That assumption is the single largest unfunded liability in Singaporean retirement planning. Here is why — and what to do about it.

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Part One: How We Got Here

To understand where your premiums are going, you have to understand how the system was built.

2005 — The “as charged” revolution. Aviva brought the first “as charged” Integrated Shield Plan to Singapore in 2005, removing the inner limits that had previously capped what could be claimed for each procedure. Later, it extended as-charged coverage to outpatient dialysis and cancer treatment.

Competitors matched within months. Inner limits — the old discipline mechanism — largely disappeared for private-hospital plans. It was a genuine breakthrough for policyholders — and it also removed the ceiling on what a hospital bill could be.

Other insurers enhanced their plans with richer benefits, longer pre- and post-hospitalisation coverage and access to private hospitals.

Consumers benefited tremendously.

However, richer benefits also meant that patients became less sensitive to healthcare costs, while hospitals and specialists invested in newer technology and increasingly sophisticated treatments.

2007–2015 — full riders and the buffet problem

Insurers layered on riders covering both deductible and co-insurance, producing near-zero out-of-pocket hospitalisation. Senior Minister of State Chee Hong Tat later described this as a “buffet syndrome,” leading to over-consumption, over-servicing and over-charging. Insurers then layered on riders that absorbed the deductible and co-insurance entirely. Hospitalisation became, functionally, free.

Medical inflation accelerated.

The data eventually proved him right. Between 2015 and 2020, claims incidence grew at a compound annual rate of about 15% for full riders on private hospital plans. For riders with some co-payment, that figure was close to zero. Average bill sizes on full-rider claims ran at least 20% higher.

2015 — MediShield Life. The national scheme became universal and lifelong, covering all Singaporeans and PRs including those with pre-existing conditions, who pay a 30% additional premium for the first ten years. The catastrophic layer was nationalised. The layers above it stayed private — and stayed exposed.

2016 — Health Insurance Task Force, which recommended fee benchmarks, panel networks, pre-authorisation and co-payment. This set the policy direction for everything after.

2018 — The first correction.
MOH mandated a minimum 5% co-payment on all new riders, capped at S$3,000 per policy year. Full riders stopped being sold. Existing ones were grandfathered, creating a closed block of the highest-utilising policyholders that insurers could no longer re-underwrite — only reprice.

The data justifying it: between 2015 and 2020, the compound annual growth rate of claims incidence was about 15% for full riders of private hospital IPs and about 9% for restructured hospital IP full riders, versus close to 0% for riders with some co-payment. Average bill size for full-rider claims was at least 20% higher.

2018 onwards — fee benchmarks, panels, claims-based pricing
Insurers rolled out preferred panels, pre-authorisation, and claims-based pricing. Under claims-based pricing, rider premiums at renewal are adjusted based on claims in the previous policy year — with steeper loading for non-panel claims

COVID-19 and the New Reality of Medical Inflation

Between 2020 and 2022, two forces collided to push medical costs sharply higher: global inflation and a backlog of elective surgeries. When restrictions eased, hospitals faced a surge of postponed procedures at the same time supply costs, staffing, and equipment prices were climbing worldwide. The result was a jump in healthcare utilisation and claims that insurers — and ultimately policyholders — are still feeling today.

2021–2023 — The Cancer Drug List.
From September 2022, MediShield Life and MediSave covered only cancer treatments on an approved list. From April 2023, the same applied to Integrated Shield Plans. Previously, most IPs had covered outpatient cancer drugs “as charged” against policy limits that could exceed S$2 million. That is a very large door that has now closed.

April 2025 — MediShield Life enhanced.
Annual claim limit raised from S$150,000 to S$200,000, with higher limits for daily charges, surgery and intensive care. Premiums rise by up to 35%, phased over three years to March 2028, averaging 22% per policyholder. The outpatient deductible arrives 1 June 2026, with the second phase of the inpatient deductible increase on 1 April 2027. The Government is putting S$4.1 billion behind cushioning it.

April 2026 — The second correction.
New IP riders can no longer cover the minimum deductible, which ranges from S$1,500 to S$3,500 depending on ward class. The co-payment cap doubles from S$3,000 to S$6,000. New private hospital riders are roughly 30% cheaper as a result — because they cover roughly 30% less.

Why Premiums Continue to Rise

Several factors now work together.

• Singapore has one of the fastest ageing populations in Asia.
• New medical technology improves outcomes but is more expensive.
• Cancer drugs and biologic therapies can cost tens of thousands of dollars.
• Hospital operating costs continue to increase.
• Doctors and specialists command higher professional fees.
• Medical inflation has consistently exceeded general inflation.

To ensure long-term sustainability, MOH introduced several reforms, including mandatory co-payments for riders, specialist panels, fee benchmarks and tighter reimbursement rules for cancer treatments.

These measures help slow rising claims, but they cannot eliminate medical inflation.

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Part Two: The Escalation, In Numbers

Two different numbers get quoted in this conversation, and confusing them is where most planning goes wrong.

The consumer number. Singapore’s CPI-Healthcare rose 59.1% between 2005 and 2025 — a compound rate of about 2.35% a year, modestly ahead of headline inflation at 2.14%. That sounds manageable. It is also the number that lulls people into complacency.

The insurance number. Medical trend rates — what it actually costs to insure a population, factoring in utilisation, treatment intensity and new therapies — tell a different story. Aon forecast an 11.1% rise across Asia-Pacific for 2025. Mercer Marsh Benefits forecast 12.5% for Asia in 2026, the sixth consecutive year of double-digit trends. The Life Insurance Association Singapore has pointed to Singapore medical costs rising 16.9% in 2026.

