The latest survey conducted by HSBC Future of Retirement (Healthy New Beginnings) Singapore Report reported that:
- 32% of women say that their actual financial situation got worst after retirement compared to retired men (26%).
- 34% women say that their actual overall health got worst after retirement compared to retired men (18%).
- A higher proportion of working women (60%) do not know how much they will spend on healthcare when they retire as compared to working men (52%).
Among those (men + women) who are still working but unable to retire in the next 5 years, it was found that the following were the main obstacles preventing them from retiring:
- Haven’t saved enough (68%).
- Still supporting dependents (47%)
- Still have a lot of debt (26%).
Strangely, a higher proportion of working men (92%) say they face at least one of these barriers compared to 89% of women.
What the statistics is saying is that women are worst off financially. Not only are women more ignorant on how much they will have to spent on healthcare when they retire, but they are actually financially worst off after retirement as compared to men.
The fact that a higher proportion of working men reported to face obstacles preventing them from retirement could imply one thing: men tends to get worried more easily. But worrying is good because that can be a catalyst to encourage them to embark on a proper financial plan. On the other hand, if a person is not worried about retirement, it is unlikely they will seek proper financial advice.
Another area that does not show up in the statistics is housewives. Housewives do not have any income. They should be very worried about retirement. They do not have the means to invest and to have a financial plan. But what they can do is to ensure that their husbands embark on a proper financial plan.
The following are some practical steps you can take:
Step 1: Start saving early for retirement.
It is never too early to save. When I was young, my parents encouraged me to save when I got my first red packet. But these days, people do not even know what is the meaning of savings. When they walk into a bank, they thought that buying an endowment plan is called saving.
Step 2: Plan for longer retirement
Not only is life expectancy increasing, but it was reported in the same survey that 31% of the retirees say that their relationship with their spouse improved after retirement. So this means, you will want to enjoy your retirement years with your spouse and this can only be done if you have the means to do so.
Step 3: Consider how your healthcare needs may change in retirement
Most people are unable to predict their how much they need to spent on healthcare needs when they retire. This is especially so for women. This means the importance of getting proper insurance coverage. Getting the necessary coverage has to be obtained when young and not old. When you are old, you may not be insurable.
Step 4: Reduce your debts
Most Singaporeans are heavily in debt. This is normally due to their addiction in buying properties. But even first time home owners tend to overstretch themselves in buying a property that is not affordable.
Step 5: Have a financial plan before doing anything else
I have lost count of the number of times people approaching me for financial planning when they have already decided on what to do. For instance, I always tell people why they even bother to call me up for financial planning when they have already sunk 99% of their income and money into buying an unaffordable property? There is no way they can utilized the remaining 1% for retirement planning, buying insurance and even to have kids. But the reason why people still want to engage me for financial planning despite only having 1% of their income available is because they just want to get assurance from me that what they did with their 99% of income was the correct decision. Of course, I will tell them the hard truth: their decision for that 99% is a foolish one.
Step 6: Urgency for women to seek financial advice
If you are a woman, it is urgent that you have a proper financial plan. The statistics is against you. What is NOT financial planning?
- Buying insurance policies is NOT considered having a financial plan. In fact, buying too many insurance policies can ruin you financially.
- Buying an investment-linked policy is NOT considered having a financial plan. The investment-linked policy could ruin your financial plan (if you had one to begin with). See Why is an ILP considered inferior/ a time bomb?
- Attending seminars and courses on investments is NOT financial planning. Actually, majority of the courses and seminars are conducted by unqualified, inexperience and unlicensed individuals. There is currently no regulation on these courses. I have written to the press on this issue but so far MAS refused to regulate them. See my letter here: Regulate investment seminars.
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