Millennials – rebels of the generations, the once 90s babies – are now entering the workforce, starting families and heading towards their 30s. Gone are the days of waiting for the morning assembly, reading True Singapore Ghost Stories and chatting on MSN Messenger. Millennials now dream of going on Insta-worthy vacations, owning the latest gadgets and having purposeful careers. Whatever your goal is, you need to plan ahead. From the job promotion, to the date of your wedding, and even for that long break – your retirement.
“I’m only 20 something. Aren’t I too young to start saving for retirement?”
That is what most people think. As the pioneers of the digital age, you are not most people. Achieving financial freedom through wealth management is no easy task. Here, we give you five reasons why you need to start saving for retirement now.
1. You are young and in good health
Life insurance covers medical cost and other uncertainties in life. “What does insurance have to do with saving for retirement?” you asked. It is more difficult to make money back once you lost it. Insurance protects your wealth, and investments grows it.
Fun fact: According to the Singapore Budget 2019, the estimated healthcare expenditure is expected to be more than S$11 billion. This is almost on par with Singapore’s estimated total defence expenditure which is S$15 billion.
Global medical costs are rising. Life insurance gives you financial protection so you do not waste your hard-earned money paying for high medical expenses. If you are young and have no pre-existing health conditions, you can opt for the most affordable premium rate.
Tiq’s Online Life Protection provides full health coverage from S$0.04/day. Choose from whole life and term life plans for your protection needs. Lock in a good premium rate now because the cost might jump once you get older (ahem, the 30s) or start developing any health condition. So, why wait? Check out our Online Life Protection now for more info!
2. You are maturing; Let your money mature with you
A 2019 study by OCBC and the National University of Singapore (NUS) showed that among 866 students and working adults aged 16-29 in Singapore, 71% are interested in investment, but only 38% know how to.
We got your back. With Tiq by Etiqa Insurance eEASY savepro, you can save with a high potential yield of up to 4.07%* p.a.. Let’s say you invest a yearly premium of S$5,000 for 10 years. At the end of the policy term, you should have S$50,000 (because S$5,000 × 10 = S$50,000) right? Nope! With eEASY savepro, you will have S$76,091* in your account. This is an illustrated sum as returns are not guaranteed. Either way, you are already on your journey to financial freedom when you let your money work for you!
3. Your employer’s insurance may not be sufficient
You landed a job with lots of cool benefits, ping pong tables, bean bags and insurance coverage. Everything a millennial could ask for. But your employer may offer the most basic group life insurance benefits. Is it enough to cover all possible critical illnesses? And once your period of employment ends, you no longer have access to that insurance.
The Ministry of Trade and Industry (MTI) reported 7.3% of company cessation in Singapore in 2014, 7.6% in 2015 and 7.8% in 2016. The number is on the rise as consumers migrate from physical to digital channels. What if you lose your job in today’s challenging market? Your income, savings and investment opportunity will be lost, too.
Having an Online Life Protection such as DIRECT – Etiqa Whole Life to supplement your employer-sponsored insurance is a form of wealth management. It can help protect your family and give you a safety net to fall on in an unexpected event such as getting laid off or if the company goes out of business.
4. The rising cost of everything
A study at MIT (Poterba, 2014) suggested that millennials need to save almost 50% of their monthly income for 30 years in order to retire comfortably by 65. However, most millennials are saving an average of 6% of their monthly income, and only one in five millennials managed to save more than 15%. This is due to high living costs, accumulating debts and low income levels.
While you can live frugally without the weekly bubble tea, you cannot escape other expenses like housing, food and telecommunication. At Tiq, we understand that modern problems require modern solutions.
With Tiq’s flexible whole life insurance savings plan ELASTIQ, you can have life protection and grow your wealth simultaneously. Enjoy high guaranteed crediting rates of 1.80% p.a. for the first three years, and a non-guaranteed loyalty bonus every three years. You can even make partial withdrawals after the first 90 days without any penalty or interest clawback, and top-up your account any time. With such flexible finance, you can still enjoy the occasional bubble tea without worrying.
5. This is the youngest you will ever be to start saving for your vacation… or a new car… or that dream house
The last thing you want to think about in your 20s (or 30s) is probably sickness or your eventual demise. You cannot even decide what you want for lunch today, let alone plan for your golden years. But our age will catch up to us. Getting old happens to the best of us. Retirement will come eventually.
Housing and vacations are not cheap. Like healthcare, a huge chunk of your income will be gone in one spending. It is advisable to first set aside a portion of your salary for life insurance, a percentage towards saving for retirement, and the rest can be used for other spending with no worries.
More and more millennials are taking the initiative to achieve financial freedom. You might be interested in how millennials are changing the saving game. Why not get the ball rolling while you are still young, motivated and have less commitments? Let’s start saving for retirement by making financial plans. Your future self will thank you for it. We know, because we are millennials, too.
*Illustrated yields are 4.07% p.a. & 2.51% p.a. based on the illustrated investment rates of 4.75% p.a. & 3.25% p.a. respectively. Benefits payable may vary according to the future performance of the participating fund. Information is accurate as at 22 November 2019. This policy is underwritten by Etiqa Insurance Pte. Ltd. (Company Reg. No. 201331905K). Protected up to specified limits by SDIC. As buying a life insurance policy is a long-term commitment, an early termination of the policy usually involves high costs and the surrender value, if any, that is payable to you may be zero or less than the total premiums paid. You should seek advice from a financial adviser before deciding to purchase the policy. If you choose not to seek advice, you should consider if the policy is suitable for you.
Tiq by Etiqa Insurance Pte. Ltd.
A digital insurance channel that embraces changes to provide simple and convenient protection, Tiq’s mission is to make insurance transparent and accessible, inspiring you today to be prepared for life’s surprises and inevitabilities, while empowering you to “Live Unlimited” and take control of your tomorrow.
With a shared vision to change the paradigm of insurance and reshape customer experience, Etiqa created the strong foundation for Tiq. Because life never stops changing, Etiqa never stops progressing. A licensed life and general insurance company registered in the Republic of Singapore and regulated by the Monetary Authority of Singapore, Etiqa is governed by the Insurance Act and has been providing insurance solutions since 1961. It is 69% owned by Maybank, Southeast Asia’s fourth largest banking group, with more than 22 million customers in 20 countries; and 31% owned by Ageas, an international insurance group with 33 million customers across 16 countries.
Discover the full range of Tiq online insurance plans here.