How to ease your retirement anxiety

worried senior woman in front of her laptop

Are you feeling anxious about retirement?

Whether you’re not ready to give up your day job or you’re just worried about making ends meet, you’re not alone.

The good news is that there are plenty of things you can do to ease your retirement anxiety. Here are a few tips to get started.

Analyze your finances

Take a good, hard look at your finances.

How much money do you have saved up? What are your monthly expenses? What are your sources of income?

Figure out how much money you will need to live comfortably. Once you have a clear understanding of where you stand, you can start developing a plan to get yourself ready for retirement.

Don’t forget to account for things like healthcare and travel. Once you have a ballpark figure, start saving as much as you can. Automating parts of your finances can also help make this process easier.

Stay healthy and active

One of the best ways to ease your retirement anxiety is to stay healthy and active. If you’re in good shape, you will be less likely to feel stressed over the unnecessary.

Physical activity releases endorphins, which have a calming effect. So make sure to get plenty of exercises, both during your working years and after you retire.

And don’t forget to eat healthily as well. Eating nutritious foods will help keep your body and mind in tip-top condition.

Work part-time in pre-retirement
colleagues working in an open office

Image Credits: thebalancemoney.com

One way to calm your nerves about not being ready for retirement is to work part-time in pre-retirement. It’s a wonderful way to ease into the transition and keep your brain sharp.

Plus, it can help you stay social and connected to the workforce. You never know, you might even like it so much that you decide to stick with it! There are plenty of part-time opportunities out there, so take your time and find the right one.

Consider teaming up with a financial planner

Lastly, consider teaming up with a financial planner.

They can help you create a plan that makes the most sense for your unique situation. They can also help you stay on track as you make your way to retirement.

Another thing you can do is start saving now. It may seem like a daunting task, but if you start small and make it a habit, you will be in good standing by the time you retire.

The key is to take things one step at a time and not to stress about things you can’t control. Retirement is something to look forward to, but it’s also okay to be a little bit nervous about it!

Retirement can be a scary prospect, especially if you’re not feeling as ready for it as you would like. But there are things you can do to calm your nerves and ease into retirement gradually. Start by evaluating your current situation and see where you might be able to make a few small changes to ease the transition. Maybe you can start working part-time in pre-retirement or downsize your home to free up some extra cash. Whatever you do, don’t try to do it all at once. Retirement is a gradual process, so take things slow and give yourself time to adjust.

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How Can Women Focus on Their Retirement?

Women face greater financial long-term risks than men due to several factors. These factors include having a longer lifespan, needing to pay for medical expenses, loss of spouse, and gender pay gap.

Senior Wealth Advisor Sandy Higgins highlighted: “There are varied reasons for this gap, but what holds true are the statistics and cumulative impact of this on retirement savings.”

While the difference between the wages of men and women do not seem large to many, the results can be substantial over time. Thus, it is important for women to focus on their retirement plan. Consider the following tips.

#1: INCREASE YOUR KNOWLEDGE

Despite having a tendency of being more responsible with money, women were not allowed to open a bank account in their name before the 60s. Today, men are still regarded as the primary financial providers for their families.

Dance with the times by being educated on your finances. Brush up your knowledge on personal finance to get more confident as time passes.

#2: KNOW YOUR SPENDING HABITS

To grow your golden nest in the future, you must become aware of your shopping habits. Tracking your spending allows you to identify where your unnecessary and unplanned purchases happen. This way, you can modify it to achieve your retirement saving goals.

#3: PRACTICE BUDGETING

Always budget the expenses before signing a lease or making a major financial decision. It is important to recognize the full cost of your choices, including your rent or mortgage payment.

Experts say that the most common rule of thumb in housing is that your total housing costs should be no more than 30% of your gross monthly income. Stay as close to this amount as possible.

#4: GET READY TO RETIRE

A woman’s marital situation can affect her retirement plan. For instance, a woman may outlive her husband by several years depending on their age difference. Second marriages and stepchildren can also affect retirement planning.

Image Credits: unsplash.com

Structure a realistic and attainable retirement plan. Do not forget about your husband’s assets! Know which assets will be divided among you and your children once your spouse dies.

Sources: 1 & 2

 

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Tips to stay frugal during retirement

elderly_in_singapore

Retirement may make it tricky to adjust to life in general, notably if you have always been on a tight budget.

