Investing is not a one-time decision; it’s a journey that unfolds over a lifetime. As you move through different stages – from starting your career to building wealth and preparing for retirement – your financial needs and goals evolve. Purposeful investing goes beyond merely building wealth; it’s about aligning financial decisions with your personal and family goals.
To navigate this journey successfully, financially savvy people rely on good money habits: Save, Protect, Grow, and Retire. These habits provide a clear roadmap for building a secure financial future, helping you lay a strong foundation, grow wealth, and enjoy peace of mind through every life stage.
POSB encourages you to “Treat Yourself Right at Every Stage of Life” by starting these habits today. From your first paycheck to retirement, small, consistent steps empower you to make better financial decisions and achieve security, growth, and confidence at every milestone.
The Foundation – Habit #1: Save Consistently to Start Your Investing Journey
A strong savings habit underpins successful investing, providing a safety net and enabling informed investment choices. Tailor your saving strategy to each life stage to prepare for unique challenges and opportunities at each phase.
In the early stages of your career, focus on building an emergency fund of at least three to six months’ expenses to manage unexpected costs without disrupting investments. For freelancer or gig-economy workers, it’s advisable to set up to 12 months’ worth of savings due to income variability. As your income grows, expand savings to meet life milestones such as home purchases or education, setting the stage for long-term investments. As retirement nears, prioritise lower-risk savings to protect your principal and support retirement goals.
Consistency is key. Automate transfers to a savings account to stay on track, starting with an amount that fits your income and increasing as your financial situation improves. POSB offers savings solutions suited to each stage, from POSB Smart Buddy for children, to Save-As-You-Earn (SAYE) accounts and DBS Multiplier high-interest accounts for adults.
The Safety Net – Habit #2: Protect Your Wealth
Protecting your wealth is essential to preserving the financial security you’re building. As you progress through life, safeguarding your assets becomes increasingly important. Protection isn’t only about insurance but about creating a safety net for you and your family against unexpected events.
For graduates entering the job market, start with essential coverage such as hospitalisation and critical illness insurance to cover unexpected medical costs. Starting young allows you to secure coverage while you’re still healthy, reducing the risk of policy exclusions. As responsibilities increase, expand your protection strategy to include life insurance and disability income coverage, especially if you have dependants. As retirement approaches, shift focus to preserving what you’ve built. Topping up long-term care insurance can help cover potential expenses, ensuring retirement savings remain intact.
Regularly reviewing your coverage needs ensures your financial plan stays resilient at every life stage. POSB provides a range of insurance options tailored to different phases of life, offering security and peace of mind.
The Growth Strategy – Habit #3: Invest Smartly
While saving and protecting wealth are essential, true financial growth requires investing. Strategic investments allow your money to grow beyond savings alone, benefiting from compounding and market growth over time. Investing also guards against inflation, maintaining your wealth’s value while helping you achieve long-term financial goals.
Starting your career with a strong investing habit allows you to leverage time for higher-risk, higher-reward investments such as equities or growth funds. Begin with small, consistent contributions—taking advantage of compounding over time—while building a diversified portfolio of low-cost index funds or ETFs for steady, long-term growth. Investing as little as $100 in two to three ETFs or unit trusts can help you gain confidence and experience in investing.
In mid-career, continue to invest in growth opportunities but begin incorporating income-generating assets such as bonds and dividend paying stocks to create a balanced portfolio. Approaching retirement, shift to lower-risk investments, such as bonds or dividend-focused funds, for a steady income stream with reduced volatility.
POSB offers investment solutions for every stage. Early career investors can start small with the POSB Invest-Saver, a regular saving plan that lets you invest a fixed sum regularly, mid-career individuals may benefit from the digiPortfolio for diversified growth, while the Retirement digiPortfolio is designed to support investors across different life stages, automatically adjusting your risk levels as you age and approach retirement.
Regularly reviewing and adjusting your portfolio keeps it aligned with your evolving goals, helping you stay on the path to financial security.
The Long-Term Mindset – Habit #4: Plan for Retirement
Retirement planning combines saving, protecting, and investing to create a secure future. Financially savvy people understand that planning for retirement is a continuous journey, beginning early and evolving with each life stage.
In the early years, focus on accumulation by making small, consistent contributions to retirement accounts. Compounding allows even modest investments to grow significantly over time. Mid-career, increasing financial commitments for housing and education make this a critical time to evaluate your retirement progress and adjust contributions as needed. Balancing expenses for ageing parents and young dependants can be challenging, but raising contributions now can bridge any savings gaps.
As retirement nears, shift focus to preserving capital and planning for withdrawals (decumulation). Assess your income needs, including CPF LIFE payouts, personal savings, and investment returns, to ensure a sustainable retirement strategy. Options like annuities or dividend-focused investments can provide a steady income. Regularly revisiting your retirement plan ensures it aligns with your changing needs and goals.
With technology, managing your finances has become easier. Log into your DBS/POSB digibank app and tap on Plan for a comprehensive financial overview. By connecting to SGFinDex through SingPass, you can consolidate data from CPF, CDP, HDB, IRAS, and insurers in one place, gaining clearer insights. Plan on digibank provides customised insights, identifies coverage and investment gaps, and even projects cash flow for future planning.
To complement these tools, POSB Wealth Planning Managers (WPM) are available to guide you through every phase of retirement planning. They offer tailored advice and solutions—from compounding accounts to income-focused products – that align with your goals. Today, 8 in 10 POSB retail customers already have access to their own personal WPM, supporting them from their first paycheck to retirement. You can contact your Wealth Planning Manager by heading to the Plan section on digibank, navigating to the Insure, Invest, Retire tab, and scrolling down. Alternatively, connect via the following form: Let’s Chat | POSB Singapore.
Conclusion
Building wealth is a journey that evolves with each life stage, guided by four essential money habits: Save, Protect, Grow, and Retire. By integrating these habits into your financial plan, you create a strong foundation in your early years, grow and safeguard your wealth mid-career, and ensure a comfortable, well-prepared retirement. Each stage has unique needs, and tailoring these habits to align with your life goals allows you to make informed, confident financial decisions.
Whether you’re just starting your career or preparing for retirement, POSB’s money habits and resources are here to support you at every step. Anyone can build a financially secure future that aligns with their personal goals and aspirations. Start today, and let these good money habits be your roadmap to a lifetime of financial success.
Ready to build better money habits? Start your journey with the POSB Money Habits Tracker and transform your finances.
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The content here is for informational purposes only and should NOT be taken as legal, business, tax, or investment advice. It does NOT constitute an offer or solicitation to purchase any investment or a recommendation to buy or sell a security. In fact, the content is not directed to any investor or potential investor and may not be used to evaluate or make any investment. Do note that this is not financial advice. If you are in doubt as to the action you should take, please consult your stock broker or financial advisor.
Disclosure: This post is sponsored by POSB. All views and opinions expressed in this post are from Dr Wealth.
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Investments
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i. a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, “MiFID II”); or
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