Is it relevant to start thinking about retirement planning at 27? And if yes, what should I be focusing on/ how do I get started?

Hi Vera!

It is relevant to start planning for retirement as early as possible. The first thing you should do is to accumulate an emergency fund with 4-6 months of expenses and keep this aside in a savings bank account so that it is liquid and can earn some return. The remaining excess amount can be used for investment purposes so arrive at your retirement goals.

One option to start investing is the All-Weather strategy. It helps you to get stable returns throughout different market conditions. At kristal.AI, we have two versions of the All-Weather strategy, name All Weather Unleveraged Kristal and the All Weather Aggressive Kristal. These Kristals differ based on risk appetite and can help you implement the All Weather strategy and protect you from adverse market conditions.

You can read more about the strategy here.

I work at kristal.AI, and it's my passion to evaluate various upcoming investment opportunities.

Hi Vera, thank you for your question and sorry for the late reply. I will say that it is never too early to start although practically speaking, most people start about age 30. If you are able to start at age 27, that will be good as it is easier to reach your goal when you start earlier.

This is how you can start:

A. Building your foundation

1. Make sure you have an emergency fund - 3-6 months of your expenses in cash/SSBs

2. Make sure you are sufficiently insured - you can use this link to assess your need

https://www.moneyowl.com.sg/#/guideme

B. Investing For Your Future

Invest into a portfolio of low cost instruments such as ETFs or Dimensional funds. Please avoid expensive Unit Trust or ILPs. Low cost = less than 0.5% p.a in terms of management fees.

As you are young and have a long time horizon, and if you have build a strong foundation (above), you can consider putting more into equities. Some ETFs you can consider would be:

Bonds - ABF Singapore Bond Index Fund

Equities

a. SPDR S&P500 ETF

b. SPDR Straits Times Index ETF

c. Db x-tracker MSCI Pacific Ex Japan UCITS ETF

Do note that the more you have into equities, the more volatility (ups and downs) you have to be willing to stomach. The good thing is that in investing, if you can stay invested for a long time (10 years), you have a very good chance to get the returns you need. There is no need to try and guess whether you should get out or stay invested based on news etc. Just stay invested in the ups and downs of the market.

Hope this helps.