Securing your future
A Guide to Assessing Your Retirement Readiness with Syfe’s Retirement Calculator
Retirement might seem like a distant milestone, but it's never too early to start planning for your future. In fact, the earlier you begin, the more financially secure and stress-free your retirement years are likely to be.
Many people underestimate the amount they'll need for retirement, leading to financial strain in later years. This is why understanding and evaluating your retirement readiness is crucial.
The answer to this question depends very much on the lifestyle you want and can afford during retirement.
Knowing how much you need to retire starts with determining your retirement readiness. Below are some tips on how to calculate your retirement readiness, and with some planning, retirement may not seem as overwhelming as you think.
How to calculate your retirement readiness
The first step in assessing your retirement readiness is to establish when you plan to retire and estimate your life expectancy. While it's impossible to predict precisely how long you'll live, considering factors like family history and personal health can help you make an educated guess. This information will be essential in calculating how many years of retirement you'll need to finance.
Take a broad look at your current financial situation. This involves tallying up all your assets, including savings accounts, investments, real estate, and any other valuable possessions. Then, subtract your liabilities such as mortgage debt, car loans, and credit card balances. The resulting figure will be your net worth, a crucial indicator of your financial health.
You'll need a clear understanding of your anticipated expenses during retirement to have a more accurate estimation of your retirement readiness.
Consider factors like housing costs, healthcare, transportation, food, leisure activities, and any other significant expenses you foresee. Also, the cost of living tends to rise over time, so don't forget to account for inflation.
Compile a list of all potential income sources during retirement. This may include Social Security benefits, pensions, rental income, annuities, and income from investments. Singaporeans, for example, can expect to receive monthly lifelong CPF payouts anytime after they turn 65.
Be realistic and conservative in your estimates, as some income sources may fluctuate or be subject to change.
Once you've determined your expected expenses and income, compare the two figures. If your anticipated expenses surpass your projected income, you'll need to bridge the gap through additional savings or adjustments to your retirement plans.
Based on your assessment, establish an investment plan that aligns with your retirement goals. This may involve increasing contributions to your SRS accounts, exploring alternative investment options, or adjusting your retirement age to allow for more savings.
Assessing your retirement readiness is a crucial step towards securing a comfortable and stress-free future. The Syfe retirement calculator can help you assess your retirement readiness better.
By taking the time to calculate what is needed for your retirement early in life, you'll be better equipped to make informed financial decisions and enjoy your golden years to the fullest. Remember, it's never too early to start planning for your retirement, and the effort you invest now will pay off in the years to come.
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How can I improve my retirement readiness?
Apart from determining how much you need to retire, some other things you can do to boost your retirement readiness include building multiple income streams, making your money work harder by investing, and filling any gaps in your plan to ensure a smooth retirement.
When is it a good time for me to start retirement planning?
The best time to start planning for your retirement is now, and it is never too early or late to start. Giving yourself a head start allows you to maximize the benefits of compounding interest, making it easier for you to save.
How much do I need to retire?
The answer to this question is determined by your retirement readiness. The actual sum will differ according to one’s anticipated life expectancy and desired retirement lifestyle.
This calculator is designed to be an educational tool for your general information only and is not meant to provide investment advice. We make some assumptions when building the calculator, which you can read about above, and the results presented may not reflect the actual growth of your holdings. You should not rely on this calculator to make any decision and we are not responsible for any consequences of you choosing to do so. Speak to one of our wealth advisors if you need professional advice.
This is a tool to determine your financial gaps based on data you provided. We do not provide any recommendation or financial advice. The information, assumptions and simulation are obtained from sources believed to be reliable, but Syfe makes no representation or warranty as to its adequacy, completeness, accuracy or timeliness for any particular purpose. Syfe does not assume liability for any illustration provided here or for your reliance on these illustrations