lifefinance

lifefinance

2 thoughts on “Are We Saving Too Much For Retirement?

  1. Looking at the responses to this post on Facebook, it appears that many people can get confused between “saving for a raining day”, “saving for a major purchase or expense”, and “saving for retirement”. They are not quite the same! The Whole Life policy that your Financial Advisor has been trying to get you to commit to? That’s saving for retirement, since you cannot touch the funds you have put in until retirement. That global equity fund the nice bank officer recommended at your last visit to update your passbook at the bank branch? That is saving for retirement, since the volatility of the fund value makes it impossible to know how much you can get out of it should you need the money in a hurry. That CPF top-up you thought of making? That is saving for retirement. But saving for an emergency fund is just saving to smooth out consumption in the near term. Saving for a dream round-the-world trip or a wedding or for home renovation, is just saving for near term consumption. So the message is NOT to not save at all, but to save smartly, prioritising current consumption when young, and saving (and investing) harder and smarter for retirement later on.

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