The gap between 2.35% and 12% is not a rounding error. It is the difference between a retirement plan that holds and one that doesn’t.

Why the divergence? CPI measures the price of a consultation. Medical trend measures the cost of treating a person — and we are consuming more scans, more procedures, more biologics, and living longer with more chronic conditions while doing it. Your premium is priced off the second number, not the first.

There is a second escalator working alongside it: you also get older. Integrated Shield premiums step up sharply by age band, independently of inflation. A 45-year-old is not simply paying today’s premium plus inflation at 65 — they are paying the 65-year-old premium, inflated for twenty years of medical trend. Two multipliers, stacked.

What that looks like on a real rate card

Let me put actual numbers to it, because the abstraction does not land the way the arithmetic does.

Take a 35-year-old on a private-hospital Integrated Shield Plan with a rider — the standard arrangement for a working professional in Singapore. The figures below are the cash portion of the annual premium, taken from a major insurer’s published 2026 rate card. Not projections. Not estimates. What the table says today.

That is a 22.6-fold increase — and not a single dollar of medical inflation has been applied to it.

This is the number that breaks retirement plans. Nobody budgets a line item that grows twenty-two-fold. People anchor on what they pay today, quietly assume it drifts up with general inflation, and build a retirement number on that assumption.

Two features of this table deserve attention.

First, the shape. The cost does not rise smoothly. It is flat-ish through your thirties and forties, steepens through your fifties and sixties, and accelerates hardest after seventy. Across the full span from 35 to 85, 64% of the total cash cost falls after age 71 — in the fifteen years when employment income has ended and MediSave contributions have stopped.

Second, the cash. MediSave carries the MediShield Life portion and part of the plan premium, but rider premiums must be paid in cash, always. On a private-hospital arrangement, MediSave covers only about a fifth of the lifetime bill. The remainder comes from your pocket, every year, for as long as you live.

Add the two escalators together and the totals are sobering. Summed across ages 35 to 85 at today’s rates, that private-hospital arrangement costs roughly S$331,000 in cash. Apply even a modest 4% annual repricing — well below the medical trend rates cited above, and insurers do reprice — and the lifetime cash figure approaches S$1.5 million.

Figures derived from a major Singapore insurer’s published premium rates effective 1 April 2026, for a standard life on a private-hospital plan with rider, excluding any no-claims discount. Premium rates are not guaranteed and may be revised by the insurer. Your own figures will differ by insurer, plan, ward class, health status and claims history.

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Part Three: The Retirement Planning Implications

Here is the uncomfortable arithmetic.

1. Your medical premium is a lifetime liability, not an annual expense.

Most people budget for their Shield plan the way they budget for a mobile plan — a monthly line item. But you will pay this premium every year for the rest of your life, and it will grow faster than your CPF LIFE payout, faster than your bond coupons, and faster than most people’s dividend income.

The table above makes the scale of it concrete. The S$12,178 a year at 75 is the figure worth sitting with — not because it is unaffordable, but because it has to come from somewhere, and in most plans I review, nothing has been set aside for it.

MediSave helps, but MediSave withdrawal limits are fixed dollar amounts that do not index — S$300, S$600 and S$900 a year depending on age — while the premium climbs. And MediSave contributions stop when you stop working. Rider premiums must be paid in cash, always. That is a cash obligation running into your eighties and nineties, at a growth rate you do not control.

2. Your out-of-pocket exposure has been deliberately increased.

From April 2026, a private-hospital policyholder on a new rider faces up to S$3,500 in deductible plus up to S$6,000 in co-payment. Around S$9,500 a year of exposure that no rider is legally permitted to absorb. This is by design — MOH is restoring the price signal.

That is manageable at 45 with an income. At 72, on a fixed drawdown, in a year with two admissions, it is a different conversation entirely.

3. The catastrophic layer is covered. The chronic decades are not.

MediShield Life protects you against the S$200,000 event. Retirement healthcare is rarely one large event. It is fifteen years of specialist reviews, medications, scans, day surgeries, physiotherapy, and eventually help with daily living — the accumulation, not the catastrophe. Almost none of that is what a hospital plan was designed for.

4. Non-CDL cancer treatment is now a cash problem.

The Cancer Drug List has done its job in controlling costs. But if the treatment your oncologist recommends sits outside the list, the funding gap falls to your rider, a critical illness policy, or your savings. For a retiree, “your savings” means selling assets at whatever price the market offers that quarter.

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Part Four: What a Sound Plan Actually Looks Like

I do not think the answer is to buy more insurance. I think the answer is to plan for medical costs the way we plan for any other long-duration, inflating liability — deliberately, with the right instrument for each layer.

Layer 1 — Keep the base intact. Never let a Shield plan lapse to save premium. Underwriting is a one-way door; you can always downgrade the ward class or drop to a public-hospital plan, but you cannot buy back health you have since lost.

Layer 2 — Fund the deductible and co-payment deliberately. Ring-fence a dedicated medical reserve, sized to cover several years of the S$9,500 maximum exposure, held in cash or near-cash. Not “I’ll take it from the portfolio.” Take it from a bucket that exists for exactly this.

Layer 3 — Build a retirement medical premium fund. This is the piece almost nobody does. If your Shield and rider premiums at 70 will be several times today’s figure, that liability deserves its own asset, accumulated during your earning years. An endowment, an annuity stream, or a dedicated portfolio sleeve — the vehicle matters less than the earmarking.

