Some thoughts on retirement planning.... 1st question you may have: "Andy, you are 21 yrs old, isn't it a tad bit too early to plan for retirement? Its like so many years away!!" Okay, I'm intending to retire at a 'ripe old' age of 43, that will make about 22 years more to plan for it. Still far? I personally don't think so. Lets do some maths, assuming I live till 95, after retirement I will spend another 52 years chasing my dreams. In addition, I want at least $5k/month after I retire($60k/year in 2007 dollars). Plug in a conservative 2% inflation... to retire at 40, I will need........ $4.82 million SGD. Now assuming that interest is negligible, divided by 19 years, I need to save $18270.67/month!! Now, as an NUS student, is that possible??

If I invested in unit trusts, stocks and shares and other financial instruments, I assume I reaped a conservative 12% per annum, I need to save $2243/month, what a big difference it makes!! And I can firmly say that, $2000 a month is darn right achievable. I don't think I need to say how much 1 more year of procrestination of retirement planning will do to your funds in the end.

That's not all, what about wedding expenses, car, housing, family and all other expenses?? The $ sign is all-present around. Just some information from my Gym buddy, Kwek. He just wedded, and the expense are as shown:
1. Wedding dinner ($650/table * 60tables): $39,000
2. Photography, car rental, other expenses: $10,000
3. New 5-room flat (Tampines) : $35,000
4. Renovation, furnitures : $15,000
Total : $99,000

Hence, there are 2 main advantages to start planning early.
1. The effect of compounding will work wonders for one over a super long timeframe
2. Compounding effect will be undermine if the money invested is put in low yield instruments like endowments, time deposits. The idea of starting early gives one time to let your money work harder than you through higher yield instruments.