Financial tips for someone aged between 60-70

1. Central Provident Fund (CPF) Optimization:

• CPF LIFE:

  • Ensure you understand how CPF LIFE works and how it can provide a reliable stream of income. Consider different CPF LIFE plans to match your needs.

  • Evaluate if topping up your CPF Retirement Account (RA) to the Enhanced Retirement Sum (ERS) is beneficial for increased monthly payouts.   

• CPF Withdrawals:

  • Understand the rules regarding CPF withdrawals and how they interact with your overall retirement income.

  • If continuing to work, understand how CPF contributions continue to affect your accounts.

• CPF investment scheme (CPFIS):

  • If you have a higher risk tolerance, and investment experience, the CPFIS can be considered, but with great caution at this age. Any investments should be very low risk.

2. Retirement Income Planning:

• Assess Income Needs:

  • Calculate your estimated monthly expenses in retirement, including housing, healthcare, food, and lifestyle costs.   

  • Factor in inflation, as the cost of living will likely increase over time.   

• Diversify Income Sources:

  • Don't rely solely on CPF payouts. Explore other income sources like:

    • Part-time work or consultancy.

    • Rental income from property.

    • Dividend-paying stocks or bonds (with a conservative approach).

• Consider Annuities:

  • Annuities can provide a guaranteed income stream, reducing the risk of outliving your savings.   

3. Healthcare Planning:

• MediShield Life and MediSave:

  • Understand the coverage provided by MediShield Life and how MediSave can be used for healthcare expenses.

  • Consider supplemental health insurance to cover potential gaps in coverage.

• Long-Term Care:

  • Plan for potential long-term care needs, as healthcare costs can be significant in later years.   

  • Look into long-term care insurance options.

• Healthier SG:

  • Participate in the Healthier SG program to proactively manage your health, and potentially reduce future healthcare costs.

4. Estate Planning:

• Will and Lasting Power of Attorney (LPA):

  • Create a will to ensure your assets are distributed according to your wishes.

  • Establish an LPA to appoint someone to make decisions on your behalf if you become mentally incapacitated.

• CPF Nominations:

  • Ensure your CPF nominations are up to date to designate your beneficiaries.

5. Property Considerations:

• Downsizing:

  • Consider downsizing your property to free up capital and reduce maintenance costs.

• Lease Buyback Scheme:

  • If you own an HDB flat, explore the Lease Buyback Scheme to generate retirement income.   

Important Considerations:

• Professional Advice:

  • Consult with a qualified financial advisor in Singapore who specializes in retirement planning.

  • Seek advice from reputable sources like the Monetary Authority of Singapore (MAS) and MoneySense.

• Risk Management:

  • As you age, prioritize capital preservation over high-risk investments.

  • Review your investment portfolio regularly and adjust it based on your risk tolerance and changing needs.

• Staying Active:

  • Maintain a healthy lifestyle through regular exercise and a balanced diet. This can help reduce healthcare costs and improve overall well-being.

By carefully considering these factors, individuals aged 60-70 in Singapore can create a solid financial plan for a comfortable and secure retirement.