Layer 4 — Cover what hospital plans structurally cannot. Critical illness for income replacement and non-CDL treatment. Hospital cash for the days themselves. Long-term care — CareShield Life plus supplements — for the years when the problem is not a hospital at all.

Layer 5 — Review the grandfathered full riders. If you have held a pre-2019 full rider, you are in the block insurers most want to reprice. Whether to stay or switch depends on your age, your health, and whether you would survive fresh underwriting. That is not a decision to make from a marketing email. It is a decision to make with your numbers in front of you.

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The Point

Singapore’s healthcare financing system is one of the best-designed in the world. Every reform since 2018 has moved in one consistent direction: the state guarantees you against catastrophe, and asks you to own the first dollars of your care.

That is sound policy. It is also a transfer of risk — to you, over a retirement that may run thirty years, against a cost curve compounding at double digits.

The plan you built five years ago probably did not price that in. Most didn’t.

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Ready to see your own numbers?

I run a complimentary Financial Clarity Session — a structured review that maps your protection, your projected medical liability, and your retirement drawdown against each other, so you can see exactly where the gaps sit.

No product pitch. Just clarity on where you stand.

Start your Financial Clarity Session →

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Gilbert Koh is an Independent Financial Adviser and MDRT Life Member based in Singapore, representing Avallis Financial. He holds a BBA (Finance) from the National University of Singapore and specialises in protection, wealth accumulation, education and retirement planning for career-progressive Singaporeans and PRs.

Reach him at gilbert@avallis.com

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Sources: Ministry of Health Singapore; CPF Board; Singapore Department of Statistics; Aon 2025 Global Medical Trend Rates Report; Mercer Marsh Benefits 2026 Health Trends; Life Insurance Association Singapore. Figures accurate as at July 2026. This article is for general information and does not constitute financial advice. Please seek advice tailored to your circumstances before making any decision.

Good financial planning in Singapore isn’t about which products you buy — it’s about the order you build things in.

When people think about financial planning, the conversation often revolves around insurance policies, investment portfolios, savings accounts, or retirement plans.

While these are all important, they are not the ultimate goal.

Think of them as building materials.

Bricks, cement, steel and timber are essential for constructing a house—but buying these materials alone doesn’t give you a home. They need to be assembled into a structure that is designed specifically for your family’s needs.

Financial planning works in exactly the same way.

The objective isn’t to accumulate financial products. The objective is to build a financial house that provides security, flexibility and peace of mind throughout your life.

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Every Financial House Begins with a Strong Foundation

No architect would begin building a house by installing the roof.

Everything starts with the foundation.

Likewise, every financial plan should begin by ensuring the basics are in place before pursuing wealth accumulation.

Your financial foundation typically consists of:

• Adequate emergency savings
• Appropriate insurance protection
• Good financial habits
• A realistic budget
• Basic investments that align with your goals
• Estate planning essentials, such as making a Will

Without a solid foundation, even substantial wealth can be vulnerable to unexpected events such as illness, disability, job loss or market downturns.

A strong foundation doesn’t eliminate uncertainty—it helps you withstand it.

Not sure how solid your own foundation is right now? Check where you stand financially with a free, private 8-minute review of your net worth, cashflow, and protection gaps.

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Your Financial House Should Grow with You

Imagine living in the same one-bedroom house after your family has grown to five.

The house hasn’t become “bad”; it has simply become unsuitable.

Many people make the same mistake with their finances.

They purchase insurance in their twenties and never review it.

They start investing but never adjust their portfolio.

They accumulate savings without asking whether those savings are working efficiently.

Life changes—and your financial plan should change with it.

Major life milestones often require a review of your financial house:

• Starting your first career
• Getting married
• Purchasing a home
• Having children
• Receiving a promotion or salary increase
• Starting a business
• Caring for ageing parents
• Approaching retirement

Each milestone brings new responsibilities, opportunities and risks.

A financial plan that served you well five years ago may no longer be appropriate today.

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Building Materials Are Not the House

One of the biggest misconceptions about financial planning is believing that buying more financial products automatically means better planning.

Owning five insurance policies doesn’t necessarily mean you’re well protected.

Having multiple investment accounts doesn’t necessarily mean your investments are aligned with your goals.

Large cash balances don’t always represent financial security if inflation is quietly eroding their purchasing power.

Each financial product should have a clear purpose.

For example:

• Insurance protects against risks that could derail your financial future.
• Savings provide liquidity for emergencies and short-term goals.
• Investments help your wealth grow over the long term.
• CPF plays an important role in retirement, healthcare and housing.
• Estate planning ensures your assets are distributed according to your wishes.

When these pieces work together, they form a financial structure that supports your life—not just a collection of unrelated products.

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As Wealth Grows, So Should Your Planning

Building a larger house isn’t simply about adding more rooms.

The structure also needs stronger support.

Similarly, as your income and wealth increase, financial planning becomes more sophisticated.

The focus gradually shifts from simply accumulating assets to protecting and managing them effectively.

This may include:

• Reviewing insurance coverage to reflect changing responsibilities
• Optimising your investment portfolio
• Planning for retirement income
• Managing taxes efficiently where appropriate
• Preparing your estate for the next generation
• Protecting your family’s long-term financial well-being

At this stage, thoughtful planning often delivers greater value than simply purchasing additional financial products.

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The Ultimate Goal: A Home That Lasts for Generations

For many people, financial success isn’t measured solely by the size of their investment portfolio.

It’s measured by the opportunities they create for their loved ones.

