3 questions to ask yourself before you retire

02 Mar 2017 

Are you nearing your 60th birthday and looking forward to your retirement? If that sounds like you, chances are you've been working hard over the past decades to reach your financial goals.


Well, it's now almost time for you to reap the rewards of all that hard work. Now all you have to do is to ask yourself these three questions to see if you're ready to focus on the final steps to bring you to a fulfilling retirement!


Are you owning assets or liabilities? 

This is a good place to start when it comes to your retirement. Typically, the more assets you own, the better prepared you will be when you no longer draw a monthly income from work and start tapping into your retirement nest egg.


Many Singaporeans consider their home to be an asset, and servicing a housing loan is a process that usually takes at least a decade. CPF allows you to continue financing your housing loans using your Ordinary Account (OA) savings even after you turn 55. This way, you need not worry about not being able to meet your loan payments as long as you still have savings in your OA.


However, it is crucial to note that your CPF savings are going towards meeting your loans rather than earning interest for your retirement.


There are other ways of getting an income from your house, by looking at your flat as an asset, as well as a source of rental and retirement income. These can be done by subletting, downsizing or taking up the Lease Buyback Scheme.


Read also: How can home owners use their asset to generate wealth after retirement?


Are you (and your finances) in good health? 

As you age, you might experience a higher likelihood of experiencing age-related healthcare issues, which will in turn increase your healthcare expenditure. At this stage of your life, consider if you have adequate healthcare coverage that will help you keep both your health and your finances in good shape.


MediShield Life provides basic, universal coverage for all Singaporeans, including those with pre-existing conditions. This protects you against large hospital bills and selected costly outpatient treatments, essentially providing a stable foundation to cover your basic healthcare needs.


In addition, if you have taken up an Integrated Shield Plan, you will be able to benefit from additional healthcare coverage depending on your own budget and preferences.

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You would also have been automatically enrolled in ElderShield at the age of 40, unless you have opted out of the scheme.


ElderShield is a severe disability insurance plan for all Singaporeans. It provides basic financial protection to those who need long-term care, especially in old age. Even though the plan is not compulsory – you may choose to opt out anytime – it is worth looking at the pros and cons of keeping it.

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Are you making the most of your active years? 

Before you enter your golden years, consider if you still have the opportunity to "make hay while the sun shines".


That's not to say you need to work for as long as you can – but rather, it is the last opportunity for you to save as much as possible.


If you are working past the age of 55, you will continue to make monthly CPF contributions, thus growing your savings in the various CPF accounts.


In addition to that, you can also consider channeling more of your income towards your CPF through the Retirement Sum Topping Up Scheme (RSTU). Not only will this offer immediate benefit in the form of tax relief* (, but you will also be growing your retirement savings at the same time. The higher your retirement savings, the higher your monthly CPF LIFE payouts.

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If you are married and post-55, you may also consider making a spousal transfer of some of your CPF Retirement Account (RA) savings to help your partner boost their retirement savings**. Together, you will both see your individual retirement savings grow steadily with compound interest over time.


The last stretch before you enter your 60s 

Now that you're almost nearing your 60s, it's time to take stock and get ready to reap the rewards of your labour! If you've been working hard for the past few decades, asking yourself the questions above – and taking appropriate action based on your own personal answers – will help lead you smoothly into the next stage of your life.


Writer's Profile: Jonathan Lim is a writer who loves taking showers – because that's when the best ideas strike! Showers and deadlines aside, most days are filled with copious amounts of black coffee and gym sessions.  


^Loved ones refer to spouse, siblings, parents, parents-in-law, grandparents and grandparents-in-law.
*Up to $7,000 per calendar year. Cash top-ups beyond the current Full Retirement Sum will not be eligible for tax relief. Do note that the overall personal income tax relief cap of $80,000 applies for cash top-ups to CPF accounts.
**Subject to terms and conditions.

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