Q&A: Financial Planning for the Young

Question: Should young adults think about financial planning, when their earning is still low?

Yes. Each person should save at least 10% of their earnings. This is very important, as jobs are uncertain. They may also need their saving to meet an unexpected payment, including a large medical bill, or when they lose their job.

Question: How should they invest their saving?

They should invest in a flexible saving plan that can give an attractive rate of return over several years. An investment-linked plan from NTUC Income is probably the best. It is more appropriate than a bank account or a traditional life insurance plan.

Question: Does this plan have high charges?

Most investment-linked plans have high charges. But you can choose a plan that invest 100% of your monthly savings immediately, and incur low charges.

Question: Does this plan provide insurance protection?

It is better for you to buy a decreasing term assurance. It provides high coverage at a low premium that remains fixed during the term.