Your starter kit to financial success
Your starter kit to financial success
Have you been procrastinating planning for your finances? Well, it is time to stop making excuses and start planning for your financial well-being over the longer term.
Basic financial planning guide
In October 2023, the Monetary Authority of Singapore (MAS), in conjunction with finance industry associations, launched the Basic Financial Planning Guide. This Guide provides a basic framework to help individuals seeking to take their first step in enhancing their financial future.
The guide provides simple financial planning rules of thumb or guidelines as shared in the table below, and how government schemes such as Singapore Saving Bonds (SSBs), Treasury bills (T-bills), Central Provident Fund, MediShield Life and CareShield Life, can be taken into consideration to enhance financial wellness.
Table 1: Basic framework for individuals* to get a head start on their financial planning journey.
*There are some differences in key needs across different life stages.
Source: MoneySense, retrieved on 31 January 2024
On 31 Jan 2024, an enhanced version of the Guide was introduced, with tips to empower you to make smart financial decisions at each life stage by guiding you towards prioritising your key financial needs.
Table 2: Individuals face evolving challenges, responsibilities, and goals as they progress through life.
Navigating through various life stages
Life is a dynamic journey marked by distinct stages, each with its own set of challenges, priorities, responsibilities, and goals.
Fresh entrants to workforce (Age 19 to 29)
When you enter the workforce, the emphasis often lies on achieving financial independence, and along with it, your first big financial purchase.
However, this is also the ideal time to focus on your long-term financial goals like retirement. With a longer investment horizon, you can benefit from the power of compounding and ride out market fluctuations.
Additionally, at this stage of life, you are young and likely to have better health. With fewer pre-existing health conditions, this is an opportunistic time to consider obtaining life and critical illness insurance at a lower premium.
Working adults (Age 25 to 59)
A new set of challenges and responsibilities arise as you move towards the family planning stage. At this stage, it would be a wise move to build up an emergency fund for unexpected events like job loss or illness, as your responsibilities expand to include providing and caring for ageing parents.
Take a moment to consider what you have built: your career, family, and everything else that you have achieved. Ensuring your loved ones are protected if something happens to you becomes even more critical. This means carefully planning for your own protection needs, while not forgetting to also work on your children’s education, your parents’ healthcare, and your own retirement.
Planning for retirement (Age 55 and above)
Given Singapore’s advanced healthcare, you are likely to have a longer lifespan, making it crucial to plan for your retirement and healthcare. Start by envisioning your ideal retirement lifestyle. To ensure that you can sustain this lifestyle, you should start building your future income now.
Another important aspect is legacy planning. Start outlining how you want your assets to be managed, your wishes to be fulfilled when you lose the mental ability to take care of yourself and how your loved ones should receive your distribution as per your intention.
Everyone’s financial circumstances are different
At the end of the day, no matter which life stage you are at, balancing these responsibilities with one’s career and family obligations requires careful planning, including managing expenses, to avoid nasty surprises later in life.
The guide provides an excellent starting point for everyone. However, it is important to remember that everyone’s financial circumstances are unique. Therefore, proper financial planning tailored to your specific needs and goals can help you proactively address the unique challenges and opportunities presented at each stage of your life. To take the next step, explore personalised options through OCBC app, or talk to our Personal Financial Consultant for a customized assessment.
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Important notices
General disclaimer This advertisement has not been reviewed by the Monetary Authority of Singapore. Information presented as at 1 January 2024.
Important notes for Insurance Insurance policies are provided by The Great Eastern Life Assurance Company Limited, a wholly owned subsidiary of Great Eastern Holdings Limited and a member of the OCBC Group. These policies are not bank deposits and OCBC Bank does not guarantee or have any obligations in connection with it. This document does not take into account your particular investment and protection aims, financial situation or needs. You may want to seek advice from a financial adviser before committing to buy the product. If you choose not to seek advice from a financial adviser, you should consider whether the product is suitable for you. 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. This document is for general information only. It is not a contract of insurance or an offer to buy an insurance product or service. It is also not meant to provide any insurance or financial advice. The specific terms and conditions of the plan are set out in the policy documents. If you are interested in the insurance policy, you should read the product summary and policy illustration (available from us) before deciding whether to buy this product. We do not guarantee, represent or warrant that any of the information provided in this document is accurate and you should not rely on it as such. We do not undertake to update the information or to correct any inaccuracies. All information may change without notice. We will not be liable for any loss or damage arising directly or indirectly in connection with or as a result of you acting on the information in this document. This advertisement has not been reviewed by the Monetary Authority of Singapore.
Policy Owners' Protection Scheme These policies are protected under the Policy Owners' Protection Scheme which is administered by the Singapore Deposit Insurance Corporation (SDIC). Coverage for your policy is automatic and no further action is required from you. For more information on the types of benefits that are covered under the scheme as well as the limits of coverage, where applicable, please contact us or visit the Life Insurance Association (LIA) or SDIC websites (www.lia.org.sg or www.sdic.org.sg).
Important notes
This advertisement has not been reviewed by the Monetary Authority of Singapore.
The information presented is for general information only and does not have regard to the specific investment objectives, financial situation or particular needs of any particular person.
GREAT CareShield can only be purchased by CareShield Life or ElderShield policyholders. All Supplements are regulated under the CareShield Life and Long-Term Care Act 2019.
This is only product information provided by us. You may wish to seek advice form a qualified adviser before buying the product. If you choose not to seek advice from a qualified adviser, you should consider whether the product is suitable for you. Buying health insurance products that are not suitable for you may impact your ability to finance your future healthcare needs. If you decide that the policy is not suitable after purchasing the policy, you may terminate the policy in accordance with the free-look provision, if any, and the insurer may recover from you any expense incurred by the insurer in underwriting the policy.
Policy Owners' Protection Scheme
This policy is protected under the Policy Owners’ Protection Scheme which is administered by the Singapore Deposit Insurance Corporation (SDIC). Coverage for your policy is automatic and no further action is required from you. For more information on the types of benefits that are covered under the scheme as well as the limits of coverage, where applicable, please contact us or visit the Life Insurance Association (LIA) or SDIC websites (www.lia.org.sg or www.sdic.org.sg).
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