Hi anonymous, thanks for your question. I will always say, it is never to late to start. Of course we need to be realistic that at 50 years old, if you want to retire at age 55 and you have not started at all, it would be difficult. If you plan to retire at age 65, I will say that 15 years is a good time frame to plan for your retirement.
So how can you get started? I would say, let's start from the lowest hanging fruit - CPF
If you have FRS (currently at $176,000) at age 55 in your RA, you will have about $1500 per month of CPF LIFE payout from age 65 for life. If you have $264,000, you will have about $2000 per month for life. And since CPF interest rates (4%-5% p.a. for Special Account) is decently high relative to the risk, it is good if you can start topping up your SA now, if your SA has not reach $176,000 today. If you are unable to do a single sum cash top up, you can transfer monies from your OA to your SA. Alternatively, you can slowly do a monthly cash top up into your SA.
If you have already maxed out your SA and if your are married and your spouse has not max out his/her CPF SA to $176,000, you can consider doing the same thing for him/her.
The one thing to note is that topping up into your SA is an irreversible process. So before you top up with cash, please ensure you have sufficient liquidity to meet any emergency. Do not top up 100% of your cash. Similarly, if you are transferring money from your OA to your SA, do not wipe out your OA completely, especially if you have outstanding mortgage payments.
There are more options but using your CPF is a good place to start. Hope this helps!
Hi anonymous, thanks for your question. I will always say, it is never to late to start. Of course we need to be realistic that at 50 years old, if you want to retire at age 55 and you have not started at all, it would be difficult. If you plan to retire at age 65, I will say that 15 years is a good time frame to plan for your retirement.
So how can you get started? I would say, let's start from the lowest hanging fruit - CPF
If you have FRS (currently at $176,000) at age 55 in your RA, you will have about $1500 per month of CPF LIFE payout from age 65 for life. If you have $264,000, you will have about $2000 per month for life. And since CPF interest rates (4%-5% p.a. for Special Account) is decently high relative to the risk, it is good if you can start topping up your SA now, if your SA has not reach $176,000 today. If you are unable to do a single sum cash top up, you can transfer monies from your OA to your SA. Alternatively, you can slowly do a monthly cash top up into your SA.
If you have already maxed out your SA and if your are married and your spouse has not max out his/her CPF SA to $176,000, you can consider doing the same thing for him/her.
The one thing to note is that topping up into your SA is an irreversible process. So before you top up with cash, please ensure you have sufficient liquidity to meet any emergency. Do not top up 100% of your cash. Similarly, if you are transferring money from your OA to your SA, do not wipe out your OA completely, especially if you have outstanding mortgage payments.
There are more options but using your CPF is a good place to start. Hope this helps!