Does planning for your retirement early ease your anxiety about the future?

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Have you been worried about losing your job?

Have you been worried about when your next paycheck will come in?

Have you been worried about the rising cost of living and healthcare?

Have you been worried about both your physical and mental health?

Have you been constantly worried about not having enough money for retirement while managing your aging parents and young kids as a sandwich-class generation?

Don’t worry, you are definitely not alone.

All these anxieties are prevalent among us in this modern society which has been further magnified during this pandemic.

Consciously or sub-consciously, all the above questions will constantly be creeping in and before we realized, it will start to take a toll on our mental health unknowingly. The current pandemic definitely helps to re-shape our priorities, meaning, purpose, and also the way on how we manage our personal finance. Personally for myself, it has also provided me space to re-evaluate many things in life including strengthening my financial position during this pandemic.

Recently, HSBC Life conducted the ‘+Factor’ Study to gain insights into the physical, mental and financial well-being of over 10,000 people across Singapore, Hong Kong, mainland China and the UK. The purpose of the study was to gain insights into the relationship between our physical health, mental wellbeing and financial fitness and to understand how these core dimensions of wellbeing are interlinked.

Respondents were asked questions about their physical fitness, mental health and financial habits, what motivates them to take care of their wellbeing and what barriers they face, especially in the context of COVID-19. The survey also included questions on societal wellbeing to gauge how people give back to the community and society at large. The study sought to identify how, by connecting together the core dimensions of wellbeing, people can live life with the +Factor.

Below is a summary of the findings:

1 in 4 Singaporeans reported that this pandemic has taken a toll on both their mental and physical health.

1 in 3 are worried about the long term damage this pandemic has brought to them, especially in relation to the economy and our finances.

3 in 4 are worried about the medical bills and rising cost of healthcare in a world where the odds of another global health crisis is pretty high.

1 in 2 reported very poor mental health and their worries for having enough for retirement exacerbated.

The study also found out that there is a positive correlation between mental health and financial health. An individual who took active steps to strengthen one’s financial position does improve one’s psychological well being. While the pandemic has brought anxieties to everyone in all aspects, planning your retirement early does keep one confident about the future. Most people do not plan for their retirement early but doing it early in life does provide you a sense of control and a peace of mind towards your future.

As some of you might have read from recent posts that I recently made a mid-career switch to become a Financial Coach in the midst of the ongoing pandemic, I would like to share some simple tips to help keep your finances in place:

1. A habit of recording my expenses does provide me with confidence when I left my previous job with a regular payroll. It gives one with an overview of your spending habits, especially in relation to discretionary spending. Knowing this information allows you to scale up or down your expenses depending on your situation.

2. Keep your finances simplified by separating your protection plans from your investments so that you will not be forced to sell your investments during a market downturn and compromise on your protection.

3. After setting aside your emergency funds of at least 12 months depending on your life stage, do set aside at least 2 – 3 years’ worth of mortgage repayments. This is to help you cushion any major life events like a loss of job, career switch or even just to take a sabbatical from work.

4. Plan for your retirement early and be retirement ready. This gives you more assurance about your future and allows you to take more risk in life. Making a career switch with young kids was not an easy decision for me but as I have been planning this for years, it does gives me more confidence to pursue my passion.

5. Lastly, do a review with a trusted adviser who will make sure your current plan is solid and always have a backup plan in place just in case things do not go your way.

Do not underestimate the amount of mental relief you get if you plan for your retirement early. Once you get it sorted out early in life, you could start to live your life to the fullest while still feeling assured that a bright future is awaiting you. This is not a silver bullet that will end all your anxieties, but trust me its does allow you to sleep much better at night.

I am glad and fortunate that I have been able to make this transition to pursue my passion project which reinforce my life mission of advocating financial literacy. To be honest, it is not easy. But having said that, it isn’t entirely unachievable as well. In my new role as a financial coach, I have the opportunity to speak with many individuals from all walks of life and helping them with their financial planning. I have also seen first-hand the reticence towards financial planning, sometimes, the fear of getting into it, and the risks involve. Financial planning is not rocket science and shouldn’t be viewed as a mammoth task. With the right trusted advisor, the journey should be one that allows you to achieve your financial objectives, aligned with your life plans.

If you are interested to find out more, feel free to reach out to me at davidwu@fapl.sg for a cup of coffee at your convenience.

Would love to hear about how this pandemic shape your outlook towards life.

Does planning for your retirement early ease your anxiety about the future? — Engage

Important: The information and opinions in this article are for general information purposes only. They should not be relied on as professional financial advice. Readers should seek independent financial advice that is customised to their specific financial objectives, situations & needs. This advertisement or publication has not been reviewed by the Monetary Authority of Singapore.

Published By:

David Wu

With more than 20 years professional experience in various industry sectors, I had spent the last 10 years in banking and finance with a strong interest towards personal finance which led to my current role as an independent adviser and financial coach.

I strongly believe in cultivating a life-long relationships with clients and helping them to reach their financial goals and objectives through holistic financial planning. I am also actively involved in bringing financial literacy to individuals who are currently underrepresented through financial education and speaking engagements.

I am also the founder of a financial blog – Minimalist In The City (www.minimalistinthecity), which advocates minimalism and financial independence. The aim is to promote living a simple and meaningful life with less yet achieving financial success at the same time.

Outside of work, I am a family man who enjoys adventure and endurance sports and aspire to scale one of the seven summits Mt Kilimanjaro.

You may reach me via email davidwu@fapl.sg

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