Retirement age in Singapore: Is it just a number?

The official retirement age in Singapore is 62. And because it’s “official,” it invariably leaves an imprint on the back of the minds of working adults – that they can “finally retire when they reach 62.”

What retirement means differs from person to person. For most, to retire is a special point in life when they would live off their nest egg and not have to work. It’s like the beautiful conclusion of the story we’ve been weaving since young adults.

While 62 is the official retirement age, it doesn’t mean we can’t retire before this age. In fact, we’ve known individuals who make it their goal to retire at 40, 45, or 50.

Retire at 62 any age

There’s no strict timeline for retirement. You can retire anytime you wish to as long as you meet one condition – to have enough money to support your lifestyle (and perhaps leisure as well) during your retirement.

A recent survey by AIA in Singapore finds that majority of Singaporeans will run out of money to spend during retirement by the time they are 70. This means if you live until 85 years old, you’ll have 15 years worrying about money when you should be enjoying what you’ve planted.

But who’s surprised really? We all know we have to save for retirement. That is one of the primary reasons why we work. We want to support ourselves in the present and we want to have enough to support our future. It’s just not acceptable to have our children as our retirement plan.

See also: Yes, investing will make you rich!

Moreover, retiring at 62 could be a bit too late. We all know this (though some of us might still be in denial). Our physical bodies aren’t in the same condition as they were five or ten years ago. We may lead a healthy and active lifestyle, but biology will time and time again prove how a 20-year-old can effortlessly overtake a 60-year-old in a race, a hike, or even a casual walk in the park.

Don’t you think it’s rather ironic? We see retirement as the time to enjoy various activities, like travels, food trips, or playing with grandkids. Yes, we’ll finally have the time. But the more important question is do we still have the strength? We want to explore new things... but can we still – at 62?

Aim to retire early

In no way are we saying that you should quit your job and retire tomorrow. Retirement requires careful planning, as you would a marriage or a sales pitch. Remember, you still have responsibilities to take care of – bills to pay, family to support, and a nest egg to build.

Instead, we are saying that you should make your money work harder for you so you can build your nest egg faster, hence, retire earlier than 62.

See also: Learn how to earn passive income (2021)

Regardless of whether you’re working for someone else or you’re running your own business, you are currently making an active income. Most people who don’t know better will simply leave their money in the bank or whatever is left of it after paying off all expenses. But we hope you know by now that inflation will just eat your hard-earned money away when you let it sit in the bank.

Plus, the cost of living in Singapore isn’t exactly getting any lower. Never mind that Singapore is already ranked as one of the world’s most expensive cities. Things are always going to get even more expensive.

This is where you have to explore more ways that would complement your active income. Yes, you have your CPF, but is it enough? Why not consider other avenues to get passive income?

Invest for passive income

If you want any chance at all of getting out of the proverbial rat race, then you can’t “wait till things get better” before you start investing.

Investing doesn’t have to be scary. As we always say and as you’ll soon find out, it doesn’t require you to have a financial background to get started and do well.

So, start putting your mind to work and think about how you can generate 5%, 10%, or more on your money.

What instruments are available? How much money can you safely invest without hurting your capability to still uphold your current responsibilities? Can you invest in properties? Can you put your money in equities or stocks? Would you rather invest in ETFs or REITs? Should you hand your money over to a fund manager?

Before you take any action and put some skin in the game, educate yourself. Don’t dive in blindly and hope you’ve made the right bet. That’s just gambling, plain and simple.

Don’t get lazy and pass your money to some “advisor” hastily, hoping that he/she can grow your money for you. It’s your money, so it’s your responsibility, not theirs.

Do your homework, learn how to invest. Know what your risk appetite is, be familiar with the fees involved, and understand how your returns are being generated. Learn the ropes, start small, avoid exciting shiny objects, and build up your asset base slowly and steadily.

When all is said and done, you’d be glad you started now.

Allow us to help you jumpstart your investing journey. Join our free online bootcamp.