Financial Independence - Managing Retirement's Uncertainties

Financial independence - managing retirement's uncertainties

Average lifeexpectancy in Singapore

One of the biggest fears people face is running out of money during their old age. Research shows that people are living longer in most developed countries1, and it is no different in Singapore, where the average life expectancy is 79.9 years for men and 84.5 years for women1. The elderly in Singapore have the CPF LIFE scheme, but that is only enough to provide a basic standard of living.

Many Singaporeans also struggle to meet even half of the prevailing CPF Minimum Sum – the amount calculated to provide a basic standard of living in Singapore. Furthermore, many divert a large portion of their CPF savings to mortgage repayments.

Fortunately, many Singaporeans have realised that they need to be more pro-active with retirement planning, and not solely rely on their CPF. Many have begun planning and setting aside additional funds for this.

So how can we preserve the value of our retirement savings and ensure that unforeseen events do not wipe out our financial independence, while having a fulfilling retirement along the way?

In this article, we look at potential unforeseen events and the methods of managing them. Uncertainty management should definitely be part of a retirement plan, and this should include:

  • Guaranteed income regardless of how long you live
  • The ability to protect your savings and retirement goals
  • The ability of your spouse to have a secured retirement even when you are no longer around
  • The assurance and peace of mind knowing that the worst cannot destroy your dreams and goals

You survive but are left mentally incapacitated Who decides how you want to be treated? Cost of treatment and burden on loved ones? You survive but cannot work How long will you be down? Do your loved ones depend on your income? Can you go on without income? Will your retirement savings be depleted and expose you to liquidity risk?


Loved ones may argue over how best to treat you, if you did not specify the level of care beforehand. They may then be stressed out emotionally and financially.

Loved ones may be affected (e.g. children's education and living expenses), you may be forced to liquidate your retirement savings too soon, resulting in liquidity risk

How would you rather your medical bills be paid? You own savings or other people's money?


Ensure you have the following thought out:

  • Advanced Medical Directive
  • Living will
  • Hospitalisation insurance to meet your desired level of healthcare standard
  • Consider Critical Illness and Disability Income insurance to provide for the temporary loss of income while you recuperate
  • Hospitalisation insurance to meet your desired level of healthcare standard
  • Set aside emergency funds to provide for 3 to 6 months of expenses

You survive and go back to work; Are you prepared for this event? If not, what do you need to do to ensure you won't leave it to chance?


Your loved ones will be very worried, and you might have spent some of your savings on medical treatment. How do you ensure that it does not repeat?


Call your Relationship Manager for a complete review.

"Being better prepared for handling any unforeseen scenarios that might arise during your retirement will ensure that you stay financially independent throughout your golden years."


Speak to us to find out more

Contact me

Source: DBS Asian Insights Office - December 20141