You don’t automatically have to stop paying your bills and keep up with house maintenance just because you’ve entered the next phase of life. In fact, it’s more crucial now than ever to allocate additional expenses for outings to the country club or for relaxing holidays.

Now’s the perfect time to employ your knowledge in personal finance if you’re thinking of retiring! Here are several tips to help you stay frugal during your golden years.

Define your goals and budget

First, you need to define your goals and budget. What do you hope to achieve in retirement, and how much money do you need to make that happen? Once you have a firmer idea of what you’re working with, you can start brainstorming ways to save.

Next, take a look at your regular expenses and see where you could cut back. Maybe you don’t need that expensive subscription plan anymore, or maybe you can start brown-bagging your lunch instead of eating out every day. Paring down your expenses will free up more money to save for retirement.

Bonus advice: One of the smartest things you can do for your retirement savings is to invest them. Investing allows your money to grow over time, so you can comfortably retire without having to worry about finances. There are many diverse types of investments available, though, so talk to a financial advisor to figure out which one is best for you.

Invest in quality over the price tag

When it comes to spending your money during retirement, it’s essential to invest in quality over the price tag. Sure, you may be able to save a little bit of money by buying the cheapest version of something, but in the long run, you will be much better off if you spend a little bit more and purchase something that’s going to last.

For illustration, instead of buying the most inexpensive watch available, invest in a quality timepiece that will last for years. Likewise, rather than opting for the most affordable clothing options, choose well-made pieces that will resist wear and tear. By spending a little bit more upfront, you will avoid having to constantly replace items and will be able to stick to your budget much more efficiently.

Seek free or relatively low-cost activities
elderly playing chess

Image Credits: lionraw.com

When you retire, it’s important to find ways to stretch your dollar. One way to do this is by seeking free or low-cost activities. There are several things you can do to keep costs down.

For example, you can take complimentary online courses, visit museum exhibitions with free admission or participate in meetups and group activities. You can also save money by cooking at home and avoiding expensive restaurants. Whatever you do, make sure that you’re budgeting wisely and that your retirement expenses don’t put too much stress on your budget. Retirement should be a time of joy and relaxation, not financial worry.

Get creative with your living situation

One way to save money during retirement is to get clever with your living situation. For instance, consider downsizing to a smaller home or moving to a less expensive neighborhood. You could also consider sharing a home with a friend or family member or renting out a room in your house.

Another way to save money is to be mindful of your spending habits. Try to avoid buying unnecessary items and be conscious of the things you do spend money on. There are many ways to be economical without having to deprive yourself of the things you enjoy. It just takes a little bit of restraint and inventiveness.

Learn to cook and enjoy meals at home
Singapore supermarket

Image Credits: straitstimes.com

One of the wisest things you can do to save money during retirement is to learn to cook and savor meals at home. Not only will you save a ton of money on delivery food, but you will also have the satisfaction of knowing that you made your meal from scratch. Here are a few suggestions to help get you started:

  • Try no-frills recipes that are effortless to follow and don’t require a lot of ingredients.
  • Browse cooking blogs for inspiration, or take a cooking class at your nearest community center or a cooking school.
  • Invest in some quality kitchen utensils and equipment. A fast blender, for example, will make cooking much more pleasurable.
  • Be creative and experiment with distinct flavors and ingredients. You might be pleasantly surprised at what you can come up with!

Being thrifty and living within your means is more paramount now than ever when you’re retired. But keep in mind that a thrifty way of living values conserving money as effectively as possible and is cost mindful. It’s critical to assess your financial situation in retirement and determine whether being frugal is a good match. It should not be thought of as a punishment to be thrifty since it can be financially empowering in the long run. Strive to maintain your retired lifestyle while keeping within your budget by considering the advice provided in this article.

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Singapore Parents Spend More Money on Children’s Needs than Retirement

Starting a family requires careful planning. With a clear idea of what it entails and the schemes available to help ease new parents’ financial load, you will be able to embrace one of life’s greatest blessings.

As you allocate your budget, you must consider both your childcare expenses and your retirement fund. Prioritizing these two is easier said than done. A 2021 study by AIA Singapore revealed that young families in Singapore have deprioritized planning for their retirement to give way for the monthly expenses on their children.

