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4 Mindset Change to Achieve Financial Independence, Retire Early (FIRE)

The “Financial Independence, Retire Early” (FIRE) movement has been raving in recent years. Unlike our parents, many of us are looking for FIRE and see it as a way out of the soul-sucking, time-stealing work and the economy that is fueled by consumerism.

For many of us, FIRE means that retirement happens at a much earlier age than the current “stipulated” retirement age of 62. But we realized that not many are ready for this FIRE movement because of some of the retirement myths that we have inherited from the society. This article is meant to bring fresh perspective on how everyone should be thinking about retirement if you want to achieve FIRE.

Myth 1: CPF LIFE Is Meant For Retirement, And That’s All You Need

While the Central Provident Fund (CPF) is indeed meant for retirement, it isn’t suited for FIRE. That’s because it has a stipulated age where you can start withdrawing from the CPF LIFE, i.e. age 65. Unless you are age 65, CPF LIFE isn’t going to start paying you anytime soon. But FIRE happens way before age 65. Not to mention, the retirement age will slowly creep up. The Singapore government has already announced that retirement age will be raised by 2030. While the age for accessing your CPF might not changed, you can’t be too certain about it.

That’s why you can’t rely on CPF for FIRE. You really need to build your own retirement savings for early retirement by starting your retirement planning today.

Mindset Change: My FIRE Plan Starts With Me And It Starts Today

Not sure if you are ready for retirement? Do your own self-assessment using our retirement tool here. If you are feeling lost about planning for retirement, we would love to help you design a personalised retirement plan for you.

Myth 2: Retirement Will Come Naturally If You Work Hard

Since young, we have been conditioned by our meritocratic society and our education system to think that hard work beats everything. As long as we work hard, we will get our justified rewards, right? So, retirement will come naturally for us if we work hard too, right? Well, not quite.

If you only rely on savings for retirement, then you will never ever retire. That’s because inflation eats away at your savings every year. By the time you are ready for retirement, 30-40% of your savings would be eroded by inflation. You can then say goodbye to your plan for FIRE.

Mindset Change: Invest Today To Avoid Retirement Regrets Tomorrow

Myth 3: You Don’t Have To Think About Retirement Because It’s Still Too Early

You think that you are still young and the word ‘Retirement’ is still an elusive term for you? Well, if you really want to achieve FIRE at an early age like 40, then it’s time to start planning for retirement.

That’s because you only have around 15-17 years to save up your retirement fund, considering that most Singaporeans complete your university education at age 23-25. Not to forget, your CPF is only accessible once you hit 55 and for that to be accessible you have to meet your minimum sum which is rising at a pace of 3% thereabout each year. So, what are you going to live on between 40 and 65? Plus, with only 15-17 years of working life, you have very limited time to hit above your minimum sum.

Mindset Change: Retirement Planning Starts Today, Especially If You Want To Achieve FIRE

Check out how you can start your financial independence retire early today here.

Myth 4: Retirement Is Not About Dropping All Your Work Commitments

For some of us, retirement means dropping all your work commitments and just drinking kopi with your kakis at the coffeeshop every day. Increasingly, the definition for retirement has been shifting towards semi-retirement.

With semi-retirement, it means that you are still committing to a work routine but it comes at your own personal choice. You get to choose what you want to pursue. It could be a small F&B business or a business partnership into a hobby that you are personally passionate about.

Having a semi-retired lifestyle not only keeps your mind active, it is also helpful in keeping you healthy.

Mindset Change: Planning Towards A Semi-Retirement Can Make Your FIRE More Attainable

 What can you do next to achieve Financial Independence Retire Early (FIRE)?

Moneyline.SG work with independent financial advisor to provide retirement planning for individuals like you. If you’re looking to sit down with an expert to plan for your retirement, fill up the form below and a licensed financial planner will meet with you and go through a free non obligatory financial planning session.


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