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What can go wrong in your retirement planning!

Recently, I visited a friend of mine M who had suffered a mild stroke 2 months ago. He had just turned 48... yes age of 48 only.

I had a lot to share with him as I'm familiar with stroke as a medical condition.

Besides rehabilitation, he mentioned about retirement plans and it really got me thinking as well.

My concept of retirement is to have multiple assets.

Don't depend on one income stream.

But to build them takes years and years.... and in this journey for all of us, some encounter hiccups. 

1) What if you have some illness or injury?

Currently, M is undergoing physiotherapy to enhance control of his left arm again.

He works for a uniform group and in his occupation, physical fitness is a necessity.

It is clear that this stroke condition is going to be a severe disadvantage to his career prospects.

It is even likely that he will have to retire early or take a career switch to something that is less physically demanding.

Severe injuries due to accidents can also halt your career.

If you are in a jet-setting job or an occupation that requires you to drive extensively, it may become impossible to remain functional in your work anymore.

Do not assume that you will be healthy to have a full working career ahead.

 

2) What if you have a family member that is bed-ridden?

Supporting an ill/disabled family member can drain your savings

PM Lee mentioned in the recent National Day Rally that according to statistics, one in every two persons will have long-term illnesses and will not be able to look after themselves.

This is an alarmingly high percentage!

That means a 50% chance that a family member of yours will need help from you.

You may hire a maid to be a caregiver (which has its own set of problems) or you may leave work to become a full time caregiver.

In either case, it will drain your own finances and impact your retirement plans.

Insure for your family members adequately to minimise the financial impact to you.

 

3) What happens when child's financial spending comes before your own retirement saving

The best story is non other than:

sacrifices that Joseph Schooling's parents made to help him achieve his Olympic gold.

What dawned on me, after reading the interviews, was the extent his parents had to commit financially to give him the best swimming education.

It is reported that they may have spent more than $1m on his training thus far. As a consequence, they had to downgrade their home.

To be in the USA with him frequently, it must have required them to make career sacrifices also.

Imagine now that your child has a passion and talent that he or she would like to pursue. It will be tough to decide how to allocate family finances.

If you make the same sacrifices, it will impact your own retirement planning.

Start saving up early

The video above by NTUC Income is nice tear jerker...

So start saving up as early as possible because the journey ahead to save up is riddled with potential obstacles.

It's absolutely possible for anyone to depend on him or herself for retirement funding.

In conclusion, retirement planning is MORE THAN just getting investment returns.

It is also about insuring yourself and your family members adequately while making tough choices to set aside savings for the future.

Last updated on October 2nd, 2018 at 06:03 pm

Josh Tan Jian Liang (CHFC) Principal Author

REVIEWS: https://theastuteparent.com/josh-tan Practising financial planner with Promiseland Independent Pte Ltd. EXPERIENCE: More than 13years. Josh Tan is a young parent, speaker, author and founder of TheAstuteParent.

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