You won’t be able to retire. There I’ve said it.

This article had been contributed by Call Levels, a Free SGX Price Alert Tool -


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If the word “retirement” conjure up visions of white sandy beaches, lots of travel, long sips of Pina Coladas and reading all the novels you’ve never had the time to because you’re so busy working to (ironically) save for retirement – it’s not going to happen. At least not the way you think it would. Here’s why:


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  1. Retirement adequacy figures are tremendous

The figures differ from country to country, but generally if you live in a developed city, a decent retirement figure is generally agreed to start at a million dollars. A million dollars sounds like a lot of money, but if you do the math, all it does is to provide you a source of income to continue living your current lifestyle comfortably until the day you die. The more expensive your lifestyle is, the more you’re going to need. You need to set aside enough money to last you at least 25 years (maybe more) and have an account strong enough to withstand unexpected impact.


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  1. Wants are getting more expensive

Our modern lives are full of wants. And we find that these wants have slowly become needs. Take for example computers, internet, mobile phones and flat screen tvs. These are not exactly things that you need, but neither are they things that you can do away with easily. They also become outdated very fast. At the rate they’re being replaced they’re almost a perishable product. Then there are the expensive enrichment classes, club memberships, special diets and supplements…all in the name of making for fulfilling way to spend your silver years.


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  1. Your money will be spent in property

Chances are, you would probably have spent a good portion of your working years slogging to fund big ticket items such as houses and consequently, neglected to fund your retirement account. Although you may be able to capitalise on the profit your house has made – would you really? A dipstick survey shows that people become attached to their homes and would rather keep it for their children rather than monetising it for their retirement.


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  1. You may not be able to be employed in your later years

The discrimination of age; ageism, is a disease the corporate world had not been able to rid itself of yet. Around the world, there are equality laws in place to protect mature workers. However the harsh reality is that these laws are difficult to enforce and there will be employers that do not view mature workers (those in their 50s and beyond) with favour. Many companies take advantage of statutory retirement ages to give their workers “the golden handshake”.  If your source of income is cut short, you’ll be left in employment limbo. This unexpected turn may take a negative impact on your retirement funding.


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  1. Avoid holding a large portion of cash in a savings account

Everyone likes to see cash in hand. But if you hold it all in a savings account, you might as well be setting your money alight. Although it looks like your money is safely locked away, inflation rates will erode the value of your money. An exaggerated way of telling you this is that $100 you have today, will only be worth $1 in 20 years. You’re doing yourself a great injustice if you do not invest your money. Expert opinions suggest that even if you save 50% of your income, you’ll still need about 12 times of this in retirement. (


  1. Don’t allow expensive emergencies attack your savings

Emergencies are going to happen in the many years between now till retirement. A bad car accident, expensive motor vehicle repairs, a fire in the house, a spouse or children may become retrenched and you need to help them out. A failed business endeavour. Taxes you didn’t prepare for. Theft. Normally these would be protected by insurance but if for some reason you didn’t buy and pay regularly for an insurance package, then you will have to be paying for these emergencies in cash – and it would be more than likely payment would come out of your retirement savings.


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  1. Avoid poor investment decisions

It isn’t easy looking for a suitable outlet to put your money to work. How would you chose? Conservative investment options usually offer poor interest rates. The more lucrative ones expose you to greater risk, but more exciting returns. And then there are also scams disguised as legitimate investment tools. To prevent yourself from poor investment decisions you’ll need lots of research and knowledge. It is almost necessary to track the investments on your own. There are many good tools to track prices of funds, equities, forex and commodities. Use them to keep ahead of your fund manager and your fingers on the pulse of the markets.


  1. Understand that lifespans are increasing

Medical science has made great advancements and it is a fact that life spans are getting longer. However, we may not be as prepared for longer lifespans and it is normal human behaviour to spend and enjoy just in case you don’t get to do so. However, the real danger though is that you live longer than your retirement savings does and that would be true misery.


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  1. You don’t realise how expensive healthcare is until it is too late

Generally, we don’t spend as much on healthcare in our younger years. However as we age, we are going to spend more and more frequently on healthcare. When in health, we generally do not think about falling ill and hence many of us underestimate how much time and money needs to be spent on healthcare in our silver years. There are checkups and tests, small medical conditions can be quite serious. There is medication, procedures and a variety of consultations. All these can be very expensive and can happen very unexpectedly. If we were penny wise and pound foolish, opting to save and not purchase adequate insurance and healthcare plans, the only pool available to dip into would be retirement savings.


  1. You let instant gratification get the better of you

We’re living in a very commercial world that is hyper stimulated with all manner of marketing material. You’re told you want/need/must have every little thing that is flogged in malls and magazines. Building a healthy retirement portfolio also means having to give up on expenses today. A little tradeoff goes a long way, but can you commit to that?


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How does one really prepare for retirement then?

Have a look at this graph, you want to be at position 1 when the time comes. Position 2 is risky and position 3 will see you in a miserable situation.


Clearly you need to invest your money in an asset of choice. To help you preserve your money, we’ll run through the necessary (but uncomfortable) facts once again:

  • You may outlive your money
  • You will get sick and spend more on healthcare in your later years
  • You may not be as employable as the years go by
  • Purchase insurance when you’re young and when it is cheap
  • Live a lifestyle that is sustainable. One rule of thumb holds that you need to save 25 times your annual budget by retirement, suggests Sheyna Steiner, a senior investment analyst at Bankrate.

With all the money put away, choose your favourite investment tool and put your money to work as soon as you can. Track these actively and don’t spend a dime of it on anything else.

The corporate world is becoming increasingly vulnerable to disruptions, careers are becoming uncertain. There is overall complexity and ambiguity fogging our futures. Retirement planning now requires taking an active role. One needs to be realistic, living sustainably and always to be prepared for the uncertain.

If otherwise, it may be well true that you will never be able to retire.


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