Altogether, I will suggest you to do three things, 1) Know your goals; 2) Create a plan; and 3) Regular review.
Goal
To begin with, determine when you intend to retire and how much you need to retire. For instance, let's assume that both of you intend to retire at 65 years old. Accordingly, you have 25 years to save up for retirement. Given that life expectancy is between 83 to 86 years old (females live longer), how long should your retirement fund last? And will you outlive your retirement funds?
Thereafter, we will determine the amount that you need during your retirement years. For example, let's say that you spend about $2k monthly for basic needs and some lifestyle wants today. Assume that inflation is 3% annually, you will need about $4k by the time you reach 65 years old.
Plan
Next, we will brainstorm on all the resources that you have that is able to help you fund your retirement. To illustrate, this could be to ensure that you reach Full Retirement Sum by 55 years old. Thereafter, you can join CPF LIFE and receive at least $1k monthly from age 65 onwards for life. In this case, we use CPF LIFE to lay the foundation for our retirement with its guaranteed stream of income for life (mitigate longevity risk).
Obviously, CPF LIFE itself may not be enough based on our earlier calculation. In detail, we need to plan another $3k monthly for say, 30 years. In order to keep this response simple, I will use simple Mathematical calculations, i.e. $3k x 12 x 30 = $1,080,000.
As we continue to work backwards, that means that we need to save about $43k in the bank @ 0.05% per annum. At this point, the question will be: does your cashflow allow you to save about $3.6k monthly? Maybe not.
In this case, there are two things that we can do, either delay your retirement, or to put your money into another financial instrument that is able to give you a higher yield, say 4% per annum.
Thereafter, you realise that you need to save about $25k annually now. By following this idea, create a plan that works for your needs. Of course, you can also choose to work with a professional who will craft all these planning for you.
Review
Once you are comfortable and confident with your plan, execute it and conduct regular reviews. For example, if you are investing your money into a well-diversified portfolio, then you should check and confirm whether the funds are still inline with your goals. If not, is there any actions that you should take?
Overall, there are many ways to go about planning for your retirement. In order to do so, you will need to establish your goal first. Thereafter, it becomes clearer on the types of financial instruments that you can use to help you achieve your goal.
I share quality content on estate planning and financial planning here.
Altogether, I will suggest you to do three things, 1) Know your goals; 2) Create a plan; and 3) Regular review.
Goal
To begin with, determine when you intend to retire and how much you need to retire. For instance, let's assume that both of you intend to retire at 65 years old. Accordingly, you have 25 years to save up for retirement. Given that life expectancy is between 83 to 86 years old (females live longer), how long should your retirement fund last? And will you outlive your retirement funds?
Thereafter, we will determine the amount that you need during your retirement years. For example, let's say that you spend about $2k monthly for basic needs and some lifestyle wants today. Assume that inflation is 3% annually, you will need about $4k by the time you reach 65 years old.
Plan
Next, we will brainstorm on all the resources that you have that is able to help you fund your retirement. To illustrate, this could be to ensure that you reach Full Retirement Sum by 55 years old. Thereafter, you can join CPF LIFE and receive at least $1k monthly from age 65 onwards for life. In this case, we use CPF LIFE to lay the foundation for our retirement with its guaranteed stream of income for life (mitigate longevity risk).
Obviously, CPF LIFE itself may not be enough based on our earlier calculation. In detail, we need to plan another $3k monthly for say, 30 years. In order to keep this response simple, I will use simple Mathematical calculations, i.e. $3k x 12 x 30 = $1,080,000.
As we continue to work backwards, that means that we need to save about $43k in the bank @ 0.05% per annum. At this point, the question will be: does your cashflow allow you to save about $3.6k monthly? Maybe not.
In this case, there are two things that we can do, either delay your retirement, or to put your money into another financial instrument that is able to give you a higher yield, say 4% per annum.
Thereafter, you realise that you need to save about $25k annually now. By following this idea, create a plan that works for your needs. Of course, you can also choose to work with a professional who will craft all these planning for you.
Review
Once you are comfortable and confident with your plan, execute it and conduct regular reviews. For example, if you are investing your money into a well-diversified portfolio, then you should check and confirm whether the funds are still inline with your goals. If not, is there any actions that you should take?
Overall, there are many ways to go about planning for your retirement. In order to do so, you will need to establish your goal first. Thereafter, it becomes clearer on the types of financial instruments that you can use to help you achieve your goal.
I share quality content on estate planning and financial planning here.