You don’t need to wait until you are older to start preparing for the future. Many twenty-somethings make the mistake of postponing planning for the future because they think they do not have enough money. But the best time to start is as early as possible, ideally once you start working.
Retirement planning for young adults takes into account the fact that they might have limited funds, and also takes advantage of the longer time horizon due to their young age.
Recent economic uncertainty has made it all the more crucial to prepare for the future. Whether you just clinched your first job offer or have already been working for a few years, here is how to get started on your journey.
As a young investor, it is important to start investing consistently1 even if you may not have large amounts of cash to devote to your investments. Investments need time to potentially grow, so your young age is actually a great advantage. Putting aside a small amount each month is preferable to waiting years until you can accumulate a large sum of cash.
Victor is a 25-year-old programmer at a local start-up. He has just started working after graduating from university. His take-home salary is currently S$3,000, and he spends about S$2,000 of it every month.
Having seen how hard his parents work despite their advancing years, Victor is determined to ensure that he is adequately prepared for the future. He realises that he needs to start as soon as possible.
After careful deliberation, Victor decides to buy Manulife’s ManuInvest Duo plan2. Then, he sets aside S$150 each month to pay premiums for this insurance plan.
Some of Victor’s friends marvel that he is able to commit to paying monthly premiums for an insurance plan at such a young age. But to Victor, this is not a problem. Since ManuInvest Duo plan offers partial withdrawal3 and premium flexibility4 benefits, he knows that he can make withdrawals or pause his premiums in times of emergency.
After 5 years of working, Victor decides to take a sabbatical of 6 months to volunteer for a local charity organisation, a lifelong dream of his. His boss is happy to grant him the sabbatical after so many years of loyal service. As he will be living off his savings during his sabbatical, he pauses the premiums4 on his ManuInvest Duo plan for 6 months.
Greatly enriched by his volunteer work, Victor returns to work after 6 months. Slowly but surely, life goes back to normal. He returns to work and restarts payment of his ManuInvest Duo premiums.
Victor continues to enjoy steady career progress and is promoted to IT manager at the age of 31.
Shortly after his promotion, his father meets with a traffic accident and has to be rushed to the hospital. His father’s medical insurance covers most of his medical costs, but he will not able to work for the next 6 months.
As a result, Victor has to step in and offer financial support to the household. His costs include looking after his parents and two younger siblings, who are still in university.
In order to stay afloat financially, Victor decides to withdraw3 from his ManuInvest Duo plan. He has avoided withdrawing from his insurance plan until this point. But he decides to make an exception as this is an emergency.
Thankfully, his father makes a speedy recovery and Victor’s family emerges more united after the ordeal.
The years go by, and Victor’s professional and financial life sees steady progress. At the age of 45, he is now IT director at a multinational company.
After so many years of hard work, Victor is craving a slower and more peaceful life. Truth be told, he is no longer working as hard as he used to and is even thinking of enjoying an early retirement.
He decides to do a fund switch to a dividend-paying fund to enjoy a steady stream of income5.
Victor is only 45, and many of his peers have not even started planning for retirement yet. But because Victor started retirement planning as a young adult, he already has passive income5 for an early retirement.
Victor goes through many ups and downs in his life, from his first foray into buying his first insurance plan as a young adult, to enjoying a passive income at the young age of 45. One of the things he did right was to choose a plan that was flexible enough to adapt to his many life changes.
Manulife’s ManuInvest Duo is an investment-linked plan that is ideal for young adults. Premiums for ManuInvest Duo – 20 years, can be as low as S$150 a month, which is equivalent to just S$5 a day, the cost of a coffee or a food court meal. That is a small price to pay for a stream of retirement income5 in the future.
ManuInvest Duo is suitable for young people who wish to start buying an ILP as soon as possible using aThis method involves regularly investing a fixed amount of money regardless of market conditions. By starting at a young age, one may possible to ride out the market fluctuations to enjoy potential growth in the long term.
ManuInvest Duo also gives you the option to make your investment work harder if you wish by adjusting the proportion of your premiums to be invested in the various underlying funds being offered.
At the same time, the plan offers insurance protection in the event of death, terminal illness and total and permanent disability and gives you the peace of mind in knowing that your parents will be financially supported if something should happen.
2. ManuInvest Duo – 20 years, please visit the product page for more information.
3. From policy year 6, up to 20% of total basic premiums and top-up premiums paid in the previous policy year can be accessed at a low transaction fee of S$50
4. Premium Flexibility Benefit refers to the total amount of regular basic premium that can be missed without incurring a premium shortfall charge. This benefit starts from policy year 6 until the end of Minimum Investment Period, subject to a maximum limit of 2 years of annualised premium for 10 years Minimum Investment Period, 3 years of annualized premium for 15 years Minimum Investment Period, and 4 years of annualised premium for 20 years Minimum Investment Period
These insurance products are underwritten by Manulife (Singapore) Pte. Ltd. (Reg. No. 198002116D). This advertisement has not been reviewed by the Monetary Authority of Singapore. Buying a life insurance policy is a long-term commitment. There may be high costs involved if you terminate the policy early, and your policy's surrender value (if any) may be zero or less than the total premiums paid. Buying health insurance products that are unsuitable for you may affect your ability to finance your future healthcare needs. Your investments are subject to investment risks, and you may lose the principal amount invested. The performance of the ILP sub-fund is not guaranteed. The value of the units in the ILP sub-fund and the accumulated income (if any) may fall or rise. This article is for your information only and does not consider your specific investment objectives, financial situation or needs. It is not a contract of insurance and is not intended as an offer or recommendation to purchase the plan. You can find the full terms and conditions, details, and exclusions for the mentioned insurance product(s) in the policy contract.
These policies are protected under the Policy Owners’ Protection Scheme which is administered by the Singapore Deposit Insurance Corporation (SDIC). Coverage for your policy is automatic and no further action is required from you. For more information on the types of benefits that are covered under the scheme as well as the limits of coverage, where applicable, please contact us or visit the LIA or SDIC web-sites ( or ).
We recommend that you seek advice from a Manulife Financial Consultant or its Appointed Distributors before making a commitment to purchase a policy.
Information is correct as of 30 September 2020