How Future Planning Helps Your Mental Health in the Present
If you’ve ever felt a knot of worry in your stomach, a nagging voice whispering "what ifs" in your ear, and a mild anxiety over what the future holds, you’re not alone. That's the burden of uncertainty, a significant contributor to stress and anxiety, and according to a 2022 report by Cigna International, 86% of Singaporeans are feeling that same stress.
Future planning, particularly focusing on financial security, can be a powerful antidote. By taking control of your finances, you're alleviating present anxieties and building a foundation for a more peaceful future.
This blog will explore the key areas where future planning can improve your mental well-being. First up, let's explore the comfort that financial security brings.
1. The Comfort of Financial Security
Financial security is more than just having enough money in the bank. It's a feeling of stability that comes with knowing you can manage your day-to-day expenses, handle unexpected expenses, and plan for future goals without constant worry.
The difference between having to prioritise bill payments and making your core expenses with a safety net in place all boils down to financial security. This sense of security allows you to focus on living your life to the fullest, free from the constant strain of financial anxieties.
2. The Role of Insurance in Future Planning
Insurance plays a vital role in future planning by mitigating risks and providing a financial safety net. Whether it's health insurance to safeguard against unexpected medical bills, or life insurance to protect loved ones in case of your passing, these plans offer invaluable peace of mind.
Imagine this: You're going about your daily routine when you experience sudden, severe abdominal pain. After visiting the doctor, you're diagnosed with appendicitis and require emergency surgery. In cases like this, having health insurance, like Enhanced IncomeShield, for instance, can significantly reduce these costs by reimbursing pre- and post-hospitalisation expenses1,2, for eligible medical treatment up to 100 days before and after hospitalisation. And by paying it out from your MediSave account, you don’t have to worry about eating into your emergency funds.
Such contingencies allow you to focus on getting well without the added pressure of financial worry, protecting your loved ones financially if the unthinkable happens.
3. Creating a Financial Safety Net
An emergency fund, often referred to as your "rainy day fund," is indispensable in your future planning strategy. This readily accessible pool of money acts as a financial buffer against unexpected events like car repairs, job loss, or appliance breakdowns.
Here are some practical financial budgeting steps to get you started, regardless of your income level:
- Track Your Expenses: Understanding where your money goes is the first step. Track your spending for a month to identify areas for potential savings.
- Start Small, Be Consistent: Even a small amount saved regularly can grow over time. Begin with a realistic, achievable contribution and gradually increase as your situation allows.
- Set a Realistic Goal: Aim for 3-6 months' worth of living expenses, starting small and gradually increasing.
- Automate Your Savings: Set up an automatic transfer from your checking account to your emergency fund. This "set it and forget it" approach ensures consistent savings.
- Explore High-Yield Savings Accounts: Consider parking your emergency fund in a high-yield savings account to maximise potential returns while maintaining easy access to your funds.
4. Retirement Planning for Peace of Mind
Do you have a rough idea of what your retirement looks like? It doesn't have to be down to the last detail, but simply having a vision of your future can reduce present anxieties.
Early retirement planning can help with long-term mental well-being. Knowing you're proactively building a secure future can alleviate the burden of uncertainty and allow you to focus on enjoying the present.
Insurance savings plans that lean more toward retirement savings, like Income's Gro Retire Flex Pro II, play a crucial role in achieving a comfortable and financially secure retirement. Retirement-focused Insurance savings plans offer a systematic and disciplined approach to saving for your golden years. With Gro Retire Flex Pro II, for instance, you can choose your premium payment terms and payout period to suit your budget and retirement needs, and enjoy a steady stream of income when you retire.
- Receive monthly cash payouts3 during your retirement, providing an illustrated total yield at maturity of up to 4.08% p.a.4,5.
- You may choose to adjust when your cash payouts3 begin by up to 5 years6,7 if you decide to retire earlier or later.
