Plan for your retirement as early as possible.

In my last post “Why people don’t plan for their retirement”, I mentioned that there are people who either “Work and pay” or “Work and play” in Singapore. That is a vicious cycle in my opinion. The earlier you get out of this vicious cycle, the earlier you can plan for your retirement. So why should we plan for our retirement as early as possible?

I have drawn a simple table as shown above. I have put in three starting age to plan for retirement as 30, 40 and 50. I assume that there is a saving of S$12000 for every year, and all the saving will be used for investment with 5% return annually. I also assume 60 as the retirement age.

If you start at age 30, you will have about S$800k with about S$40k from the return of investment annually when you are age 60.

If you start at age 40, you will have about S$400k with about S$20k from the return of investment annually when you are age 60.

If you start at age 50, you will have about S$150k with about S$7.5k from the return of investment annually when you are age 60.

You can see clearly that the earlier you start to save and plan for your retirement, the better for you when you reach your retirement age. Best of all it only take S$1k per month to do it. So do you want to plan now if you haven’t started planning for your retirement?