Retirees' financial Nip/Tuck

Retirees' financial Nip/Tuck

SINGAPORE - Soon after he retired as a financial system support executive in 2007, Mr Koh T.L. and his wife flew to Perth, Australia, to stay with their daughter, who was studying there.

"It was a last-minute decision," says Mr Koh, now 64.

The couple enjoyed themselves so much that they extended the trip from a few months to almost a year.

They put up in a rented house with their daughter and ate at restaurants. On weekends and long holidays, they toured the countryside and other towns and often stayed overnight in motels and holiday chalets.

The total bill that year came to about $40,000 to $50,000, much more than what Mr Koh had expected to spend in his first year of retirement. It was about twice the expenses in his last year of working.

But the experience was worth it, he says.

Mr Koh, who has been working since he graduated from polytechnic when he was 17 years old, says: "My wife and I never had a chance to immerse ourselves in a different lifestyle and culture."

Mr Eddy Cheong, head of financial planning at Providend, a financial planning firm, says it is not surprising for retirees to spend freely in their first year of retirement. He says: "Retirement is like going to this longawaited exotic holiday destination. All the 30 to 40 years of a person's working life, he has been preparing for this.

"It's often the time when his wealth, in terms of savings and investments, has reached its peak. And he just wants to reward himself with extended holidays or other purchases."

Moreover, in his experience, most people refuse to believe they might live quite long and so in the first few years of retirement, people tend to be more easy with their money.

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