A well-designed financial house provides:

• Security during life’s uncertainties
• Confidence to pursue meaningful goals
• Financial independence in retirement
• Protection for the people who depend on you
• A legacy that benefits future generations

Just as a well-built home shelters multiple generations, a well-structured financial plan can continue supporting your family long after you’re gone.

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Is It Time to Renovate Your Financial House?

Ask yourself these questions:

• Has your income changed significantly over the past few years?
• Have you recently married, had children or purchased a home?
• Is your insurance still appropriate for your current responsibilities?
• Are your investments aligned with your long-term objectives?
• Have you started planning for retirement and your legacy?
• If something unexpected happened tomorrow, would your financial house protect your family?

If you answered “no” or “I’m not sure” to any of these questions, it may be time for a review.

Just as we maintain and renovate our homes over time, our financial plans deserve regular attention to ensure they continue serving our changing needs.

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Build Your Financial House with Confidence

Financial planning isn’t about collecting policies or chasing investment returns.

It’s about building a financial house that is designed for your unique goals, adapts to life’s milestones, and provides lasting security for the people who matter most.

Whether you’re laying your financial foundation, expanding your house as your family grows, or preparing to leave a lasting legacy, every stage deserves thoughtful planning.

If you’d like an objective review of whether your financial house is still the right size for your current stage of life, I’d be happy to have a complimentary, no-obligation discussion.

Setting financial goals in Singapore usually starts with a number — but the number only means something once you know what it’s actually for.

Ask most people why they work so hard, and they’ll give you a number. A salary. A bonus target. A savings goal. But ask them why that number matters, and the conversation changes completely.

That’s the question I put to my clients before we ever talk about insurance, investments, or retirement accounts: what does money mean to you?

“Money is a means, not an end. The real question is not how much you have, but what you want it to do for you.”

It’s not a rhetorical question. In close to two decades of sitting across the table from Singaporeans and PRs building their careers and their families, I’ve found that almost everyone’s answer falls into one — or several — of six themes. Recognising which ones matter most to you is the real starting point of financial planning. Everything else, from your CPF strategy to your insurance portfolio, is just the mechanism for getting there.

Here are the six, and why each one deserves more thought than most of us give it.

1. Security and independence — so life’s curveballs never derail you

Singapore rewards the career-progressive. Promotions, bonuses, a steadily climbing income — it’s easy to feel like the upward trajectory will simply continue. Until it doesn’t. A retrenchment. A medical scare. A parent who suddenly needs care. None of these send a calendar invite.

Financial security isn’t about assuming the worst will happen. It’s about making sure that if it does, it costs you money and time — not your family’s future. A proper safety net, sized to your real expenses and dependents rather than a generic rule of thumb, buys you something no salary can: the ability to make decisions from a position of strength rather than panic.

2. Giving your child the best start in life

Every parent I meet says some version of the same thing: “I don’t need much for myself, but I want to give my child every opportunity.” That instinct is universal — but in Singapore, it collides with a very specific reality: education costs that climb steeply, especially if university, overseas study, or enrichment is part of the plan.

The parents who feel calm about this aren’t necessarily the highest earners. They’re the ones who started early, let compounding do the heavy lifting, and built a plan that doesn’t require raiding their own retirement savings to fund it. The earlier this conversation happens, the gentler the numbers are.

3. Enjoying the best of life with the people you love

Somewhere between “build wealth” and “retire comfortably,” it’s easy to forget that money’s actual job is to fund a life worth living — the family trips, the good meals, the ability to say yes to things without checking your bank balance first.

Whether it’s family holidays, celebrating milestones, pursuing hobbies or simply spending quality time together, financial planning helps ensure that you can create lasting memories without constantly worrying about finances.

After all, the experiences we share with our families often become our most treasured possessions.

4. Retiring on your terms — early, or exactly as you picture it

“Retirement” means different things to different people. For some, it’s stopping work entirely at 55. For others, it’s having the option to scale back, consult, or pursue something meaningful without worrying about income. Neither is right or wrong — but both require knowing your number, and working backwards from it decades in advance.

CPF LIFE forms a solid foundation for most Singaporeans, but it was never designed to fund an early retirement or a particular lifestyle — it’s a baseline, not a plan. The gap between that baseline and the retirement you actually want is exactly what a personal accumulation strategy is for.

5. Fuelling the causes you believe in

For a meaningful number of my clients, wealth isn’t purely personal — it’s a means of supporting causes, communities, or people beyond their immediate family. This is often the goal people mention last, almost apologetically, as if it’s a luxury to plan for rather than a fundamental one.

It isn’t. Charitable giving, done with intention rather than impulse, can be built into a financial plan just as deliberately as retirement or protection — often more tax-efficiently than most people realise.

6. Growing an estate that outlives you

This is the quietest goal on the list, and often the last one people voice — but for many, it’s the most emotionally significant. Not just “will I be okay?” but “will the people who come after me be okay, because of what I built?”

Estate planning in Singapore is frequently left unaddressed simply because it feels premature, or uncomfortable, or like a conversation for “later.” But a well-structured legacy — through the right mix of insurance, investments, and proper estate instruments — is one of the few things money can do that outlasts the person who earned it.

A thoughtful legacy plan may include:

• Providing for your spouse.
• Protecting young children.
• Supporting future grandchildren.
• Family trusts.
• Charitable bequests.
• Business succession planning.

Your legacy is not defined by the size of your estate, but by the lives you positively influence.

Financial Planning Is About Life, Not Just Money

Money cannot buy happiness.

But it can provide security.

It can create opportunities.

It can buy time.

