Plan for retirement early, but not wise to spurn CPF for higher returns
GETTING people to start retirement planning early has always been problematic - behavioural science tells us it is a human tendency to mentally postpone difficult financial decisions, and for most individuals more immediate financial priorities such as buying a home and raising a family would take precedence.
It is therefore heartening to see, from a recent survey on retirement planning among Singaporeans conducted by Fullerton Fund Management, that the Covid-19 pandemic has forced many to start planning for retirement early, particularly those in their 30s.
However, the problem is the survey also found that only 45 per cent of those in the 21-30 age group said their Central Provident Fund (CPF) savings would be one of their sources of retirement income. Moreover, reliance on CPF is even lower - at 35 per cent - for those aged 31 to 40. And 59 per cent of the age 21-30 cohort and 64 per cent of those aged 31-40 said they are prepared to give up guaranteed capital in exchange for high potential returns.
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