Let's address the elephant in the room — ageing gets a pretty bad rep. Many people tend to think of it as a negative experience and retirement as an impossible dream.
But there really is no better time to rediscover the lifelong joy of learning. Your golden years, are a time for learning the things you actually want to learn. You can do it on your own time and at your own pace, with no pressure to achieve a perfect grade. Plus, learning new things keeps you relevant and your mind stimulated.
When you learn the right things, a happy retirement is possible — here are three things you can learn to live purposefully once you hit your 50s:
1. Learn a new skill
Forget chemistry and algebra — this is a great time to pick up a hobby you're genuinely interested in but never really had the time for during your working life. That means you can finally pursue photography or try out recipes in that long neglected cookbook.
Are you someone who relishes a good challenge instead? Then learn a skill that helps you stay relevant! You could take computer or language classes, for one. Who knows, your newly acquired skills might just bring in some extra income for you. Tip: check out the list of courses you can pay for with SkillsFuture, a government scheme that gives you credits to upgrade your skills.
2. Learn to make money (without working)
Speaking of extra money, it is possible to give your golden years a nice boost of financial power with a stream of income! After decades of working 9 – 5, you may wish to pass on office jobs in favour of passive sources of income to supplement your retirement savings. For example, if you own property, you can explore earning some money by renting a part of it to others.
You can also look to invest your money with different financial tools. The Singapore Savings Bonds is a flexible, low-cost and fully government-backed investment option that may be worth exploring. For those who are not interested in the stock market, you can consider investing in an online business as a silent partner. This frees you of the time needed to run operations, while giving you potentially substantial passive income if the company performs well. When it comes to investments, it is always good to do proper research and seek advice from trusted experts, so that you are able to make informed decisions and secure your savings.
3. Learn to plan ahead
Planning seems like a basic task anyone can do, but it's often harder than we think. This is especially so with our finances, as it requires a lot of foresight and discipline. Between ages 55 to 65, you are in a critical window to build up your retirement nest egg, and planning to secure your financial future is important.
This is where CPF LIFE comes in handy. It is essentially a scheme that ensures you have a steady stream of income for the rest of your life. Between age 65 and age 70, you can choose to start receiving your monthly payouts after selecting your CPF LIFE plan. Here are the options available:
Your CPF LIFE monthly payouts would depend on the savings you have in your Retirement Account (RA). For example, if you have the Basic Retirement Sum (BRS) in your RA, which is $83,000 in 2017, you will receive about $700 - $750 in monthly payouts. If you want to have higher payouts, you can save more in your RA, up to the Enhanced Retirement Sum (ERS), which is $249,000 in 2017. With the ERS, you can enjoy $1,860 – $2,000 in monthly payouts.
If you wish to receive higher CPF LIFE payouts, you should plan ahead and start by saving more in your Special Account (if you are age below 55) or RA (if you are age 55 and above). With the Retirement Sum Topping-Up Scheme (RSTU), you can make a cash top-up to your SA or RA, or transfer savings from your Ordinary Account to your SA or RA. Your top-up monies will grow your retirement savings, and be used to join CPF LIFE to provide you with lifelong monthly payouts from age 65^. You can read more about RSTU here.
Alternatively, you can leave your savings untouched at age 55 to earn attractive interest in your CPF accounts. Your CPF accounts currently earn up to 5% interest per year*. Members above age 55 can earn up to 6% interest per year#. Find out more here:
For effective planning, you may want to first establish your desired retirement lifestyle. Try envisioning what you want to do during your golden years and how much it'll cost — for example, travelling and pursuing a hobby comes with greater expenses than simply spending quality time with family. From that, you can figure out how much you'll need to sustain that lifestyle, and therefore, how much CPF LIFE payouts. Once you have a figure in mind, you can start planning the steps needed to reach that financial goal.
We never stop learning in life, so make every single lesson count towards a smooth-sailing retirement. You're never too old to learn, and never too young to start thinking about your future!
*Currently, your CPF savings in the Ordinary Account earn a guaranteed interest rate of 2.5% per year, while savings in the Special, Medisave, and Retirement Accounts earn interest rates of 4% per year. The first $60,000 of your combined CPF balances, of which up to $20,000 from your Ordinary Account, earns an extra 1% interest per year. Combined balances refer to the total balances in your Ordinary, Special, Medisave and Retirement Accounts, including the annuity premiums for CPF LIFE less any payouts made.
#To grow your retirement savings faster, an additional extra interest of 1% per year will be given on the first $30,000 of your CPF balances (for members aged 55 and above) to enhance the retirement savings of CPF members. This is on top of the existing 1% extra interest on the first $60,000 of combined CPF balances.
^For those born in or after 1954. Payout eligibility age of older cohorts can be found here.