It can strengthen families.

It can support meaningful causes.

And it can leave a legacy that lasts for generations.

The goal isn’t simply to accumulate wealth.

The goal is to use wealth intentionally—to support the life you want to live and the people who matter most.

Because ultimately, money has no purpose until it is connected to yours.

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Which one is yours?

Chances are, you saw yourself in more than one of these. Most people do — the weighting just shifts with age, family stage, and circumstance. A plan that’s actually built around your answers looks different from one built around generic assumptions, and that difference compounds over decades.

If you’d like to work through where you stand on each of these — clearly, and without jargon — that’s exactly what a Clarity Session with me is for. It’s a structured, no-obligation conversation to map your current financial position against what actually matters to you, before we talk about any specific product or plan.

Money is just a tool. The real question is purpose. Let’s talk about yours.

Ask anyone who started investing early in Singapore and they’ll tell you the same thing: the amount mattered less than the head start.

Why time is your most powerful financial tool — and what procrastination truly costs you

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You can earn more money. You can find a better job, cut spending, and rebuild savings after a setback. But there is one resource that, once spent, cannot be recovered: time. In financial planning, time is not merely a backdrop — it is the engine. And those who start early pay far less for far more.

This article explores two areas where time works either powerfully for you, or silently against you — insurance planning and wealth accumulation. In both, the cost of waiting is not abstract. It is measured in dollars, doors closed, and dreams deferred.

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Part 1 — Insurance: the price of good health

Most people think about insurance when something goes wrong. A diagnosis. An accident. A friend who was suddenly uninsurable. By then, the window has often closed.

Insurance is unique among financial products: it prices not what you have, but what you are. Right now, if you are healthy, you are holding something immensely valuable — the ability to qualify for coverage at the most favourable rates, with no exclusions, no clauses, no asterisks in the fine print. That value depreciates every year, and it can disappear overnight.

“The best time to buy insurance is when you don’t need it. By the time you do, you may not qualify.”

What age does to premiums

Insurers price risk. As you age, your statistical likelihood of making a claim rises — and your premiums reflect this precisely. Consider a 30-year-old purchasing a whole life policy versus waiting until 40 or 45:

Age at application	Illustrative monthly premium	vs Age 30
Age 30	$180 / month	—
Age 35	$270 / month	+50%
Age 40	$365 / month	+103%
Age 45	$495 / month	+175%

Figures are illustrative only. Actual premiums vary by insurer, product type, sum assured, and individual health status.

Waiting just 15 years — from age 30 to 45 — can more than double, sometimes nearly triple, your monthly premium for the same coverage. Over a 20-year policy, that difference compounds to tens of thousands of dollars paid extra, simply for having delayed.

The risk beyond premiums: exclusions and declined applications

Higher premiums are uncomfortable. But they are not the worst outcome. The more serious consequence of delay is what happens to your eligibility as your health changes.

A common health event — high blood pressure, elevated cholesterol, a minor cardiac episode, diabetes, a mental health diagnosis — can result in:

• Exclusion clauses — coverage is issued, but the insurer excludes the affected condition entirely. You may be insured against everything except the thing most likely to affect you.
• Premium loading — your rate is significantly increased above the standard rate due to elevated risk, and may remain so permanently.
• Application declined — for serious pre-existing conditions, cover may simply be refused, leaving you with no protection at all.

None of these outcomes are hypothetical. They happen every day to people who assumed they would “get around to it.” The tragedy is that in most cases, they were perfectly insurable just a year or two before — they simply did not act.

“A pre-existing condition is not just a health problem. It is a financial problem that can follow you for the rest of your life.”

The message is not to create fear — it is to create urgency. If you are healthy today, today is the cheapest and most open door you will ever have. Act while it is still wide open.

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Part 2 — Wealth accumulation: the compounding clock

Compound interest has been called the eighth wonder of the world — and the mathematics truly is remarkable. But the engine that drives it is not the interest rate. It is time. Specifically, the length of the compounding period. Cut that period short, and you do not just earn less — you must work dramatically harder to compensate.

Illustration: saving for a child’s university education

Imagine the day your child walks across that graduation stage, diploma in hand, surrounded by proud family — that moment 18 years in the making, made possible by a plan you started at birth.

Suppose your goal is $200,000 for your child’s tertiary education by the time they turn 18. Assuming a 6% annual return, compounded monthly:

	Start at birth (18 years)	Start at age 6 (12 years)
Monthly contribution needed	$516	$952
Total amount invested	$111,526	$137,045
Growth from investment returns	$88,474	$62,955
Goal achieved?	Yes ✓	Significantly harder

Assumes $200,000 target, 6% p.a. compounded monthly, contributions made at end of each month.

Waiting just six years means you need to save 84% more per month — and invest $25,000 more in total — for the exact same outcome. The returns work less hard because time robbed them of their runway. Many families find that level of monthly commitment unworkable, and the goal becomes compromised or abandoned entirely.evel of monthly commitment unworkable, and the goal becomes compromised or abandoned entirely.

Illustration: Retirement planning at 6% IRR

Picture a couple sitting by the sea, unhurried, watching the horizon together — the retirement they planned for, decade by decade, one consistent decision at a time. That vision is within reach. But the path to it narrows quickly with every year of delay.

Consider individuals all targeting $1,000,000 at age 65, investing at 6% per annum, compounded monthly:

Age you start	Years to invest	Monthly savings needed	Total invested	Growth from returns
Age 25	40 years	$502	$241,025	$758,975
Age 30	35 years	$702	$294,797	$705,203
Age 35	30 years	$996	$358,382	$641,618
Age 40	25 years	$1,443	$432,904	$567,096
Age 45	20 years	$2,164	$519,435	$480,565

Assumes $1,000,000 target at age 65, 6% p.a. compounded monthly, contributions made at end of each month.

