How Long Will Your Retirement Savings Last? (2016 Update)

How long will your retirement savings last?
How long will your retirement savings last?

How Long Will Your Retirement Savings Last?

There is an old saying that states “old age gives no notice.”. It is, therefore, essential that you start preparing for your retirement as early as possible. A common question among most people, especially the older folk is, how long will my retirement fund last? Since they have been around for long enough to experience the ravages of inflation, technology, and health issues and know that without careful planning, they may outlive their retirement savings.

Let us look at the canons of retirement planning and how to plan your post retirement lifestyle. This is to ensure you live comfortably without severely depleting your fund.

The First Canon of Retirement Planning is, Start Early.

When you start saving for your retirement early, you will benefit from the effects of compounding for a longer time. Albert Einstein summed it up when he said compound interest is the eighth wonder of the world.

Time

Time is the most important element when compounding. The value of the regular deposits you make also contributes significantly to the eventual sum of your fund. Therefore, the longer you have to save, the larger your savings corpus will be.

Inflation

Now that you know how important it is to start saving early, consider the next critical canon, inflation. Consider the price of an Apple, what it was five years ago and compare it with the price now. Commodities such as food, healthcare, as well as services become more expensive with each passing year. What ten dollars can get you today will not be the same as the next two decades. This knowledge helps you negotiate for favorable interest rates on your deposits and plan how fast your retirement fund needs to grow.

Consider Vital Expenditure

When we grow older, we become more vulnerable to illnesses, unlike our younger years. Older people struggle with critical diseases such as cancer and hypertension thus the cost of medical care is very vital to a retiring person. To make your retirement life more comfortable, consider purchasing health insurance at a younger age. As you grow older, you will have an established relationship with an insurance company, and your premiums will be lower. This will help keep your retirement fund intact as the insurance will cover most of your medical bills.

Other important costs to consider after retirement include debts such as home loans, costs of dependents such as education and holiday costs.

Life Expectancy

One of the most overlooked and perhaps the most important aspect of retirement planning is your life expectancy. With improved diets and healthcare you most certainly don’t expect to live any less than 80 years for men and 84 years for women. This is the official life expectancy in Singapore, and you should plan your retirement with this in mind.

Here’s the bottom line, stop guessing how long your retirement fund will last. Start saving early, factor in inflation in your calculations and the life expectancy to ensure you don’t outlive your saving. Finally make special arrangements for vital expenditure such as healthcare and settling of your debts.


Always think of ways that your money can help you to generate more money. If you are currently in debt with many lenders, consider getting a debt consolidation loan to help you manage your finances. We have the lowest interest rates you can find among moneylenders in Singapore. Contact us today if you’re interested in getting a loan 🙂

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