Sunday, July 25, 2004

Planning for retirement 

The Sunday Times has a regular section on investment. It’s usually quite basic, carrying mostly articles on money management, financial planning and asset allocation.

Today, though, The Sunday Times also carried a special supplement on investment, which provides readers with a wide range of investment advice, including financial planning, high-yield bonds, credit card usage, stock options, insurance, property and unit trusts.

In my opinion, though, basic financial planning is still paramount. Without the basics in place, the individual is in no position to invest significant amounts of money.

In this respect, today’s feature by Leong Chan Teik in the regular investment section, titled “Can you afford to live to 100?”, is useful. In particular, it focuses on one risk in financial planning that many people neglect: Outliving their money.

Life expectancies are getting longer. Inflation and medical costs can eat up a significant portion of one's retirement savings.

And medical problems for the aged are often chronic in nature, so their treatment often has to be maintained for long periods of time. This is obviously costly.

Furthermore, as more treatments become available through medical advances, medical costs will continue to escalate. Financial planning must take this escalating cost into account.

The Singapore government has always been mindful of the cost of caring for an ageing population. It regularly urges Singaporeans to plan for their retirement and not rely on the government or their Central Provident Fund savings alone to fund their retirement.

Leong's article will be helpful in reinforcing this point.

Some government-sponsored resources available on the Web:

Benefits of Financial Planning

Enjoy Financial Security


I agree that basic financial planning is paramount. Common sense and wisdom should guide investors at all times. For example, "don't spend more than you earn" or "be afriad when people are greedy and greedy when people are afraid".

You'd be surprised how often basic rules of money management aren't followed in the USA. People are so deeply in debt that its scary.
Tom from Sixthworld

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