Brought to you by Citibank Singapore Limited

The coronavirus pandemic may have put a squeeze on retirement hopes for some, but for many, it has also underscored the importance of preparing early for one's golden years - especially because there are unforeseen events that can throw a wrench in the works.

Starting out early was one key tenet raised by speakers at a panel discussion titled Growing Wealth Towards Retirement In The New Normal on Thursday last week, live-streamed from the Citi Wealth Hub.

Co-organised by Citibank and AIA, the session featured Citi Singapore's bancassurance head Derrick Khoo, media personality Diana Ser, as well as entrepreneur chef Pang Kok Keong. It was moderated by Ms Genevieve Cua, wealth editor at The Business Times.

START PLANNING EARLY

Planning for retirement is a practice that has always been on her radar, said Ms Ser, who envisions retirement as a season when she can pursue the things she has always wanted to do, but never had the time for because of her children and work.

"Last year, when Covid-19 first started to hit, I really felt it because a lot of my work involves very large groups. So I saw that disappear. My sources of income were limited as well. (So) I am glad that I started planning for retirement early," she said.

She added that the time value of money - the concept that the money one has now will be worth more than an identical sum in the future because of its potential earning power - also means that the earlier one starts saving up, the better position one will be in, in the long run.

Mr Khoo said he is using insurance and investment tools to achieve his retirement goals. As a financial adviser himself, he advocates getting coverage for critical illness. "What worries me, as far as retirement is concerned, is what happens if I need to be hospitalised for a prolonged period. And it doesn't stop there - we also have to look at post-hospitalisation, long-term care.

"Personally, I am less concerned if I die today. The question is if I don't die and I live on. In many aspects, it will be mentally quite draining for family members. And the financial aspect is another (source of strain) - but that is something that you can plan for."

Calling insurance a "risk transfer mechanism", Mr Khoo said that while we can never eliminate the risks of sickness and premature death, these risks can be partially transferred to an insurance company.

Younger individuals in the pink of health are often less concerned with acquiring such protection, but they are actually in the best position to do so. "A lot of people think that I am young, nothing will happen to me. But it's always (best) to do it when you are young and when you are healthy. The reason is because when the time comes and you decide you want to buy, when you want to transfer the risk, no one wants to accept the risk," Mr Khoo said.

A poll conducted among webinar viewers showed that over half of the respondents, or 55.2 per cent, said they have a retirement plan in place and expect to meet or exceed their financial goals upon retirement.

About 35.8 per cent said they have a plan in place, but worry about not meeting their financial goals upon retirement. Nine per cent said they do not yet have a plan in place, but plan to set up one soon.

On what "retirement" means to them, about 30 per cent of respondents said it means "not having to work for money, but for passion or leisure". About 27 per cent picked the option "enjoying the lifestyle I have always wanted"; 24 per cent chose "spending all the time I want with people who matter to me"; and the remaining 19 per cent picked "having a nest egg to slowly live out my life".

THE THINGS THAT MATTER

The panellists also elaborated on how the pandemic has affected their financial and retirement goals.

Mr Pang, for instance, said his family's finances took a hit when he decided to close the two outlets under his French patisserie chain Antoinette during Singapore's partial lockdown when Covid-19 hit last year. The financial strain of the pandemic was one of various factors that led him to put up the shutters.

Last July, he went on to set up Pang's Hakka Noodles at a foodcourt in Little India.

"I think the important thing (now) is to have a plan. It's a small noodle stall, it can't generate much revenue, but there are plans to grow. So that is what we are working on right now," he said.

Ms Ser said she was spurred to seek out opportunities amid challenges brought on by the pandemic. For instance, she realised that she could cultivate other streams of income such as by offering coaching services online, teaching presentation skills, and so on.

It is also important to upskill and invest in ourselves, Ms Ser said.

"I am almost 50 years old, but there are many people older than me who are at the cutting edge when it comes to technology, and who are ready to keep up with the times and make changes. I hope to never lose that. For as long as I am healthy, I hope to stay curious and to stay intelligent," she said, letting on that one of her goals is to pursue a PhD during her retirement years.

Mr Khoo said the pandemic was a reminder, for him, of the importance of health and family.

"Amidst (the pandemic), things which had seemed more predictable in the past have now become hard to predict… I think finding time to spend with family members has become a very important aspect of life because as much as experts can give you advice from an investment or insurance standpoint, it's family that will get you through the period (of uncertainty) and give you mental support," he said.

START THEM YOUNG

Mr Pang and Ms Ser, who each have three children, also spoke about the importance of teaching their young ones the value of money.

"I teach them the importance and the value of money, that it doesn't drop from the sky. I mean, of course they are a bit too young to understand where money comes from, but (I want them to understand that) you need to work for it, and you can spend (it) easily but it's not so easy to make. Slowly, they are getting the idea," said Mr Pang, whose children are aged 12, 11 and six.

Ms Ser said she teaches her children - aged 15, 13 and 10 - about "delayed gratification".

"Delayed gratification means that if you save your money now, you are going to have more to spend later on, and you will have more flexibility as to how you want to spend it. And you can be a joy to other people as to how you want to spend the money, and not always to gratify yourself," she said, adding that she has taken to making it a personal practice.

• The content was first published in The Business Times on Jan 28.