Am I On Track To Achieve My Retirement Goals?
With the recently announced Singapore Budget 2022 measures, am I still on track to achieve my retirement goals?
We might be aware that in order to retire comfortably, we need to adequately plan in advance to ensure that our retirement funds will not be eroded by the rising costs of living. Yet, in practice, many people do not take into account heightened inflation rates when they create their retirement plan.
Inflation erodes your purchasing power; meaning you have to fork out more money for the same things and hence, affecting your ability to save. Second, inflation can affect your portfolio value, lengthening the time it takes to build your nest egg.
In local context, we are aware of the slew of changes announced in Singapore's recent Budget 2022, including plans to increase the Goods and Services Tax from 7% to 9% in two phases by 2024. The CPF Basic Retirement Sum is also set to rise by 3.5% every year for the next five cohorts turning 55 from 2023 to 2027. While this will mean higher payouts for CPF members, it also signals that the basic cost of living will be maintained at a higher level for a fair period of time. Inflation is real and it is happening – how can you stay ahead of the curve?
In this exclusive feature by Asia Advisers Network, Gregory Fok shares his take on creating a financial planning strategy that is equipped to meet the challenges of the future.
“According to official data released by the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI), Singapore's core inflation rose to its highest level in nearly 10 years in January to 2.4% year-on-year.”
He continues to share more insights.
“Given that most of us often get caught up in our day-to-day pressing needs concerning work, family, and self-care, we may overlook the incremental cost of living on a yearly basis, but the impact becomes substantial over an extended period of time.
To put things in context, if you need to spend S$1,000 ($733), the same standard of living assumed at a 3% per annum increase will in due course become S$1,557 over the next 15 years!
Perhaps it is high time not just to focus on the routine mundane matters but think about the big important issues early in life. Regrettably, the very critical and important things in life such as planning for the future are all too often put off, only to be dealt with if there is time and energy left available.”
Read the entire article at https://www.asiaadvisersnetwork.com/Article/aid/79559/With-the-recently-announced-Singapore-Budget-2022-measures-am-I-still-on-track-to-achieve-my-retirement-goals-