The Ultimate Early Retirement Plan For Investors In Their 20s

Retiring early is a dream everyone wants to achieve — but it can be difficult to reach. While most Singaporeans know how to save and stick to a budget, there are also many individuals that are behind when it comes to saving enough for retirement. In fact, an online survey found that 60% of working adults are not sufficiently prepared for retirement and 69% felt that they would not be able to retire comfortably.

This finding must be an eye-opener for Singapore’s 20-somethings. If you are one of them, consider how you have entirety of your career still in front of you. As such, you have more than enough time to prepare for your (hopefully early) retirement. The following tips will help you do that.

Start as early as you can

The later you start, the less you’ll have post-retirement since you’ll be left with just a short time to grow your retirement fund. The solution is to start as early as you can — maybe even the moment you receive your first salary. This way, you will have a longer time to prepare for your retirement regardless of any unexpected situations like an emergency or economic problem that could set you back. That being said, make sure you don’t rely solely on your CPF savings. Chances are, they won’t meet your retirement needs. So, apart from starting early, you should also find different ways to grow your retirement fund.

Build a strong foundation

One retirement plan courtesy of financial planner Kelvin Ang is to get your foundation right. To do this, Ang recommends getting enough insurance “to cover medical bills, critical illness and similar exigencies.” Then, you must examine your living expenses, along with how you see yourself living post-retirement. In doing so, take note of a recent Lee Kuan Yew School of Public Policy study, where a single elderly person would need S$1,954 monthly just to meet basic needs. Consider, too, the possibility that you might live beyond 100, as over 1,200 Singaporeans have. In such case, you will need an even bigger retirement fund.

Earn more, save more

The secret to growing your retirement fund is to save more. The secret to saving more is to earn more. This could mean job hopping strategically, especially since changing jobs every 3 to 4 years can provide a 10–20% boost in income. That is significantly higher than the 3-6% increment you’d likely get by sticking with your current employer. Make sure that you are saving the extra that you are earning, so you can maximise your savings percentage. You can start small at first — 3 to 5% of your earnings, for example – and then increase that percentage to 10 to 20%, or higher, if you want to retire early.


If you want to further accelerate your retirement fund’s growth, you’ll need to generate passive income so you can earn even more. In this case, the stock market is a great place to start. Historically, stocks have yielded competitive returns that provided the highest long-term results for any asset class. Just as important, there are inexpensive ways to participate in the stock market. If you feel it is the right time to give investing a shot, consider starting with low-cost exchange traded funds (ETFs). Once you learn more about the stock market, you can then branch out to alternative investments.

Investments are a passive income, which is one of the best ways to build wealth without devoting too much time or effort to the process. Just remember to be cautious and careful, and not to overspend.

Make hard decisions regarding money

Lastly, all that saving and investing will be for naught if you don’t make hard decisions when it comes to money. In particular, you’ll have to make a conscious effort to cut back on your expenses so you can save and invest more. Unfortunately, that can be difficult to do, largely because you’ll have to sacrifice the comforts of the present.

But it is a necessary sacrifice, one whose impact is for the long term: your post-retirement life. So, venture out of your comfort zone now. Make that decision to spend less, invest some, and save more. Doing that, and the tips above, will help you retire early — and with enough funds to live your post-retirement life the way you want.

Written by Reese Jones for Syfe.

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