The participants of the study (i.e., parents) were found to be spending 2.5 times more money on their children’s monthly expenses, rather than taking charge of their own retirement planning. These Singapore parents spend almost 20% of their income on their children’s needs and allocate less than 7% on their retirement fund. Furthermore, 70% shared that they intend to either increase or maintain the amount of income allocated to their children’s expenses. The increase of allocation to the children’s expenses is affected by the higher childcare costs amidst the pandemic.

Apart from this, the pandemic also affected their savings. One in three Singaporeans’ savings was negatively impacted in 2020, with a median amount of between S$251 to S$500 set aside monthly for retirement. It is challenging to find a balance between all the primary categories of your budget, but you must not overlook the importance of retirement planning.

“Retirement planning is an essential part of securing our longer-term financial security, not just for parents, but for the entire family, so everyone can look forward to a brighter future with peace of mind,” said Melita Teo. Melita Teo is AIA Singapore’s Chief Customer and Digital Officer.

As parents, you want to support your children by giving them the best opportunities to secure their future. Hence, you must consider creating a retirement plan to help navigate your seamless transition to the golden years. With this retirement plan, you will not need to fully rely on your children.

Start by reviewing your financial situation and financial plans. Establish a fresh budget for your household that will accommodate both your childcare costs and your retirement fund.

Talk to professionals, your trusted friends, and family members to have an idea of what it costs to pay for your child’s needs and your personal retirement needs.

Image Credits: pixabay.com

Research on various government schemes such as Enhanced Baby Bonus, Enhanced MediSave Grant for Newborns, and other subsidies for center-based infant and childcare. Newborns who are registered as Singapore Citizens at birth are automatically insured under MediShield Life. These schemes and benefits can help free up some of your expenses to boost not only your childcare budget, but also your retirement fund.

Sources: 1, 2, & 3

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Endowus Singapore Retirement Report 2021: Almost 50% of Singaporeans have not started retirement planning

Singapore residents crossing the road

Do you know that though CPF members’ total balance has increased from roughly S$125 billion in 2006 to S$474 billion in March 2021, only 63.6% of active CPF members who turned 55 could set aside their Full Retirement Sum (FRS) or Basic Retirement Sum last year?

Hence, to better understand Singaporeans’ attitudes towards retirement, Endowus has worked with YouGov Singapore to develop the Endowus Singapore Retirement Report 2021. The survey took place in May this year with a sample size of 1099 adults, reflecting our tiny red dot’s adult profile population.

Here are its findings.

39% of Singaporeans are worried about retirement inadequacy

The survey revealed that about 1 in 3 Singaporeans are worried about retirement inadequacy. However, the results varied between the genders. Twice as many men than women confidently agreed that they hold sufficient money for retirement.

Almost 50% of people have not started planning for retirement

While 53% of Singaporeans are planning to use or are currently using CPF to fund their retirement, almost 50% of people have not started retirement planning. This is especially true for the younger age group under 35.

Lower-incomers are less likely to plan for their retirement with CPF
younger Singapore residents

Image Credits: The Jakarta Post

Another worrying factor is that those earning below S$3,000 are less likely to plan for their retirement with CPF when compared to those with incomes above S$6,000 per month. This thus also means that lower-incomers are not making full use of their CPF. It also lowers their chances of achieving the FRS for financial stability at retirement.

Only 25% are currently investing their CPF

The report also showed that close to 70% lack confidence in investing their own CPF monies. That is why only 25% are currently investing their CPF. However, most Singaporeans seek higher returns and ranked it as the most critical criteria for CPF investing.

30% are asking for tools on CPF investing knowledge

There seems to be a gap in using CPF around financial decisions; as such, a third of Singaporeans are requesting tools to help them understand the impact of their financial decisions around their CPF. Some are also appealing for resources to aid them in estimating retirement income from their CPF.

To that, Samuel Rhee, Chairman and Chief Investment Officer of Endowus, agrees. He said, “Considering these shifting time horizons and other uncertainties, more education may be needed to help Singaporeans make better use of their CPF, especially earlier in life, when savers have more time to take advantage of asset growth.”

What about you? Have you started retirement planning? Ponder over these things if you want to be on track to building your retirement fund. For the full Endowus Singapore Retirement Report 2021, please head to endowus.com/insights/singapore-retirement-report-2021.

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