Tips That May Help With Retirement
We all want the best for our parents. They have taken care of us all our lives, and now it is time to return the favour. In a few years’ time, your parents may want to retire and this will mean they have to manage their expenses without consistent income anymore. To ensure they live out the rest of their life with peace of mind, you can help plan their retirement savings and insurance coverage. So, how can you do that? To help you get started in your parents’ retirement planning, we have listed 6 tips that can set you on the right track.
Go for a retirement savings plan as soon as possible All of us want to see our parents live comfortably without having to worry about their finances. This is why your parents should opt for a good retirement savings plan early and leverage on compounding interest to ensure financial stability. A stable retirement plan that includes a monthly income that has the potential to grow annually could help keep up with inflation. Any good plan would also offer you Accidental Disability Benefit, where in case of an accident resulting in total and permanent disability, your future premiums would be waived. You can also receive additional monthly income aid for support. Make a cash top-up to your parents’ CPF accounts Making a cash top-up for your parents’ CPF accounts will greatly benefit them. They will receive higher monthly pay outs from the national annuity CPF Life Scheme. If you were planning to make a top-up, do it sooner in order to accrue more interest. This will highly benefit your parents.
Make sure your parents have adequate hospitalisation cover Every Singaporean has basic coverage under MediShield Life. If you feel your parents need a more comprehensive coverage, you should go for Integrated Shield Plans that offer your parents a wide range of private or restructured hospitals to choose from. It is best to talk to a financial consultant while choosing an insurance plan for your parents. Plus, some insurers also cover planned overseas treatment, which makes it possible for your parents to access top-quality healthcare services. Help your parents complete their CPF nominations CPF savings, unlike what many believe, cannot be distributed through a will. You would have to go to a Public Trustee who would charge a fee for administering CPF savings that have been left innominate. It would be better for your parents to make their CPF nominations as soon as they can so that distributing them would not be a problem in the future.
Ensure that your parents have critical illness coverage A critical illness insurance plan provides a lump sum payout if the policyholder is diagnosed with a specific critical illness. To give an example, MediShield Life has a limit of S$3,000 per month for chemotherapy. But a single chemotherapy session can cost S$4,000 or even more. Also, patients go for chemotherapy sessions twice a month on average, which could cost twice as much. This is where a critical illness insurance plan or cancer insurance plan can be very helpful as the lump sum pay out can help cover treatment bills as well as day-to-day expenses. This is especially useful when one has to stop work to focus on recovery. However, do make sure to do your research well and consider your parents’ needs for a critical illness insurance plan. Help them in making their will Making a will can be quite a sensitive topic, but a very important one nonetheless. Drawing up a will looks like a black and white process; it could get quite complicated. In such cases, it is best to hire a lawyer who will be instrumental in avoiding any grey areas which could lead to fights in the future. You can also take advice from a financial consultant for getting a suitable retirement plan for your parents. All the best!
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