Working mums and their post-retirement lifestyle: Only a dream?

AIA Singapore shares some things to consider to achieve your retirement dream.

It’s not easy being a working mum. Work, kids and ageing parents seem to demand all of our attention right now, there’s hardly any time to think about ourselves and our future. In fact, 75% women have not started planning for retirement and only 25% thinks she will have sufficient funds to lead her ideal retirement lifestyle, found the recent Singaporean Mums Retirement Aspiration Study 2015 conducted by AIA Singapore in conjunction with theAsianparent.com.

But with longer life expectancy and greater likelihood to take career breaks to care for our children, as well as the shrinking families in Singapore, it is especially important for women to start planning early for financial adequacy in their golden years. Here are three steps to help you achieve your retirement dream:

Step 1: Identify your retirement goals
Use an online financial calculator to work out how much money you will need to set aside to lead your desired retirement lifestyle. Here, it is important to be realistic. 69% of mums believe they will need less than S$3,000 and 38% believe that they will need less than S$2,000 to cover monthly expenses after they retire. However, average household expenditure for Singaporeans is S$4,7242.

Step 2: Assess your current situation
Engage your financial adviser, who will be able to help assess your current financials, such as how much you can expect from your savings account, CPF savings, insurance policies and investments when you retire. During this assessment, it is key to include any outstanding loans and liabilities before retirement, and minimise debt obligations during your golden years.
Also, do include the amount you need to set aside for your dependents, such as your children’s education and protection needs.

Step 3: Get started on your retirement savings plan
Once your financial assessment has been completed, your financial adviser will be able to advise on suitable insurance and financial plans that can help you achieve your financial goals, while keeping your available budget in mind.

3 things to consider

First, consider Central Provident Fund (CPF) Life and insurance plans to complement each other. CPF Life provides a lifelong monthly payout starting from your payout eligibility age. Singaporeans can expect to receive S$650-S$1,900 per month from their CPF Life payouts, based on the 2015 Proposed CPF Retirement Sum Changes.
However, based on the working mums’ expected retirement income of less than S$3,000 per month, this still works out to an income gap of about S$1,100-S$2,350 per month. Singaporean women may want to consider supplementing their retirement income with insurance plans that can help to meet their retirement needs.

The enhanced AIA Retirement Saver (II) is suitable for those who are looking for stable returns and are looking for a plan that provides them with a guaranteed monthly stream of retirement income to complement their CPF Life payouts during their retirement years.

Those with a higher risk appetite may want to consider investment-linked plans (ILPs) which combines the benefits of investment and protection. Investments to ILP Funds can over a long time help you to potentially accumulate more for your nest eggs.

Second, ensure that you have adequate medical insurance coverage. According to the survey, the top 3 retirement expenses that concern mums are healthcare expenses, living in poor health and unexpected emergencies.

At the same time, only 10% of mums say that they will have the means to pay for a post-cancer-diagnosis lifestyle without having to dig into their retirement savings. 50% say they will make use of their retirement savings and 40% do not know what they will do should they be diagnosed with cancer.

There are options available for mums to ensure that their insurance policies’ payouts finance their medical bills in the event of any unforeseen circumstances, such as the diagnosis of a critical illness, without them having to use their retirement savings and throw their retirement plans off track.

For example, the enhanced AIA Retirement Saver (II) offers the option to add the Cancer Relief Income Rider, which pays an income upon a major cancer diagnosis. This additional income stream can defray medical treatment costs or cover some of your basic retirement plans’ premiums.

Lastly, ensure that you are adequately covered in the three main categories of basic insurance needs. As with most other important things in life, balance is key. Get adequately protected in the three main categories of basic insurance: hospitalisation, critical illness and disability, to ensure that your retirement plan remains on track should the unexpected happen.

Conclusion

What is your dream retirement lifestyle? Some want to spend time with family (77%), some want to travel the world (72%), some want to pursue new interests/hobbies (57%), some want more ‘me’ time (52%).Whichever lifestyle you dream of, take charge and start planning today. Because we all deserve to be able to enjoy our golden years the way we want to.