This question always flashes in the mind of people who are ready to save for retirement. Unless you are financially savvy and could punch some numbers on the calculator to get your retirement figures, it is really tough for the man on the street to know what is enough for them?

To know how much is enough for retirement all you need is to follow these steps:

1. Find out what is your nett annual income after deduction of any provident funds contribution. In Singapore, the amount is 20%. E.g $50,000 x 80% = $40,000
2. Establish your retirement age. Is it 55 or 62 years old?
3. Minus your retirement age with your current age
4. The figure you get is the number if working years you have to work towards your retirement. E.g. 62-30 = 32
5. Assuming no increment of pay for 32 years, use your annual pay and multiply by 66% (assume two third of your last drawn pay is sufficent to satisfy your lifestyle during retirement) E.g. $40,000 x 66% = $26,400.
6. Assume you live till 80 years old, you will have to spend the money annually for  18 years. (80-62)
7. Multiply 18 years by $26,400  you will get $475,200. This is the amount you need to see yourself through retirement for 18 years.

*Figures above assume no pay increment and interest

This is a simple excercise to know roughly how much you will need upon retirement. If you need to know more about how to plan your retirement with your exisiting resources, do look for a financial consultant to assist you.

According to World Health Organisation (WHO) Heart attack and strokes are the world’s leading cause of death. With illness striking most of the people around you and medical cost is getting higher day by day, one just cannot afford to be sick or have critical illness or else it will be a heavy financial burden to the family.

However, with adequate medical insurance, one will be protected against financial difficulties when illnesses strikes. However, some people may not have critical illness protection at all or, if have, very little. To have adequate protection, one should have at least $500,000 coverage for critical illness. You may find its alot of money, however this is just a coverage for a person who earns $50,000 a year for ten years.

Plan for loss of income

When planning for critical illness protection, one may have an overlook the loss of income. Besides just paying off your medical bills, you should also cover for loss of income. Typically it will take up to a year or so for a cancer patient to get well and get back to work, imagine, one year without an income, how are you going to pay for your daily expenses and if you are sole breadwinner, or the more you should have more protection than when you are single.

Get Critical Illness Protection early

Get yourself critical illness protection in your early part of your life, this is because or health may deteoriate over time and we may not be as healthy as we are when we are young. I have met clients who came to me and say they wanted to increase their critical illness protection only to be disappointed because of pre existing illness condition.

Prumultiple Crisis Cover

Prudential launched a new critical illness plan called Prumultiple Crisis Cover. Usual critical illness protection plans will terminate once a patients made his claim and leaving the patient without any insurance protection if there ever be a relapse. This is the first ever mutiple protection plan that provide THREE critical illness protection claims. Of which, two of the claims can be cancers (including relapse of the same cancer). When a claim is made, the future premiums will be waived off and still enjoy critical illness protection should it be necessary in the future. This is the first of its kind of policy in the insurance industry. To know more about this plan, please feel free to contact me.

During my presentation with my client, I will always introduce the concept of Dollar Cost Averaging.

What is Dollar Cost Averaging?

Dollar Cost Averaging is investing a fix sum of money at a regular interval (e.g. monthly or weekly) in a financial instrument (stocks, unit trust or shares), regardless of its price at the intervals.

In my definition, Dollar Cost Averaging is buying more units or shares when the price is low and buying less units or shares when the price is high. It works very well in both down market or up market. Especically in these tough times, indexes around the world do not move much and is constantly at a low. It is time to start investing now when  prices is low.

How Dollar Cost Averaging Works?

If you invest in a particular unit trust, you will buy more units when the price is low and buy or units when the price is high. Please see illustration below,

Month	Amount	Price	No of Units
1	$1,000	$ 1.00	1000
2	$1,000	$ 0.50	2000
3	$1,000	$ 0.20	5000
4	$1,000	$ 0.80	1250
	$4,000		9250
Average Price Per Unit
	$4,000	=	$       0.43
	9250

This is a losing money scenario. You started to invest at $1.00, but at the end of 4th month, the value of the unit trust has gone down to 80 cents. If you were to invest in a lump of $4,000 at $1.00, the value of your unit trust at the end of 4th month will become $3,200, you have lose $800 straight. But if you invest steadily in the unit trust, (like in the illustration) you will actually have a gain of $3422.50 (9250 units x [0.80-0.43]). On top of that your principle still remains at $4,000. In total you will have $7,422.50 instead of $3,200. 

Will you change the way you investing by switching to dollar cost averaging method? Well its up to you to decide.