Turning 40 and No Savings? What Can One Do in Singapore?

As someone who cares about retiring comfortably, it worries me when friends aren’t prepared as they should be. Many haven’t started to think about it, they either hope it’s enough or really don’t bother. 

What do I mean by starting? 

I just had a conversation with a close friend. He is single, 40 this year and only asset is funds accumulated in his cpf over the years. When I causally chatted with him about retirement and how much he needs and if he has started tracking expense and monitor savings rate, the conclusion I got was he isn’t ready and haven’t given it much thought. 
The plan is “Hope for a comfortable retirement”

Is he really oblivious to retirement planning? 

Dont get me wrong, he did take some initiative like having a monthly saving plan via an insurance policy which locks him in for x yrs before allowed to withdraw his funds. It’s good if he’s comfortable with the plan. But I can sense that he is looking for more and knows there is more options and opportunity to hasten being financially free. 

But something seems to be stopping him. What it is, I’m not 100% sure but I speculate that it’s a combination of feeling not in control, limited earning power and not knowing how to do it which results in believing that it’s not possible to ever take control of his finances, therefore resulting in no actions. 

How should he start, steps to retirement planning even at 40 in Singapore? 

Here’s how I would do it in his shoes. 

  1. Know what I spend and make – pull out the spreadsheet, input your expense and income items that you know, subtotal it and take (what you make – what you spend), ideally you want to see a positive number. If it’s negative, it’s not end of the world but it’s important to start addressing the issue fast.
  2. Track monthly spend – From the above list, review and cut down on non essentials.  Next start tracking what you spend daily. This can be tedious and hard, but there are tools that can help. I use a tool called Money Control to help me keep track of everything even to the Kopi-o cost (0.90).
  3. Review Spending – After tracking for a month or so, review your spending. Using the Money Control app, I could download a CSV and pivot it to deep dive on what are essential and non essential spends. Tip: You don’t have to cut all at once, just do it slowly to reduce the impact. 
  4. Start Saving – Assume my friend hasn’t save any amount of money, I would start saving, a small amount initially, the key is having small wins. $50 or $100 per month. I will set a small goal $1000 or $2000 of cash fund. Tip: This can varies from situation to situation so look at your income and spend, then set a savings rate for yourself. 
  5. Seek Additional Income Source – These days there are many options to make additional money, ranging from being a Grab driver, Grab Hitch, Grab Food, Tuition, Selling on Carousell, 2nd part time job, etc. So I would then look at my skill sets and have a 2nd side hustle. 
  6. Stock Investment – Once I have saved up around 2,000 to 3,000, I would setup a custodian stock trading account either via Interactive Brokers for US stocks or SCB for local Singapore stocks. Then lets start trading, start something small, ETFs would be a good bet. 
  7. Repeat – Now with this system in place, I would continue with life, repeat and revisit in 6-12 months. This should set the ball rolling.  

Tip: Find a support group to help motivate you during the journey. 
I’ve shared the plan with my friend, now lets see if it works out for him. 

Image source: Pixabay

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