To the young person who just began working, retirement seems like a long ways off, and so is relegated into one of those financial goals that will be attended to later in life when there’s more money. However, life quickly gets in the way, and before you know it, you’re closer to retirement and have still not saved up an adequate amount to shield you once the time comes.

There is no ideal moment to start planning for life after work. The earlier you begin, the greater your advantage since you have a longer time in which to build your savings. Where the money is directed towards investments, your long-term investments will better to manage against the effects of short-term fluctuations.

When you begin later, you will have more work to do in order to grow your savings. Bear in mind that you will also have additional expenses such as raising a family, caring for your parents, repaying car and home loans, among others. At this point, because you have to avoid exposing your money to high risk-high return ventures, you are stuck with the low risk investments, which also offer lower returns.

  1. Defining your goals for retirement

Before you begin saving, a long and careful look at your future is necessary. When would you want to retire and what kind of life would you like to lead? Determine how much you will need to furnish that standard of living. Most financial advisors recommend that the monthly amount should be at least two thirds of what you earn just before retirement.

Nonetheless, the real amount will differ from one person to the next. Life expectancy in Singapore is greatly improved today, therefore plan for the number of years you expect your finances to last. You wouldn’t want a situation where you run out of finances and have to depend on others for help.

There are many tools online which can help you carry out the computations, if you cannot afford to consult a financial advisor. These provide an estimate of how much you need to set aside in order to meet your retirement objectives.

  1. Determining your current situation

Calculate how much money is likely to be in your CPF account, savings account, insurance and investments by the time you hit retirement, all factors held constant. Your goal should be to have paid off your financial liabilities by retirement in order to reduce the burden on your monthly income after retirement.

Where you’re building savings for other goals like children’s education, have a comprehensive financial plan which will help you to properly allocate your resources towards your needs. Calculate the difference between the amount you want to have stocked up by retirement and what you have now. Spread the amount from now till retirement to figure out how much you need to save monthly to cover the shortfall. There are also online tools which can help you with this process.

You will also need to assess your insurance covers. Most likely, your healthcare costs will increase the older you grow. If your health insurance was pegged on your employer, you need to plan for insurance after retirement. Consider getting yourself covered for occurrences like critical illnesses, hospitalization, personal accidents and disability.

Explore the option of paying your premiums during your working life so that you don’t have to pay for insurance after retirement, but you still get the cover.

  1. Beginning the work

Put in place a foolproof approach to ensure you stay on top of your savings plan for retirement. For instance, you can make a standing order with your bank to have the amount dedicated once your salary comes in. Consider saving for retirement as binding as any other financial obligation you have, like paying a loan.

The best way to save for retirement is to place the money in a long-term investments plan. This helps you correct for inflation, since money loses value over time. Read widely on investing before selecting a plan you are comfortable with. As the sum grows, diversify your portfolio in order to balance out the risks and returns.

Determine how much you can afford to lose as this will determine the product you can take up. Take your time and consult widely with experts before taking up any investment product. You can also take advantage of the Supplementary Retirement Scheme which is a tax benefit scheme that rewards those saving for retirement.

Monitor your plan on a regular basis and make adjustments according to your changing  situation as well as the current trend in the financial market. It’s natural to want to risk less as you grow older, and save more into your retirement kitty after your expenses decline. For instance, once you finish paying up a loan, consider redirecting the amount into your savings since you are used to living without it anyway.

If you need to reduce the amount you are saving, decide whether you are willing to compromise on the kind of life you want for yourself after retirement and calculate how much you can do without and still be comfortable.