Share Now
truth about personal finance and financial planning

The Truth About 3 Personal Finance Questions That Singaporeans Are Always Asking

Singaporeans are among the most stressed out citizens in the world. That’s because we have so many things to worry about, especially when you are living in one of the most expensive cities in the world. The top worry that bugs Singaporeans the most is definitely personal finance. Questions like “Am I earning enough?” and “Can I retire comfortably in 20 years’ time?” are constantly on our minds.

To help you and I tackle personal finance and alleviate some of your stress, we will be analyzing 3 the most common personal finance questions that are always on Singaporeans’ minds. Make sure you are taking down notes to the answers for these common personal finance questions.

Question 1: Do I Need Insurance Or Can I Save It For Something Else?

Some of us are reluctant in spending money on insurance. Why? That’s because you end up paying for insurance without getting anything in return under most circumstances.

After all, insurance only allows you to make claims in specific situations specified in your policy, i.e. death, total and/or permanent disability (TPD) or diagnosis of critical illness (CI). Thus, it is no wonder why you are questioning the need for insurance when we have the option of saving some money on the insurance premium for something else instead.

But if you take a step back, you might find a convincing answer to the question. By spending a small percentage of your income, you get to protect your financial assets for your loved ones for a good number of years. It is a small price to pay for the protection you are receiving in return. In the unfortunate event that you end up in an accident or get diagnosed with CI, your family won’t have to worry about being saddled with an unsurmountable debt.

Verdict: Don’t scrimp on your insurance. Rather, make sure that you are maximizing your dollar by spending the right amount on insurance.

Not sure which insurance you should be getting? Try Moneyline’s #InsuranceCombo to help you strike a better deal that you deserve!

Question 2: Should I Buy A Car Or Take Cab/Public Transport?

Owning a car in Singapore can cost you anywhere between $70,000 to $100,000 for an average sedan car. It is no wonder why Singaporeans are thinking twice when deciding whether to buy a car. After all, buying a car is one of the most expensive financial commitments you can make as a Singaporean. Not only will you need to fork out 50% (~$50,000) of the car’s value as down payment, it will leave you an extra $50,000 in debt for up to 7 years.

Alternatively, if you don’t buy a car, you can opt to take a mix of cab/ride hailing cars as well as public transport. Interestingly, the cost of taking cab/ride hailing cars to (and from) work every day is still 20-30% cheaper than owning a car! Although this does not take into account the possible price surge during peak hours during the work week, the idea of having someone chauffeuring you around still sounds much better.

Verdict: Buy a car only if it becomes a necessity for your work (e.g. If you are a salesman who needs to constantly travel to meet clients)

Question 3: Do I Really Need To Add To My Retirement Savings When I Already Have My CPF?

Every Singaporean knows that CPF is synonymous with retirement to the extent that some of us rely solely on CPF for retirement. While CPF is a good system that “encourages” us to save for retirement, is it really enough for your retirement?

Well, that depends on what kind of retirement lifestyle you are aiming for. If you are aiming for the basic retirement lifestyle, then you don’t have to worry about not having your own retirement savings on top of your CPF.

Basic Retirement Sum Full Retirement Sum Enhanced Retirement Sum
CPF Savings Required $90,500 $181,000 $271,000
Daily Receivable Amount (based on Standard Plan) $28 $52 $72

Source: CPF.gov.sg

However, if you are looking for anything more, then your CPF isn’t going to provide you enough for your retirement. Even with the Enhanced Retirement Sum, you are just getting slightly more than $70 a day. After covering your daily expenses, you won’t have much money left for your once-a-month holiday trip.

Verdict: If you are looking for more than a basic retirement lifestyle, you definitely need to add to your retirement savings.

Looking for a retirement plan to enhance your retirement savings? Check out 3 of the best retirement plans in Singapore right here.

Comments are closed.

  • MoneyLine.sg is an independent information provider. It is not a bank or financial services provider and cannot give direct financial advice.
  • All Sample Premium results if shown are based on the criteria indicated and MoneyLine.sg does not warrant or guarantee that anything written here is accurate, timely, or relevant to the solution of any problem you may have.
  • Contents are intended as general information only and do not consider financial situation or need of any user or reader, any specific person or group of persons. It does not constitute advice nor does any part of the content constitute an open offer capable of forming the basis of a contract.
  • Moneyline.sg works with Synergy Financial Advisers to present these contents. Synergy Financial Advisers makes no representation or warranty as to its adequacy, completeness, accuracy or timeliness for any particular purpose. All information provided is not intended to be and does not constitute financial advice, insurance advice or any other advice or recommendation of any sort offered or endorsed by Synergy Financial Advisers.
  • Promotions indicated on this page may not be accurate and may be subjected to changes by providers without warning. Moneyline.SG does not take responsibility for the accuracy of the information shown in this content.
  • You are recommended to seek financial advice from a qualified financial advisor for product suitability and its latest premium rates quotation before deciding to purchase the product. In the event you choose not to seek advice, you should consider if the product is suitable for you.
  • Without prejudice to the generality of this, MoneyLine.sg Pte Ltd specifically excludes liability for any loss or damage no matter how arising from the use of this Web Portal or of any information or services provided through this web portal.
  • Please read our full Disclaimer on the use of our website.