5. Estate Planning and Its Psychological Benefits
Estate planning is more than a numbers game; it's about peace of mind.
By creating a clear plan for your assets, you're ensuring your loved ones are financially secure in your absence. Knowing your family will be financially protected in your absence can bring immense peace of mind, allowing you to focus on cherishing the present moments with your family.
Whole life insurance and term life insurance policies can play a crucial role in estate planning, especially when it comes to managing outstanding mortgages or home renovation costs. Products like Income's Mortgage Term Life Insurance can offer valuable financial protection for your loved ones:
- Cover the outstanding balance of your mortgage loan in the event of death, total and permanent disability (TPD before age 70), or terminal illness.
- Choose to be covered on this plan from 5 to 35 years depending on the number of remaining years for your mortgage loan.
The Power of Early and Informed Financial Decisions
The benefits of taking charge of your financial future go beyond just accumulating wealth. Early and informed financial planning has a compounding effect on your mental well-being. By proactively addressing your financial needs and goals, you can reduce stress and anxiety, allowing you to focus on living life to the fullest.
Take the first step towards peace of mind and build confidence in your financial future with us—speak to an Income advisor today to create a personalised financial plan that meets your unique needs and goals.
1 Subject to precise terms, conditions and exclusions specified in the policy contract for Enhanced IncomeShield and riders.
2 Pre-hospitalisation and post-hospitalisation treatment are not covered for treatment given before or after inpatient psychiatric treatment benefit, accident inpatient dental treatment or emergency overseas treatment. Pre-hospitalisation and post-hospitalisation treatment are also not payable if the inpatient hospital treatment received during the stay in hospital are not payable. Post-hospitalisation treatment such as medications purchased during a post-hospitalisation period when the treatment is not used during the same post-hospitalisation period is not payable.
3 The cash payout consists of a monthly cash benefit and a non-guaranteed cash bonus.
4 This is for illustration purposes only. The total yield at maturity is not guaranteed and is based on the assumption that the Life Participating Fund earns a long-term average return of 4.25% per annum for a male non-smoker, aged 40, who chooses a retirement age of 70, a payout period of 20 years and pays a single premium. It is also based on the assumption that all cash benefits and non-guaranteed cash bonuses due for the entire policy term are paid out to the policyholder. Based on the illustrated investment rate of 3.00% per annum, the total yield at maturity will be up to 2.97% per annum.
5 The figures in the illustration are not guaranteed and are illustrated based on the assumption that the Life Participating Fund earns a long-term average return of 4.25% per annum in the future. Returns are illustrated based on estimated bonus rates that are not guaranteed. The actual benefit payable will vary according to the future performance of the Life Participating Fund. The calculation for the illustrated total yield at maturity also assumes that all cash benefits and non-guaranteed cash bonuses due for the entire policy term are paid out to the policyholder.
6 The policyholder may choose to shorten or extend the accumulation period, by up to 5 years, in multiples of 1 year.
The request to exercise this option must be made on a date:
a) At least 2 years after the policy entry date; and
b) At least 2 years before the end of your original or revised accumulation period, whichever is earlier.
Other terms apply for this benefit. Please refer to the policy conditions for further details.
7 Please note that your policy benefits (including cash benefits, death benefit and surrender value), bonuses (if any) and riders (if any) may change if you change the accumulation period and/or payout period. You may request your financial advisor representative to generate the policy illustration for a different accumulation period and payout period to understand the changes in the policy benefits.
This article is meant purely for informational purposes and does not constitute an offer, recommendation, solicitation or advise to buy or sell any product(s). It should not be relied upon as financial advice. The precise terms, conditions and exclusions of any Income Insurance products mentioned are specified in their respective policy contracts. Please seek independent financial advice before making any decision.
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 Income Insurance or visit the GIA/LIA or SDIC websites (www.gia.org.sg or www.lia.org.sg or www.sdic.org.sg).
This advertisement has not been reviewed by the Monetary Authority of Singapore.
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