to assure yourself that upon your retirement you will receive guaranteed monthly income for the next 10 years so that you are able to live the most wonderful period of your life without any financial worries? Imagine, at age 50, 55, 60 or 65 you will be able to eat, walk, run, sight see and do all the things you love to do without any reservations because you know that you are well prepared financially.

The 10 years immediately after your retirement age is what I call the ” Prime Golden Years” of your life! Imagine all the fun and excitement that you are going to have when you are still healthy and mobile, able to do all the things that you have wanted without a single worry about money.

These prime golden years will be the crowning glory of all the hard work that you have been putting all these years since you graduated from school. It is not just how well you started that matters but how well you end after a lifetime of work too.

With an aging population and low fertility rates, Singapore will experience a greying affluent society which will enjoy the fruits of their labour in their prime golden years. Will you be one of them or will you be sitting at home watching TV with your spouse, trying to make ends meet by staying at home all the time?

Success is a matter of choice, not a matter of chance. Make your prime golden years a success by planning for it now!

Call your independent financial advisor immediately and discuss how you may achieve that lifestyle you wanted all these years. Alternatively, you may contact me for a non obligatory discussion at my office. It is free, for now.

I have the answer to achieve your 10 years of “prime golden years”, are you interested?

Have a blessed Good Friday and happy Easter Sunday!

“Yang Er Fang Lau” Raising Kids For Our Retirement

This Chinese saying “Yang Er Fang Lau” – translated means raising kids to look after us when we are old was commonly used during our parents time during the 1940s, to 60s.  What happened to this saying? Does it apply to us now?

I believe it depends on how we raise our children. If you have inculcated a loving culture and responsibility was clearly displayed at home when the children were young, I dare say there is a higher chance of being look after when you have retired. If you have been absent during the child’s initial years of upbringing in the name of working hard for the family, the chances will be much lower. I may be wrong but I have seen many neglected parents struggling financially without their children’s support. Just visit the old folks living alone in two or three room HDB  flats.

If you are in your late 30s, 40s or 50s now, I believe you do give an allowance to your retired parents. It can range from $50 to $1000 a month, depending on the child’s financial capabilities and commitments. 

What about the next generation?

If you have children who are below 21 years old, what do you think? Will they give you money when you are retired with ZERO income?

If you have any hint or hesitation, I suggest you look for a independent financial advisor to start setting up a plan to have a steady stream of income for life. If not, do give me a call.

If you don’t plan for it to happen, be prepared to go to the Singapore’s family disputes court to battle it out with your children to legally force them to give you a monthly allowance. Very sad, but that will happen if you don’t start to plan NOW!!!

Guaranteed Retirement Income

 
 
 
 

Happy is a man whose wife is happy!

Many Singaporeans will face a lot of uncertainty when they retire at age 62, 65…

After 10 years in the financial advisory industry, I realised that most young Singaporeans and PRs are very much occupied with putting bread on the table, upgrading their homes, getting that dream car, sending their kids to the best schools, paying the utility bills, buying the latest IT gadget, going for overseas trips. Most of us do not or will not bother to take a real hard look into their future, especially their own retirement needs. Maybe it is too far away to even think about it… 20, 25, 30, 35 years later…

Stephen Covey’s book, “7 Habits Of Highly Effective People” advised us that one of the habits was to “begin with the end in mind”. A successful person will plan to succeed and not just hope to succeed. Nobody plans to fail, they failed because they failed to plan!

May I urge you to really set aside a weekend afternoon with your spouse to discuss about this very important but often neglected event of your life. If you are single and intend to remain single, it is even more important for you as you may not have financial support from anyone when you retire.

Let me know if you need help to determine the amount of money you need at retirement.

If you are looking for a guaranteed income for your retirement, I have the solution to meet that need of yours. A visit to my office will clear the air for you and you will enjoy your “golden years” not sunset years.

Deciding to take action and really taking action are two completely different matters.

Taking action will transform your life but just deciding to take action will lead you to nowhere!

Supplementary Retirement Scheme (SRS)

Your Nest Egg

What is the SRS all about?

The Supplementary Retirement Scheme (SRS) was implemented by our Singapore government on 1 April 2001 (Definitely not a April Fool’s joke) to complement our Central Provident Fund (CPF) savings. Our CPF savings were meant to provide for housing and medical needs and for basic living needs after retirement.  SRS contributions are voluntary and are tax deductible on the following year. Contribute in 2010, tax deductible in 2011.

Upon withdrawal of your money in SRS at the prevailing statutory retirement age, only 50% of the amount withdrawn will be taxed as income. You are allowed to spread your withdrawals over a period of up to 10 years  to meet your financial needs. This will result in greater tax savings since you do not have an active income.

If you withdraw the money before retirement, 100% of the amount will be taxed PLUS a 5% penalty will be charged on the amount withdrawn. The 5% penalty will not be imposed if the withdrawal is due to death, medical grounds, bankruptcy and a full withdrawal by a foreigner who has maintained the SRS account for 10 years.

The computation of the SRS contribution cap is calculated by multiplying the SRS cntributin rate by the absolute income base. The absolute income base is 17 times of the prevailing monthly CPF cap of $4500. The SRS contribution rate for Singaporeans and Singapore Permanent Residents (SPRs) is 15% while the SRS contribution rate for foreigners is 35%. That means the maximum contribution per year is $11,475 for Singaporeans/PRs and $26,755 for foreigners.

Since 1 October 2008, employers have been allowed to make SRS contribution directly into their employees SRS accounts and deduct them as business expense.

All Singapore Permanent Residents (SPRs) and foreigners who make a withdrawal from their SRS accounts will be subject to a withholding tax on their withdrawal. The withholding tax rate is the prevailing non-resident tax rate of 20% at the point of withdrawal. There is no withholding tax on withdrawals by Singaporeans.

Please read the Supplementary Retirement Scheme Booklet 2009 for more details.