This article is a continuation of How My Parents' Generation Saved For A Comfortable Retirement.
Retirement planning is one of my favourite subjects in financial planning. It helps people to make decisions which enable them to lead their ideal life after around 40 years of hard-work. One recurring observation I've had about retirement planning is how people tend to tell me that they see themselves spending lesser. Personally for me, I find this difficult to relate because I've a retired mother at home who is spending more yearly after she retired.
Meaningful work post retirement is hard to find
My mom was forced to retire at 62 because her company chose not to extend her employment. Initially, the panic of going from regular income to no active income led her to try all sorts of part-time work which she eventually gave up because as kids we didn't allow her to do any physically labourous work and she really hated the telemarketing job she got stuck in. The reality is this, even though my mom is English educated and did admin work for over 40 years, most of the available work options for retirees are physically labourous. Cleaner, promoter, airport security (think Coronavirus), McDonalds, packer, factory worker, etc...
In today's context where most Singaporeans have a fairly decent education, most of us may think we can find meaningful work beyond our retirement age. In my view, technology will displace a considerable number of 'qualified' workers during their retirement or earlier. Unless you hold a profession that requires specialized knowledge, banking on a degree or diploma to protect you is being optimistic.
Having a life post retirement involves spending money
So my mom tried to live everyone's ideal life of not working for good. Initially, still adjusting from salaried life to a life with no active income, she tried to maintain a balance between staying home and going out for activities. I can tell you, it was merely months when she almost ended up working in McDonalds out of boredom. This idea got vetoed because my brother and I were contributing to the household and we're generally against her doing any jobs that involve heavy lifting, long hours of standing or anything that might expose her to health risks.
Eventually, she adjusted to her new retired life and found a manageable way to enjoy her retirement. Her routine is as follows:
1) Go for regular exercise at community centres (while the classes are free, exercise gears cost money depending on which exercise activity you choose to join)
2) Go volunteering at some elderly center (volunteers contribute to the regular potluck sessions for these elderly, cost varies depending on what food you contribute)
3) Have breakfast/lunch/dinner/shopping sessions with friends either in Singapore or JB (cost varies again depending on what is consumed)
4) Line Dancing (So apparently there's a special line dancing shoes that you need to buy)
5) Travelling (given that my mom isn't technology savvy, she usually travels on tour and each tour range between $5,000 - $20,000)
Judging from her routine, I've no idea why anyone thinks they will spend lesser during retirement.
Myth: Simpletons will not spend a lot during retirement
Really? If you read the earlier article How My Parents' Generation Saved For A Comfortable Retirement, you will realise my mom is fairly thrifty. We didn't travel much during my growing up years. The furthest she's been before retirement is probably Hong Kong. She worked 7 days a week. There's hardly time to spend money and honestly, I'm very grateful I've got a low maintenance mother who is happy even if I brought her to the food court to eat.
Retirement is at the end stage of your life cycle, why wouldn't you want to pamper yourself and get some life experiences that is beyond your usual 9-5 job? For my mom, she wanted to see the world. While she can still walk, she wants to go to as many places as she could. In my view, she deserves to see the world. She worked very hard and saved very hard for 40 years. If she doesn't reward herself now, then when?
Good retirement planning can reward you with a comfortable life when you stop working
My mom takes an average of 2 long trips and a few short trips (Malaysia) per year post retirement.
Here're some places good retirement planning have brought her:
Italy (2017)
Iceland (2018)
Jordan (2018)
Morocco (2019)
The photos are taken by her or members of her tour group. I assure you, you can't get the exact same images on google unless the tour group uploaded them.
What's My Point for Telling You this?
I've come to realise that a lot of people tend to see such retirement goals as impossible or so far fetched they don't bother trying. Many people seem resigned to leading a lesser lifestyle after they retire. Whenever I ask clients if they wish to maintain, reduce or improve their lifestyle during retirement, almost all never choose to improve their lifestyles. All of us started life filled with optimism and dreams, why do some of us end our lives filled with compromise and misery? I hope that this article showing that a regular wage worker with kids can enjoy a comfortable retirement will inspire some optimism. My own conviction that prudent financial planning can change lives was also derived from witnessing the entire wealth accumulation process first hand.
If you would like to get started on saving for retirement, please speak to a trusted advisor. You can drop me a message if you would like me to help you with your retirement planning.
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Disclaimer: The content created are based on my personal opinions and may not be representative to everyone or any organisation. If you have any doubts or queries pertaining to insurance or investment, please seek professional advice from a trusted adviser in an official setting. You may also reach out to me if you do not have a present adviser using the message box under 'Let's Talk'.
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