I’m a newbie in this :/ To get retirement plan or savings plan?

Hi there,

Just to firstly address the main question of whether you should get a retirement plan or saving plan:

Both plans guarantee your capital so if you are looking at something guaranteed, then you can look at the two of them. The difference between the both of them is the time the payout is given and in what way is it paid out. A retirement plan offers a guaranteed payout monthly (eg. $1,000/month) during your retirement age eg. Age 60 etc. There are no partial withdrawals allowed for retirement plans. So the main objective of a retirement plan really is to complement your CPF pay out during your retirement age.

This is different from a saving plan where a saving plan allows you to receive your payout either in full upon maturity (if you leave it In without touching it) or partial withdrawals. Some saving plans even give you guaranteed bonuses eg. AIA Flexi Cash Reward. The time horizon is shorter (depending on how old you are) compared to a retirement plan.

For your second question on insurance, you may want to consider opting for a critical illness coverage. The reason is because in the event a CI strikes, your CI insurance payout will enable you to continue funding the plan. The insurance portion usually comes first, then the wealth accumulation (savings/investments) Because it protects your income without you having to burn your savings for your medical needs. Also, you have to account for the possibility of you not being able to work due to a CI (and your inability to fund the plan because of that). Thats where your CI insurance comes in.

Death insurance is really for your dependents so if you feel you are running on a tight budget and not looking at providing for your dependents, then you can skip it But ultimately, do consult a licensed financial advisor to explore your options.

Financial planning is an integral part of life. You can reach me here to find out more.

I have both a retirement plan (for myself) and a savings plan (for kid's education).

This not only forces me to save (i.e pay myself first, set and forget), but more importantly it provides me a mental safety net AND a financial safety net so that I can go to sleep at night knowing that I'm in good position to take calculated risk in my investment journey.​​​