Planning for your retirement starts right after college

When you have just graduated from college, your predominant thoughts are about getting a job and starting to earning as soon as possible. Your priorities are limited to career goals, paying off your education loans, and enjoying your life to the fullest. But are you sure you’re not missing something? Ever thought about retirement planning? Well, for most of you, retirement planning is not a priority while you are in college or even right after graduation. And this comes as no surprise as most Singaporeans don’t think about retirement planning till the age of 45.

According to a report published in Channel News Asia, 1 in 3 Singaporean working adults is not planning for retirement. Most people state other financial and personal commitments like buying a home, getting married, and repaying loans to be the causes for neglecting retirement planning early on. But while you delay the process of saving for the future, you are losing out on the opportunity to save a lot more than you would if had started earlier.

The best time to begin with retirement planning is right after you graduate from college. Read on to know more about retirement planning for college students.

Why should you start retirement planning early on?

Before we get to explaining why you should start retirement planning early on, take a look at this example:

Tim has recently graduated and is about to join his first job. Out of the total salary of SG $3500, he saves SG $100 every month for retirement. This means annually he will save SG $1200. Considering the fact that Tim is just 25 years old, he has 40 years until he retires. The total amount he would have saved by the age of 65 would be SG $310,000 after adding the year-on-year compound interest. On the other hand, Judy starts saving the same amount for her retirement from the age of 30 till the age of 65. So, Judy gets 35 years to save whereas Tim who started earlier would get to reserve a lot more. At the time of retirement, Judy would have a saving of SG $206,000. You can see the staggering difference in the amount of savings for both Tim and Judy.

The bottom line is the later you start, you will have to save a higher amount to fulfill your retirement goals. And saving a small amount from early on is better than starting out late. In case of college, graduates, time is on their side and they should make the most of it.

How to estimate your expenses post-retirement?

There are many retirement planning calculators online that can help you estimate the exact amount you would need to save for your retirement. Some of the most popular options are:

The CPF Retirement calculator:

As per the Central Provident Fund website, the CPF Retirement Calculator is an interactive tool that helps you to determine if your retirement goal is achievable. It determines the amount of savings you need based on your desired retirement age and retirement lifestyle.

Retirement Income Calculator:

DIY Insurance, a popular website that compares all the insurance policies in Singapore, helps you decide on the right policy. This online portal also offers a retirement income calculator where you can find out if you have enough sources to fund your retirement lifestyle.

Companies like Standard Chartered and Aviva Life Insurance have calculators to help you estimate your retirement saving goal, too.

What are the ways to start retirement planning?

Now that you want to start saving for your retirement, how do you get started? There are three most common ways through which Singaporeans plan for their retirement. Let’s take a look at them one by one:

  1. Get an insurance policy or endowment plan:

    This is one of the most common approaches people take towards retirement planning. As a graduate, you can opt for a life insurance policy as it will cover for accidents, death, illnesses, and other unforeseen events in life. You can either opt for an endowment insurance policy or an investment-linked policy (ILPs).

  2. Invest in property:

    You can also consider investing in a property. Most Singaporeans either buy a flat and estimate based on its resale value or purchase a second house and rent it out. They then reserve the income they get from this second income for their retirement.

  3. Use your CPF Special account:

    Another way of saving a large sum for your retirement is by having a CPF account. Under this scheme, you get to save your income at your workplace itself. Every month when you get your salary, a certain amount will be deducted from your CPF account, and you will receive the remainder amount. This way, the process is automated and you need not worry about it. In fact, this is one of the best methods for colleges graduates who want to start with their retirement planning.

With some perseverance and willpower, it is not impossible to start retirement planning for college graduates.


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