The person who starts at 25 needs $502 a month. The person who waits until 45 needs $2,164 — more than 4 times as much — for the exact same result. Notice also what happens to the “Growth from returns” column: the early starter lets compounding do most of the heavy lifting ($759K of growth on just $241K invested), while the late starter must personally fund over half the target through their own contributions. And critically, those starting at 45 must find that money during life’s most financially demanding years: mortgages, children’s school fees, ageing parents, career transitions. as much — for the exact same result. And critically, those starting at 45 must find that money during life’s most financially demanding years: mortgages, children’s school fees, ageing parents, career transitions.

“Starting early doesn’t just build wealth. It removes financial stress from the years you can least afford it.”

The compounding timeline — where you stand today

Age	Compounding window	Status
25	40 years	Prime window — act now
30	35 years	Still strong — don’t delay further
35	30 years	Cost rising — every month matters
40	25 years	Significant gap — needs higher commitment
45	20 years	Steep climb — still possible, but demanding
50+	<15 years	Very difficult — urgent action required

Wherever you are on this timeline — the right answer is identical: start now. Not tomorrow. Not after the next pay rise. The second-best time to plant a tree was yesterday. The best time is today.

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The cost of “I’ll do it later”

Procrastination is the single most expensive financial decision most people make. It is invisible, painless in the moment, and its consequences reveal themselves slowly — until they arrive all at once.

Consider the full picture of what delay costs across both areas:

• In insurance — waiting means higher premiums, possible exclusions of the very conditions that matter most, or being declined entirely. The healthy self you have today is an asset with a ticking expiry.
• In wealth accumulation — waiting means needing to save far more each month for the same outcome, putting enormous pressure on your future income and lifestyle. Your money has less time to work, so you must work harder instead.

Both problems compound. And both are entirely preventable — simply by deciding to act today.

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Where to begin

You do not need to solve everything at once. You need to start. Here is a simple four-step framework:

Step 1 — Protect what you have, while you still can

Review your insurance needs while your health is on your side. If you do not have life, critical illness, or disability coverage — or if you have not reviewed existing policies in years — make that your first call this week. Tomorrow is not guaranteed; your eligibility today is.

Step 2 — Set a compounding goal and work backwards

Identify one wealth goal — your child’s education, your own retirement, financial independence — and calculate what a monthly commitment looks like if you start today. The number is always more manageable now than it will be in five years. Start, even imperfectly.

Step 3 — Automate contributions and let time do the work

The people who build wealth reliably are not the cleverest investors — they are the most consistent ones. Set up automatic monthly contributions so saving happens before spending. Discipline becomes effortless when it is built into the system.

Step 4 — Review annually and adjust as life evolves

Life changes — income grows, families expand, goals shift. Your coverage and contributions should change with it. A yearly review with a trusted adviser keeps your plan current and ensures you are never under-protected or under-invested. Small adjustments early prevent large shortfalls later.

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Your future self is counting on you. Every day you wait, the cost rises. Every day you act, time works harder for you. The gap between the two is compounding right now — in one direction or the other.

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Disclaimer: Figures used in this article are illustrative only and do not constitute financial advice. Actual premiums and investment returns will vary based on individual circumstances, health status, product type, and market conditions. Please consult a licensed financial adviser for personalised recommendations.

If you hold an integrated shield plan in Singapore, changes to what’s covered can quietly affect your out-of-pocket costs — here’s the latest update.

As you may be aware, the Ministry of Health (MOH) recently released a list of cancer drugs that will be covered by MediShield Life and other integrated shield plans. The list includes both generic and branded drugs, and covers a range of cancer types, from breast cancer to lung cancer.

The inclusion of these drugs on the list is a significant step towards ensuring that cancer patients receive the treatment they need without facing undue financial burden. However, it is important to note that not all cancer drugs will be covered by your integrated shield plan. If you are currently undergoing cancer treatment or are simply concern with adequate coverage for cancer treatment, it is important to review your plan and understand the coverage available to you.

We understand that cancer can be a challenging and difficult disease to navigate, and we want to ensure that you have the information and resources you need to make informed decisions about your healthcare.

How am I affected by this?

From 1 April 2023, upon renewal of your Policy, your Policy’s (As Charged) outpatient Chemotherapy benefit and Immunotherapy benefit (if applicable) will be replaced with

– a new outpatient Cancer Drug Treatment benefit and

– Cancer Drug Services benefit.

• Cancer Drug Treatment benefit (CDT) – Only outpatient cancer drug treatments on the CDL will be claimable under your Policy, up to the treatment-specific benefit limits. Selected outpatient cancer drug treatments beyond the CDL will be claimable under riders. If you require cancer treatment following the changes, please consult your doctor early on whether your treatment is on the CDL.

• Cancer Drug Services benefit (CDS) – Services that are part of any outpatient cancer drug treatment (including treatments not on the CDL), such as consultations, scans, lab
investigations, treatment preparation and administration, supportive care drugs and
blood transfusions, will be claimable under the Cancer Drug Services benefit, up to
specified benefit limits.

