Having spoken to quite a few friends and relatives on financial planning made me realize something which I had never cross my mind before until now. When speaking to many especially those in their 20s about financial planning in the area of self protection or retirement planning the answer I got was "Nope I am too young to start on all these". But like most financial decisions, it isn’t right or wrong to whether should you start when you are in your 20s or 30s or even 40s.

Of cos if you are still in your 20s, living alone without any dependents doing this sort of financial planning might seem to be a waste of money. After all why do you need to do any planning since there is no one dependent on you and you are free to spend your hard earn money as you like. This is correct but I will like to share a very  interesting yet often forgotten fact about financial planning that will put people who wait till they are older before doing such planning.

It may be difficult for those in their 20s, 30s and even for some in their 40s to think realistically about financial planning. But for those in their 50s or even 60s, the deadline to have some sort of planning worked out for them is very very near as these people are coming close to their end of career and when that happen they will lose their main source of income. Imagine if you are to retire tomorrow and you realize that you do not have any protection in the even you strike with any Critical Illness when you retire, or you do not have any saving that will last you thru your retirement years (which can easily be between 15 to 25 years)... Dun sound too good right.

Starting early to plan your finances also have another advantage and this advantage is pretty common sense. This advantage is the cost of premium. In the personal financial industry, the older and less healthy you are, the more you pay for in term of premium. 

Take for example, a 45 years old man with slight high blood pressure, trying to get a retirement plan of about SGD$100,000 with critical illness coverage (till his retirement at age 65). He will have to pay an annual premium of abt SGD$6000 for a period of 20 years. A 25 years old man on the other hand with no medical conditions trying to get the same retirement plan of SGD$100,000 with critical illness coverage (till his retirement at age 65) will have to pay an annual premium of abt SGD$2000 for a period of 40 years.

Taking the above as a simple example, the 45 years old man will have to pay a total of SGD$120,000 while the 20 years old man will have to pay a total of SGD$80,000, both till age 65. So for the younger man he enjoy a nice saving of SGD$40,000 while both achieving the same goal.

Having said all these guess you should have know that by starting early not only do you save more, but it is actually less stressful for you as you know that you have something already planned out for you. But do understand that if you had not started any planning yet it’s never too early or too late to plan for your finances. Plan for your future by making preparations now, regardless of your age!

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