MAS publishes financial planning guide with regulators
MAS publishes financial planning guide with regulators | Insurance Business Asia
Insurance News
MAS publishes financial planning guide with regulators
It has four main points that it asks Singaporeans to consider
Insurance News
By
Kenneth Araullo
The Monetary Authority of Singapore (MAS), in partnership with the Association of Banks in Singapore (ABS), Association of Financial Advisers (Singapore) (AFAS), and Life Insurance Association (LIA), has unveiled a basic financial planning guide aimed at empowering Singaporeans to bolster their financial wellbeing.
The guide offers essential guidelines to prompt individuals to take proactive measures in addressing their savings, insurance, and investment needs. It encourages Singaporeans to:
Maintain a reserve equivalent to at least three to six months’ worth of expenses for emergency requirements
Secure insurance coverage amounting to nine times their annual income for death and total and permanent disability, and four times their annual income for critical illness
Allocate a maximum of 15% of their income towards insurance protection
Invest a minimum of 10% of their income for retirement and other financial objectives
Starting from January 2024, the guide will be available in six tailored formats to cater to individuals at various life stages, including recent workforce entrants, working adults with young dependents, those supporting elderly parents, and individuals approaching retirement.
A National Financial Capability Survey conducted by MoneySense in 2021 revealed that while Singaporeans generally exhibit good financial management habits, they need to actively engage in financial planning. Notably, over half of the survey respondents had not formulated a savings plan in preparation for retirement.
“The Basic Financial Planning Guide provides Singaporeans with simple and actionable steps they can take to enhance their financial wellbeing. I thank the industry associations for their support in designing the guide, and for their continued partnership in using the guide to advise and help uplift the financial wellness of Singaporeans,” said Lim Tuang Lee, MAS capital markets assistant managing director.
“LIA is driven to fostering a progressive life insurance industry by collectively enhancing customer understanding of the importance of financial planning. We are confident that the collaborative endeavour of MAS and industry associations to develop these guides for basic financial planning will raise awareness among Singaporeans, enabling them to better prepare for various life stages and unforeseen situations,” LIA president Dennis Tan said.
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