Changes to the IP plan by the various insurers are as follows

Main plan

Singlife ( known as Aviva previously)

• up to 5x Medishield Life claim limits for CDT (CDL) and CDS

AIA

– up to 5x Medishield Life claim limits for CDT (CDL) and CDS

Income

– ranges from 3 to 5x Medishield Life claim limits for CDT (CDL) and CDS depending on the plan

HSBC (known as AXA previously)

– ranges from 2 to 5x Medishield Life claim limits for CDT (CDL) and CDS depending on the plan

Next, IP riders

Singlife

• Existing rider does not boost limits for CDT (CDL) nor CDS. However, it includes a benefit for CDT (Non-CDL)

• Introduced a New Cancer Cover Plus rider
• boost the limits for CDT (CDL) and CDS and includes a benefit for CDT (non-CDL)
• benefit limits are on As Charged basis up to S$1.5mil/yr, subject to plan deductibles and co-insurance
• you can apply for the rider, subject to health underwriting and additional premium
• Note : this rider can be purchased to complement IP policies issued by third party insurers

Brochure

AIA

• Existing rider seeks to cover part of the deductible and co-insurance for CDT (CDL) and CDS

New Cancer Care Booster rider

• Boosts the limits for CDT (CDL) and CDS and includes a benefit for CDT (non-CDL)
• this rider will be automatically added to your policy upon renewal without need for health underwriting but will be subject to additional premium. You can choose to opt out.

Income

– Existing rider boosts the limits for CDT (CDL and Non-CDL). Nothing for CDS

– No new rider

HSBC

• Existing rider boost the limits for CDT (CDL) and includes a benefit for CDT (non-CDL)
• No new rider

In summary

1. IP main plan does not cover CDT (non CDL)
2. Cancer treatment is no longer on As charged basis and shall be catagorised into CDT (CDL) and CDS and shall be subjected to certain benefit limits.
3. Main concern for policyholders will be the uncertainty on whether the CDT and CDS limits are adequate and whether it’ll be adjusted for inflation down the road.
4. To address these concerns, Insurers have either enhanced existing riders or introduced new riders. Personally, I’ll encourage to apply for the rider especially if you’re on a private hospitalisation plan. However, new riders may be subject to health underwriting and additional premiums
5. Perhaps an additional solution may be through a life plan with critical illness cover
6. Switching of IP insurer is highly discouraged especially if you have any pre-existing medical conditions
7. IP plans have gone through significant changes over the years (e.g removal of full cover riders and introduction of panel specialists and pre-authorisation) and I foresee that it will get increasingly more complex

If you have any questions about your coverage or would like to discuss your options, please get in touch with your trusted adviser.

Managing your finances during a crisis in Singapore comes down to a few basics that hold up regardless of what’s making headlines.

The PM speech yesterday is a sobering reminder that the Covid-19 threat, now being a global pandemic, is far from over and we can expect to see a spike in infections and perhaps deaths. While our government can put in all the necessary measures to contain and eradicate the virus, it also boils down to the social responsibility of the individual to exercise personal hygiene and self-isolation if feeling unwell. 

But having said that, life goes on, just with some added precautions.

On the Financial front, what actions should you take in light of the prevailing situation? Well, here are my suggestions:-

1. REFINANCE YOUR HOUSING LOAN
– to address a global slowdown, countries will probably inject liquidity into the system and that’ll drive interest rates lower
– Hence, there’s no better time to seek lower housing loan rates
– we deal with mortgage brokers in this area and they’ll help you secure the most appropriate loan packages for you, hassle-free 

– Do get in touch if you’re keen to explore 

2. INSURANCE PROTECTION
– this is pretty obvious. If you have been procrastinating to insure you and your family, there’s no better time than now to take action. If a pandemic happens in S’pore, insurers may hike premiums and/or tighten their underwriting, so lock-in your relatively low premiums now and secure your coverage in the interest of your family

 – Do get in touch if you’re keen to explore 

3. REDUCE DISCRETIONARY EXPENSES AND BUILD CASH RESERVES
– this is especially true for self-employed or entrepreneurs whose earnings can be affected by the economic slowdown 

4. CONTINUE TO SAVE & INVEST FOR RETIREMENT

– Deploy surplus cash reserves and monthly surplus cashflow to generate higher yield in order to achieve your accumulation goals, whether it’s for wedding, child’s tertiary education or retirement. 

– I’ve been a strong advocate for endowment savings type plans as most clients will benefit better with a hassle-free approach to generate a respectable return of about 4%p.a with capital guaranteed, for their wealth accumulation.

– On investments, you can benefit from our company structured portfolios with regular review and rebalancing provided. To better ride through market volatility, it takes a long term horizon, nerves of steel and a dollar-cost averaging strategy to achieve your accumulation goals.  

– Do get in touch to find out more and to review your investment portfolio  

5. BOTTOM FISH THE MARKET

In the above screenshot, you will observe that major markets have dropped 25-35% within just 1 month. Taking reference from the U.S market, it has wiped out the entire 2019 gain in just 1 month!

 So are there still opportunities to buy? Certainly!

Invest now? To be advised…

Do email me to register your interest so that when the opportunity presents itself, you’ll be among the first to get notified

A. Company managed portfolios 

Minimum investment – S$10k (recommend at least $50k)

Recommended monthly investment – at least S$1k/mth 

B. Tactical Portfolio strategy (only for experienced and responsive investors)
Minimum investment – S$200k Cash only

This is not a time to be passive but rather to take proactive action to secure your long term interest. Look forward to hear from you. 

Meantime stay safe and positive always….

If you know any colleagues, friends, parents or relatives who would like to benefit from the above, your kind introduction will be appreciated and feel free to forward this article.

