Free From Work

Born free. Live free. Retire free. Die free.

This wouldn’t be a bad way to live our life here on earth whatever comes after.

Born free – that’s the area of politics. Thank God if you are born in a country where there is political freedom.

Live free – this again is the area of politics and your personal responsibility, as well as to stay free from the law. It is also an area of economics in that you want to be free from want. Living free is not necessarily as a hippie, but being able to do the things you like and enjoy the things you find meaningful. If you have a good-paying job or a profitable business, you would have the chance to stay free financially.

Retire free. This would be really nice. To retire from work, to have enough savings for a comfortable retirement, to be mentally and physically fit and free from illness, and above all, to be free to do the things you like but perhaps had little time for while working, and to spend time with the one you love – these would be “out of this world”. And in fact, it is out of this world and out of reach for many who do not realize that dreams generally don’t come true by themselves. Retirement years, far from being the best years, can be one’s worst nightmare. For the government, it is also a time bomb.

I was born free, have lived free thus far, and want to retire free, and one day die free.

Like most people on the verge of retirement, I am concerned about many issues, money included. As they say, money is not everything but everything is money. And the prospect of having another 30 years to live in retirement certainly spells money, and often money trouble.

I am more fortunate than many others because I’ve held good-paying jobs and have run a profitable business for many years. But even more fortunate, it is my business to plan for my clients’ retirement among other things, and thus I was forced to look into my own retirement planning. It did not come easily or naturally. There is a saying that the 30s think it is too early to plan for their retirement, the 40s think it is too hard to plan for their retirement, and the 50s think it is too late to plan for their retirement. For the majority of people, if statistics is something to go by, retirement planning was never in their screen, until it exploded on them.

For Singaporeans, the CPF which was instituted primarily for retirement is often the only savings accumulated for retirement. And even then, many will not have more than the minimum sum in their CPF at age 55.

Property bought with CPF money counts as an asset, but since a person has to live somewhere, the owner-occupied property is not always cashable for retirement.

Property is a large investment, especially for those living in cities where property prices are exorbitant. For example, the majority of Singaporeans would have almost their entire life savings in property. What is left for retirement for these people?

There are several social and demographic factors that make the retirement issue critical in Singapore.

One factor is the aging population brought about by a declining birth rate and a longer life span.

The typical retiree is looking at 20 years of retirement. A good percentage of retirees would live to 85. It is projected that many in the post-war generation can be expected to live beyond 100.

Demographic statistics in the USA show that the retirement age of 65 should now rightly be 75 based on the longer life span.

The second factor is the declining family size and increasing singlehood.

Children used to be the only means of support for their retired parents. With a family of four or more, parents can perhaps be assured of a roof and three square meals each day, and some pocket money to spend at the coffee shop and cinema occasionally.

The typical one-child or two-child family and growing adoption of changing values and ethos of the west no longer assures parents of lifelong support on children’s sponsorship.

Rising cost of living, especially in medical expenses, also makes growing old in Singapore a financial challenge. Yet another factor is that most parents are spending on, or hopefully, “investing” in their children, especially in education.

Many parents fork out thousands and thousands of dollars in overseas education for their children – often late into their working and retirement years as well.

Local education is affordable, but there are limited places in the local universities.

Such is the love of most parents that they are willing to extend their working life for the sake of their children.

To retire free from work is thus a worthy goal. It is not that working is a drudgery, which many make it out to be. As they say, some slog at their work in order to retire and then find they have nothing to do or to live for. It is that one must be financially free to choose whether to work and what work to do.

There are well-adjusted and highly motivated ones who don’t need to retire at all because “they retire every night”, and are fit and fresh the following day.

There are those who only need short breaks or work at their leisure and who retyre rather than retire.

But to retire free from having to work at a job which you dislike would be nice, and to do this you need to plan for your retirement. It will not come naturally or by just hoping for the best.

It will require working out your retirement goals like when to retire and how much you need each month.

It requires a regular savings plan for your nest egg, and to ensure nothing gets in the way, whether it is unexpected events like medical expenses or children’s education.

There are several important things to do which will free you from the financial worry. Good thing financial advice is freely available.