Plan for retirement at age 65

Mr Tan,
What are your views on the raised retirement age? This would mean that an adult who joined the workforce at 25, has 40 years working. Does it change any traditional assumption that you make when planning, considering the assumption has always been 25 years?

REPLY
In my financial planning tool, I advise people to plan for retiring at age 65. If they start work at 25, they have a working career of 40 years. They have to be prepared to be out of work for a few years during this period, due to voluntary or involuntary termination of employment. They can plan for a few years of further education, if their finances are adequate.

I advise people to buy term insurance for 25 years only, say from age 25 to 50 years. When they reach age 50, they should have adequate savings in the event of premature death or illness. By that time, their children are likely to have grown up. The financial planning tool can be found here. This financial plan is explained here.