Get in touch at gilbert@avallis.com

This disability support programme in Singapore was a limited-time offer — details below for reference, though it’s worth checking current terms with the insurer directly.

Disability and YOU

You qualify to receive the disability benefit in the event you are unable to perform at least 3 Activities of Daily Living (ADL).

Why Sign up?

It provides interim financial assistance should you be severely disabled before you enter the national CareShield Life scheme in mid-2020.

TO QUALIFY

* Singaporeans and PRs aged 30 to 40 between 1 January 2020 to 30 June 2020 * BMI between 19-30 * Never claimed from Aviva (for any Life & Health product)  Input agent code : 60003220  *Terms and conditions apply.

If you know any colleagues, friends or relatives who qualify, do forward this to them to share the good news!

Your ideal retirement lifestyle in Singapore probably looks different from the default picture most people imagine — which is exactly why it’s worth defining early.

What comes to your mind when you think about your retirement?  

Option A
Staying at home looking after your grandchildren, taking public transport to meet friends over coffee or majong. Taking an occasional vacation to a nearby destination in Asia. Healthcare options are limited to government restructured hospitals. Financially independent. 

Option B
Zipping around town in your car meeting friends for a round of golf followed with a high tea buffet in a hotel and some shopping in town. Have the option to change your car every 5-7yrs.  Ability to afford at least 2 vacations globally a year with your grandchildren. Healthcare options are available up to private specialists and hospitals. Financially independent with a decent-sized estate that can be passed down to your children and grandchildren. 

Whether it’s option A or B will depend very much on your desired retirement lifestyle and the size of your retirement nest egg prevailing at that point. The more funds you have, the more retirement options will be available to you.  

For most working professionals, I believe they will desire a lifestyle similar to option B but interestingly, their retirement plans may not match that objective. Why?

Some of the possible reasons are as follows:- 

1. Prioritizes immediate gratification over deferred enjoyment
2. Low savings ability due to inability to curb lifestyle spending &/or over-commitment to car and housing. With our high property prices, it is not uncommon to see couples saddled with at least S$1mil in housing loan nowadays
3. Having a single income to support the family after a spouse leaves employment to look after the children
4. Being overweight in investments with a performance that did not pan out as expected. Wost still, ended with a capital loss.
5. Procrastination leading to delay and underfunding in the accumulation plan
6. Overestimated that CPF alone will be sufficient for retirement
7. Underestimation of how much is required at retirement age to live that desired retirement lifestyle

In this article, I’d like to discuss point #7. 

To facilitate the discussion, let’s think of retirement to like taking a long term overseas vacation…something that most of you will be able to identify with. After all, taking overseas vacations is one of the most favorite pastimes for overworked Singaporeans, wouldn’t you agree?  

A. The Destination

With every vacation, it starts with the destination.

Given our longevity, retirement may span at least 25yrs. Hence, for discussion purpose, let’s assume that we’re taking a Flight to Brazil which is a 30 hour flight time 

Perception pitfall: one may think that the retirement period is far shorter 
ST article

B. Plane type, Engine, and thrust, fuel capacity

Given the destination, which plane do you think can best bring you there most effectively in one piece with minimal refueling stops? A turboprop, piston, midsize jet or a wide-body airliner?
– A wide-body airliner of course!

In financial planning terms, the size of the plane is akin to the size of the retirement nest egg required to provide you with the desired retirement lifestyle. If your financial adviser has done a calculation for you, you will realize that it’s no small change. After all, Singapore is reputed to be one of the most expensive cities to live in. 

With a large airplane, it needs to be equipped with large engines and fuselage to power the aircraft. Moreover, the cost of the plane is not constant. Instead, it goes up over time due to inflation.

Hence in financial terms, the earlier we start accumulating and the higher the regular contribution, the more power you will inject into the accumulation process…and the more likely we can achieve our retirement goal.

Moreover
Perception pitfall: one may think that they can rely on CPF alone or that retirement doesn’t require too much money.
 ST article

C. The Runway 

Every plane needs a runway to allow it to pick up speed for take-off. Similarly for retirement, the runway is the time period from now till our expected retirement age. This is the critical period for us to contribute towards our retirement nest egg, and take advantage of the compounding effect of money.

Typically the larger the plane, the longer the runway needed. Since we have deduced from above that we’ll require a Airbus A380 equivalent, we do need a long runway for it to do a proper take-off, agree? That means that we really need to start early – as soon as we’re in our age 30s, to start the accumulation process. Appreciating this point is the most important part of the accumulation process.

If we take advantage of the long runway by starting early, small regular contributions can allow us to achieve our retirement goal with little financial stress. We can see that through the effect of compound interest in the picture below. It certainly looks like a plane take off trajectory, isn’t it?

However, if we procrastinate and start later in life e.g age 45, the runway will be shorter and we will be required to contribute significantly more on a monthly basis to reach the same end goal. That would be pretty stressful, wouldn’t it? Another example can be seen in the following 

If you’re only starting to accumulate in your 50s, your runway will be rather short and you will need all the financial firepower you can give to your accumulation plan. If you fail to do that, I’m afraid you may have to consider deferring your retirement age and/or downgrade your retirement expectation.

In summary, our ability to achieve our retirement goals are dependant on how well we manage the following 4 parameters:-

1. desired Retirement Lifestyle, expected Longevity and Inflation
– which will determine how much is needed at retirement age
2. Accumulation Period
3. Size of the Regular Contribution to the plan
4. Rate of Return on the plan (which I’ll address in a later article)

Ready to take off to retirement bliss? Get in touch with me at gilbert@avallis.com