How Life Insurance Can Benefit Your Retirement Planning

How Life Insurance Can Benefit Your Retirement Planning

Retirement is a big topic that we all think about at some point in our lives. Whether it is to have financial independence with the absence of an income or to ensure a comfortable transition as you retire, you put yourself in the best situation by considering your options in advance.

The COVID-19 pandemic has, in fact, triggered many in Singapore to re-evaluate their attitude towards retirement and plan for the future earlier, according to a study by Fullerton Fund Management. With much uncertainty brought about by the recent pandemic, there’s a sense of urgency to think ahead to have peace of mind both physically and emotionally.

Yes, that means as soon as you begin your earnings journey – even as early as your twenties -, there’s no better time to prepare for retirement.

If you’re an expat planning to stay long-term in Singapore with your family, it is a good idea to start building a solid retirement plan and there are a couple of ways you can do so.

3 Ways to Fund Your Retirement Effectively

1. CPF

Probably the best part about living and working as an expat in Singapore is, it is a must for you and your employer to make monthly contributions to your Central Provident Fund (CPF) once you become a permanent resident.

As a comprehensive social security system that helps you save on your behalf, CPF is a pool of funds that will gradually grow over time and is essentially a safety net for your retirement years.

At this point, you may be wondering “when can I start using my CPF savings then?”. With a Minimum Sum set aside in your Retirement Account, you are able to withdraw the money from the age of 55 onwards. Your CPF savings will also come in handy for a number of things in the course of life. This includes your retirement, housing and healthcare needs.

However, in the event where you are permanently incapacitated or leaving Singapore or West Malaysia with no intention of returning, you will be able to take out your CPF savings in advance.

2. Investments

When it comes to maximising your source of income, many would also consider investments a useful retirement savings tool where you get to yield high potential returns. If you’re new to investing, you can start with small amounts of money with lower risk levels and build your overall portfolio from there.

It is, however, crucial to anticipate potential losses in your investments. Thus, investing at an early stage is more ideal when it comes to putting your money in high-risk investment avenues. It can otherwise put you in a risky situation if you’re making investments at a later stage in life

3. Life Insurance

Finally, it is equally, if not more, important to have a good life insurance plan so you won’t have to rely on your savings alone. Even with CPF and investments, you could risk outliving your retirement funds and inflict a huge burden on your loved ones as a result. In fact, a new Manulife survey revealed 1 in 2 indicated the need to supplement their Central Provident Fund (CPF) savings with other sources of income. It is also a reality that 1 in 4 retirees are not confident they will be able to live out the rest of their lives comfortably based on their current savings.

To secure your future and your family, life insurance is a must-have for the best financial protection possible. Life insurance may be more commonly known to provide long-term stability for your family in the event of your demise. But did you know that with add-ons such as Critical Illness Cover and Total Permanent Disability Insurance, your life insurance can be a much-needed relief in times of financial difficulty?

To get your entire family through any tough times, a comprehensive policy can assure you’ll continue living as comfortably as possible with your medical bills taken care of.

Get Started on Your Retirement Planning Journey

Here at Expat Insurance, our life insurance plans allow you the flexibility of choosing the term duration and amount of coverage to tailor to your changing needs. Throughout your stay in Singapore, life insurance premiums are paid monthly or annually, in return for a guaranteed lump sum payout in the event that death or terminal illness occurs within the contract term.

Should you move to another country in the near future, your expat-based term life insurance will still apply in your following overseas posting.

To get you all set for your golden years, it’s a hassle-free process to take out a life insurance policy with Expat Insurance. Contact us today for more information.

Authored By John Ntatsopoulos

CEO

Over the course of his 34 years career, our CEO, John, have worked predominately in the area of insurance and financial services across major APAC…

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