3 questions to ask yourself if retirement age increases to 65

Whether you’ve recently started working or you’ve been in the workforce for some time, your retirement plan may soon require some adjustment as a potential increase in the compulsory retirement age from 60 to 65 years is currently being debated across Parliament.

The suggestion to the Senior Citizens Pensions (Amendment) Bill is being welcomed by several Ministers and senior economists who seek to “update and modernize the senior citizens pension scheme and to complement the proposed increase in the age of retirement from 60 to 65, giving our very knowledgeable and experienced senior citizens the opportunity to continue to contribute to our society.

While there are differing views on the amendment, one thing remains certain, whether the retirement age increases to 65 or you plan to retire at 50, a solid financial plan for retirement is critical to ensure the decades you spend beyond working are both comfortable and secure.

Whether or not you already have a retirement plan, here are three critical questions you need to ask yourself to effectively plan your golden years. 

1. Would my retirement income be sufficient?

Instead of, “At what age should I retire?”, you should now be focusing on “What will my monthly income be when I retire?”.

As the cost of living continues to increase, you would need to consider that you may require more money to cover expenses in the future. When you calculate the cost of bills, day-to-day living expenses including food, rent, entertainment, transport, and health costs against any income you may receive in your post-working years, you will gain a better idea of how much money you’d need to save for every year of retirement.

Because everyone’s circumstances are unique or if you are having challenges mapping out your financial future, you can explore building a flexible retirement plan with Republic Bank’s Wealth Management solutions. These are suitable for individuals who are serious about saving to enjoy peace of mind and financial security by receiving a healthy monthly income throughout their golden years.

2. How do I use time to my advantage?

When it comes to saving and investing, time is one of your greatest assets. An effective retirement strategy is built on the foundation of your current age and the compulsory retirement age.

An increase in the retirement age will give you more time to save toward your retirement goals. The more time on your side, the more you can benefit from compound interest. The great thing about compound interest is that it creates a “snowball effect”, where you not only earn interest on the amount you’ve invested, but you also earn interest on your investment returns as well. This causes your wealth to snowball or build at a faster rate.

With this in mind, additional time presents opportunities to capitalize on tax-advantaged retirement accounts that can earn you more returns, such as the Tax Incentive Savings Plan (TISP) and Equity Tax Incentive Savings Plan (ETISP). The more time you have to invest, the more you can put toward your retirement goals.

This time can also be used to your advantage, from extending mortgage payments or loan installments to having more savings for travel and entertainment.

Whether the retirement age increases to 65 or it remains at 60, our TISP offerings and other suite of investment products are flexible to work with any retirement age you desire. Remember, there is no time like the present, the more time spent saving, the greater financial stability you could have for decades of traveling and spending time with your loved ones.

3. How do I maintain my standard of living beyond retirement?

Have you ever thought about the quality of life you would have when you’re older?

One of the key considerations of retirement is not only determining how much you need to save but determining the best retirement portfolio that’s suited for your retirement goals.

For most people, your income at retirement is less than when you were employed. Therefore, it’s no surprise that retiring at age 60 or 65 without solid savings will decrease the standard of living you’ve grown accustomed to. Retiring without savings or without enough savings will decrease the quality of your lifestyle.

Being able to secure your standard of living means being flexible and open to updating your current retirement plan to address any changes from the changing market conditions to the potential change in the retirement age and, of course, changes to your retirement objectives.

The savings and investment opportunities available through Republic Bank’s Wealth Management products can afford you greater income during your retirement. Taking advantage of these products can help you maintain the standard of living you’ve worked all your life to achieve and the independence to take care of yourself beyond retirement.

Looking Forward

While the retirement age may be an ongoing debate, every citizen needs to create a flexible savings portfolio that would secure their future, maintain their unique lifestyle, and achieve their retirement goals.

Remember, retirement means you retire from work. You don’t retire from life. So, if you’re now thinking about retirement planning, or you’re updating your current plan, you don’t have to figure it out alone.

Our knowledgeable financial advisors are only a call away and they’re ready to help you develop a comprehensive plan that’s right for you no matter your age or income.

Together we can make the rest of your life the best of your life!