By Kelvin Ng (guest contributor)
I see many articles on retirement planning and I started to think about how can one really plan for retirement in today’s volatile business environment. A while back I read that Eastman Kodak had filed for bankruptcy. This was one of America’s most notable companies and had a long history. Years of poor performances led them to lay off 47,000 employees and closing 13 factories. I remembered making a sales call to them back in 2008 at their Singapore office in Lorong Chuan. I am not sure if they are still around now, but this is a reality check that even if you plan for retirement, things which are beyond your control could happen.
We depend on our day job for income, which is needed for expenses, payments and retirement planning. I am not sure how many Singaporeans can have $100,000 of passive income per year, but to be pragmatic, we need our day job to keep us going before we retire. And for this, we need to work till we are in our fifties at least (unless you are a super high flier, then you can retire in your forties).
I had survived two retrenchments in the past and had seen many of my colleagues being laid off. It is a part of life in Singapore. We cannot escape this, but we must find a way to deal with it, manage it and survive.
How to survive?
After job hopping in my earlier years, I realized that working in Multinational companies (MNC) that have consistent profit, good cash flow, low debt and were conservative in nature is a good choice. Usually, these companies will survive during downturns. Some MNCs have subsidiary companies, and when things go wrong, they might still provide you a back-up plan to find a post there.
If your company has some key products to sell, there is a chance that if it collapses, there might be competitors that are willing to buy over the firm. And if your skills are needed, you will end up with the new company (but usually with a pay cut).
Lastly in the worst case scenario, most MNCs offer retrenchment benefits. If you stay long enough, you will get a substantial amount of severance package. My experience with local companies has been brief thus I cannot comment much on them.
Staying in a job till you are in your fifties
I look around my office and I hardly see people in their fifties working, apart from the Directors, Vice Presidents and some managers. I started to wonder why, and I can come to a possible conclusion that only people in the top 5% of an organization can survive till they are in their fifties.
If I am in my fifties, can I continue to work at my current job? The answer is no. My personal take is that if we want to continue working till we are in our fifties, we need to move up, or we have to move out. The only way is to ensure your career progression is in place.
My top tips to surviving in your job till retirement
So if we work at the right company, excel in our job, show value, move up the ladder, work till we have saved or invested a sufficient amount to live off, then we can probably retire comfortably.
My top ten ways to survive in a job till you are in your fifties and plan for retirement:
1. Join the right company
2. Excel in your role
3. Show value in your job
4. Move up the ladder
5. Be in top 5% in the organization
6. Ensure your company has retrenchment or retirement benefits
7. Save and invest to beat inflation and plan for retirement
8. Eliminate debt
9. Have passive income
10. Buy Toto and win (I mean work for Singapore Pools, they will never go bust – just kidding)
What other tips do you have to survive in your job till you can retire? Share them in the comments below!
By guest contributor Guru, who has been investing since 2007 and blogs at Personal Finance Master. Posted via www.MoneyMatters.sg, your guide on how to make more money, save smarter, invest intelligently, and enjoy your money like a pro. Click here to get our free report on what you must know about financial freedom.