3 Reasons why you should take action to save and invest for your future

Do you worry about your standard of living when you retire? How much money do you need to live the life you desire? How much money is enough? If you do not have any figures in your mind, it is a warning signal. Once you recognize you are not saving enough for the future, voluntary savings may be a way out.  

Voluntary saving and investing can be done as per the needs and requirements of your family. There are many ways to save, including depositing in banks, buying stocks, bonds, mutual funds, or within the MPF system you can make tax-deductible voluntary contributions (TVC) or special voluntary contributions (SVC) that provide you flexibility in managing your assets. Different institutions or investment choices have various features.

MPF alone may not be sufficient enough for a quality retirement life

MPFs help the employed save for retirement. However, your MPF alone may not be sufficient for a happy retirement because everyone has different expectations on their retirement activities. In addition, people are generally living longer due to better healthcare and would need a larger nest egg to ensure they don’t outlive their savings. You should think about making voluntary top-ups to your MPF, or look at other retirement investments.

Allow time to work for you, make the compound interest work its wonder

Compound interest effect refers to the process whereby interest is credited to an existing principal amount which may create a higher asset balance for future interest to be applied to. This vastly increases the duration that compounding interest will work for you and could potentially increase your savings value in the long run. The sooner you kick start your voluntary savings, the higher chance you will have to enjoy the outcome.

Voluntary saving can be your emergency fund

Life is full of uncertainties. For example pandemic, unemployment, or reduced incomes happen when we least expect it and may greatly disrupt your financial situation. People sometimes have to borrow in these situations to make ends meet. Therefore, voluntary savings can also be used as your emergency fund to help solve urgent needs for you and your family.

Review your financial circumstances and study the different voluntary saving products on the market. Leaving everything to the last minute may limit the options available to you to create the financial outcome you desire. The next article on "Principal Investor Education" will discuss various methods of voluntary savings in detail.

Investment involves risks. This information is for general reference only.