My Retirement Plan Is A Gift To My Kids

It’s about a year since my daughter joined the workforce after her graduation with a Fashion Contour degree from London College of Fashion in 2017. She had spent four years in London, including a placement year interning in fashion firms in London and New York.

My son is pursuing his degree in Food Science and Nutrition at the University of Nottingham and I look forward to attending his graduation ceremony in July next year (2019).


Photo by Lorna Tan – From left: Lorna Tan, Jacelyn Chua, Jared Chua and Jack Chua, taken in Kyoto.

After more than two decades, my hubby and I can look forward to a phase of life where we can cast aside our concerns on funding our kids’ education. Not only is graduation a milestone for my kids, it is a milestone for me as a parent too.

Looking back, it has not been a walk in the park. Both my kids were on mom-and-pop scholarships, that is, their education costs were fully funded by my hubby and me. We had not planned for an overseas education for our two kids but we were eventually able to fund them, thanks to us adopting a long-term view when planning our finances which includes retirement planning. Still, it means digging into our savings and investments, and making adjustments to our financial plans.
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A back-of-the-envelope calculation showed that funding both kids’ education has reduced the family coffers by more than half a million dollars. My daughter’s education cost about $240,000 with the bulk coming from tuition fees and the balance from her accommodation and monthly allowance. My son’s education cost more because tuition fees are higher for a science-related degree.


Photo by ChristianChan

This is a far cry from the $2,000 that my three years at the National University of Singapore cost. Back in the mid-1980s, the tuition fee was a mere $1,000 per academic year. As a needy undergraduate student, my first year was funded by the Wee Kheng Chiang Memorial Bursary so I only paid two years’ of tuition fees.

I have not demanded for my kids to share their education cost with me nor to repay my hubby and me. By doing so, my kids are debt-free which allows them to take better control of their financial destiny from day one. The clean financial slate – compared with others who have taken loans to fund their tertiary studies – means that they are not encumbered when they set up their budget and work out a financial plan.


Photo by Lorna Tan – Lorna and family at Santorini, Greece

Besides the gift of overseas education to my kids, I have another gift for them which is my retirement plan. I hope my kids will understand how this has a far-reaching positive impact on their lives, like the bridegroom in the Income advertisement.



In the advertisement, the bridegroom claimed during his wedding speech that he had the “worst” parents in the world because they did not send him for piano lessons nor indulge in fancy birthday parties and expensive vacations. His parents had preferred to cater to his needs and not his wants. The bridegroom concluded that because his parents are prudent in their financial planning, they are able to retire well on their own without depending on their offspring. And he is thankful that he can forge this own life without having to worry about his parents’ retirement needs. The advertisement ended with the bridegroom thanking his parents and resolving to be the “worst” parents in the future.

I had mentioned in my earlier blog post that I am my parents’ retirement plan as they have no savings and assets except for the flat they live in. This means I have to cater to their retirement needs in my retirement plan. The first time this reality sank in (when I was in my teens), I was filled with anxiety and fear.

When I became a parent, I resolved not to put my kids in the same situation if I can help it. Besides, relying solely on my kids for my retirement is simply not sustainable, what with the rising cost of living, healthcare costs and the volatile market environment. Better to be financially independent and rely on myself.

Nevertheless, it was not easy juggling between managing the kids’ education (particularly when it was overseas and not local) and saving for my retirement. But I was determined to make it work.

Here are some steps that I took in my financial journey:

1. Disciplined savings habit and targets

Photo by Nuthawut Somsuk

I have inculcated a disciplined savings habit since young and I will think twice before spending. Being able to differentiate needs from wants helps to put things in perspective. Ask yourself: Do you really need this item?

I “pay myself first” by setting up a Giro plan where a certain amount is deducted monthly from my pay and channelled to another bank account. To prevent quick access, there is no ATM card linked to this account. I enjoy setting up savings targets and tracking them.

Don’t underestimate the power of saving. Without savings, you have no “seed money” to invest and grow your savings. If you find saving difficult, start with a small savings target and adjust as your income grows over the years.

Financial and retirement planning is not just for the rich. It is your responsibility to set up your financial plan because if you don’t help yourself, who will. There is wisdom in this statement: Without a plan, you are planning to fail.

2. Set up a budget

It is prudent to set up a yearly budget and review it regularly. A budget is a useful tool to keep track of your income and expenses. I like to come up with different budgeting scenarios for different retirement lifestyles, and work out how I can fund them over time with multiple income flows.

For those who have difficulty saving, it is worth your while to track your expenses and look for areas where you can cut your expenditure. It may be as a simple as cutting down your daily coffee intake and/or entertainment.

3. Holistic financial plan

There are four aspects to a holistic financial plan – Protection, Accumulation, Preservation and Distribution. Do ensure that you take into account the aspects when setting planning for your future.

4. Set up a retirement plan

Photo by gustavofrazao

When I was in my 30s, I set up a retirement plan by visualising my retirement lifestyle and quantifying my likely income flows and expenses for my needs and wants. Since then, I have reviewed my plan regularly and made adjustments.

It is never too early to set up a retirement plan. The earlier you start, the longer is the time horizon for your funds to compound and grow over time. It helps to give you a long-term investing perspective while you are working towards shorter-term goals like annual vacations and children’s education. Do not to lose sight of your long-term financial needs.

5. Look out for investment opportunities

I constantly monitor for suitable investment opportunities to achieve short-term and long-term goals. For example, I invested in an apartment in London when my daughter was studying there. The monthly rent was enough to fund her monthly allowance and when the apartment was sold after she graduated, the profit covered her education cost.

For my retirement planning, among other investments, I bought an annuity insurance plan from NTUC Income to complement the monthly payouts that I will receive from my CPF Life plan, when I turn 65.

It helps that my work gives me access to a wide array of investment products in the market. And I constantly rub shoulders with financial experts who are able to offer their view points.

6. Government schemes

I keep abreast of government schemes like the national annuity scheme Central Provident Fund (CPF) Life. In addition, I plan to leverage the attractive interest rates of CPF accounts to optimise my retirement savings.

Other government schemes include the Supplementary Retirement Scheme (SRS) which I use to reduce my income tax liabilities. My SRS funds are invested in blue chip stocks.

7. Financial know how

I constantly upgrade my financial know how by talking to experts, reading and writing. Having some basic knowledge will help us ask the right questions and analyse the suitability of products, so as to make informed investment decisions.

The writer is Invest Editor at The Sunday Times and author of three best-sellers: Retire Smart - Financial Planning Made Easy; More Talk Money; and Talk Money.