We always say retirement planning should take place as early as possible. You have foresight if you start planning in your 20s, it is good to start planning in your 30s, it is still not too late to start in your 40s, and better than never in your 50s. However, with only a decade more to retirement, is it too late to start retirement planning at 50s?


Tips from financial planners

Like Kit, parents always put their children first, and put themselves after their children. They only start planning for their later years when their children are in adulthood and achieve financial independence. By that time, they may find that they are just steps from entering retirement.

Assuming you intent to retire at 65 and only start planning at 50, you will have 15 years to work and save. Though not ideal, you still have enough, but dot take note of the following.

Is early retirement impractical?

While it is not impossible to save for a retirement that can last for more than 20 years that will come in 15 years, it may be a big struggle. Typically, it is not pragmatic to retire early as it will shorten the time to save but lengthen the time to spend.

Although it is possible to make up for lost time, the time to prepare for retirement is still short. We may need to make compromises, such as adjusting to a lower standard of living to stretch our finances.

Retirement funds come from accumulation

Your retirement funds do not appear instantly. If you are not used to saving up in the past, then you must make up for lost time left to earn and save. Set up a saving and investment plan and stick to it. Both planning and execution are important to realise your saving goals.

Some people, for example those who work in commission-based jobs may not have a steady flow of income. As such, it would be hard for them to stick to a proper savings plan. Such individuals can examine their income pattern over a period of time and calculate based on their lowest monthly average income as the baseline. After taking out general living expenses, a monthly saving and investment amount can be set.

Buying the right insurance

Insurance is an important protection for retirement life. No matter how old you are when you start making plans for retirement, you must include insurance, in particular, medical insurance, into your retirement plan to provide protection against future medical expenses.

As life insurance usually comes with a very long payment period, be prepared to make this long-term commitment. Surrendering or replacing your policy if you have a change of mind may result in financial losses.


29 March 2018