Ready For Life Festival 2023
Emcee Singapore: Charmaine hosted a very engaging and informative session on retirement planning and leveraging CPF savings for financial goals at the “Building a strong foundation to achieve your retirement goals”.
She moderated the hour-long session with panelists David Chua, Managing Director of Bank of Singapore, Thomas Ang, Founder, Steady Compounding and Ong Woei Jiin, Director (Retirement Savings), CPF Board.
Charmaine delved into a wide range of topics from securing retirement goals to making informed financial decisions. The key takeaways from the discussion were:
Define Your Retirement Lifestyle: The first step in retirement planning is to determine what kind of lifestyle you want during retirement. Having a clear vision helps set realistic financial goals aligned with your aspirations.
Woei Jiin added that retirement may not be an ‘end’ but a next stage in life with more focus on choosing to do what’s fulfilling, and being physically and mentally active in ‘refirement’.
Different Financial Goals: Each individual may have unique financial goals, but it’s essential to have a clear plan in place to work towards them.
David shared that he has half-yearly process to review his financial goals with his spouse. This joint commitment helps to estimate the amount of money needed to retire comfortably. These are crucial in managing expenses, such as food, utilities, insurance premium, phone and medical, and saving habits effectively.
Leveraging CPF Savings: Maximise savings in the various CPF accounts:
- Regular voluntary housing refunds to take advantage of attractive CPF interest rates.
- Topping up your spouse’s Medisave and Special Account (SA) to meet the Full Retirement Sum (FRS) and Retirement Account (RA) requirements after turning 55.
- Opting for the Enhanced Retirement Sum for a larger monthly payout.
- Considering delaying CPF payout from the RA to receive a bigger payout later.
- CPF Retirement Planner: CPF offers tools like the CPF Retirement Planner, which allows individuals to set retirement income goals based on their desired lifestyle and projects future CPF LIFE payouts. This tool helps provide suggestions to meet those goals.
Investment Strategies: Some individuals use CPF as a stable and risk-free foundation for wealth compounding. It acts as a secure base that can offset risks taken in the stock market, allowing for more calculated investment decisions.
Thomas reserved his Ordinary Account (OA) funds for aggressive drawdowns eg. during the 2020 COVID-19 market crash, he used funds to buy into opportunities.
CPF Investment Scheme (CPFIS): CPFIS can be used when you’re out of cash and the market offers a good risk-reward ratio.
Thomas used CPFIS to invest in various assets, such as local banks and indexed funds, offering flexibility in investment choices.
Basics of Investment: The session also emphasized the importance of understanding the basics of investment for those who are new to it. Investing can be a powerful tool for growing wealth, but it’s essential to start with a good understanding of the fundamentals.
Overall, Charmaine summarized the valuable insights into setting clear financial goals, making informed decisions and leveraging available resources to secure retirement and financial goals.