Why your 20s is too early for Retirement Planning – Who is Josh Tan, The Astute Parent?


The Financial Horse team speaks to Josh Tan, financial advisor turned Youtuber, about his passion in helping others plan their finances.

Josh shared with us valuable life lessons from his investing journey, and how he lost a big sum on an Ice Cream store in his 20s!

Josh Tan, The Astute Parent

Why did you start The Astute Parent?

Josh: I realized I needed to reach an audience through a digital method. That is how I started the website (The Astute Parent), to gain a foothold in reaching an audience online.

At the beginning, I focused on niches.

I realized that there was a demand for content for parents, and with my background as a financial adviser, I could offer an edge. For instance, content such as insurance reviews for parents.

I can share industry insights based on what I experience on the ground, as opposed to a freelance writer who is writing based on secondary information.

Over the years, the topics on The Astute Parent has grown, and my audience has also broadened. I’ve also started a YouTube Channel!

What would you consider your best content?

One area where my content resonates with many people are the insurance reviews. Because I go into detail and depth.

I try to give them more information for them to make a decision, and to offer some qualitative reasons (not just quantitative – there already a lot of comparison models).

For instance, what is the Unique Selling Point of the plan. And I’ll offer my point of view.

I hope to be an educator, to offer a solution when people are looking for something on Google.

Is Josh enjoying semi-retirement?

For me, it’s a balance. I want to chill, but I also know that there are consequences.

What am I teaching my kids if I wake up late, read the newspaper and chill all day? 

At the moment, I’m doing something I love which is really fortunate. And I want to be a good role model for my kids, to show them the value of having a good work ethic.

Investing Advice

DIY Investing vs. Getting a Financial Adviser

As a financial adviser, I try to help my clients through my own style.

People usually try DIY investing when they are young.

When they are older, and are looking for a different way to invest, they come to me.

I tend to help people through their stages of life, especially as they are older. I can then offer some advice with a sprinkling of my own life experience.

This where I have a value proposition.

Expectations are shaped by experience

Most investors are shaped by their own experiences.

Markets have been doing very well for the past few years, so they would expect a higher return.

But I tend to coach my clients on having a longer-term view, and what is realistic.  

I also advise them on risk-avoidance.

A lot of people need some time to explore what is their real comfort levels when it comes to risk.

It’s a discovery process, and I can’t be too over-bearing like coaching your niece or nephew. Don’t do this or that, because you’ll get hurt. 

A lot of times, you do have to go through it yourself, before you are ready to listen to other people about their journey.

Biggest Investment Regret?

My HDB resale value is lower now than when I bought it.

In hindsight, it’s easy to make decisions. But I think that at that moment, it’s important to remember that you had certain constraints and that’s why you made your choices.

This could easily be a financial regret, but at that time, it was a good choice as I needed a home (BTO wait is too long for my needs) and the price was good for my budget.

Ice Cream Business?

My biggest “failure” and most valuable life lessons came from starting an ice cream business. I lost a lot of money there.

As a 26-year-old, this really cost me financially, but the lessons learnt was also priceless. 

At that time, like everyone else, I was thinking about expanding my streams of income. So naturally I gravitated to try to start a second business, because as a financial advisor, I did have flexibility of time.

I thought of starting a F&B business where customers come to me – instead of always chasing customers as an advisor. So that kind of naivety was what led me to try and get started in F&B.

When I started, I went to Subway, and I spent some time being a sandwich artist, and learning about the franchise model. As part of the franchising roadmap,  you have to interview existing franchise owners. That’s when I learnt that it was not actually lucrative. It’s a lot of work, for not much money, which means that I cannot replace my existing income.

So with that in mind, I decided to start my own F&B business instead. But it turns out that there’s a reason why people do franchises, and it doesn’t mean that opening your own F&B can naturally attract customers, I still had to chase down customers in the end.

So yeah, I would say, don’t be seduced too quickly by alternative incomes. 

Know Yourself – Advice has to be dished out at the right time

I’ve realized that advice has to be dished out at the right time.

If there’s no pain, they don’t feel the need to adjust what they’re doing, and the advice will fall on deaf ears.

20s are too early for retirement planning?

I know a lot of people recommend retirement planning in their 20s (so their returns compound), but it may not be realistic.

You don’t know your housing situation or ambitions. For example, do you have plans to upgrade? If your dream is to stay in some place, then you’re going to spend that money sooner or later.

Also, if you just bought your first marital home, you may not have the funds to pour into retirement at that moment.

In your 20s, your life stages are not clear. We’re not hitting the nail on the head.

First, you need to be happy housing-wise, and have an idea about family planning, before you can have an effective plan for the future.

So retirement has to be holistic. It’s more natural to plan this when you’re a bit more settled in your 30s or 40s. At this stage, you’re ready to sacrifice the present for a good future.  

Life goals are not fixed when you’re 20+

Having flexibility in retirement planning is essential.

Getting married, buying a house, starting a family – these are all life stages that are very dynamic. This means that expectations also change drastically over time.

You have to ask yourself what are your life goals, and when do you need the money?

Medical insurance is also an important topic. For treatment costs, it’s usually addressed within the plan itself. But the often-forgotten part is potential income loss.

For this type of contingency planning, it’s quite hard to advise when the person isn’t receptive.

It’s like the Karate Kid movie – A teacher will come when the student is ready.

Kids will change your Financial Planning

Any plan you have in your 20s will change the moment you have kids.

Your responsibility level changes, you think differently, and you might suddenly place less emphasis on your career.

So kids are a major life stage that will definitely affect your financial planning.

Which is why retirement planning is best in your 30s when your life goals are more stable.

There is a Right Timing

Rather than trying to stick to a temporary timeline, it’s good to let things play out and decide at a later stage of life.

This is because your expectations change, and it’s very difficult to commit yourself to big things when you’re young.

For instance, to force yourself to put aside money for retirement, and secretly harbour resentment that you have an unfulfilled dream.

So, on the ground dealing with people and their life stages, I feel that there is a right timing to things.

No Money, No Kids?

I don’t agree with advertisements directed at young couples, saying you need an astronomical sum to have kids, followed by them selling you a product to solve the issue.

Of course, if you present an astronomical sum that is required to have kids, then the solution they are selling seems fantastic.

I tried to debunk this recently on my channel, I really don’t think you need that much money to raise kids. Especially if you look at local university fees etc.

Also most of the time, when you first have kids, your income is lower, but your career path actually progresses, which means there is actually a long runway for you to maximize wealth planning. 

When you’re past 35, and at a more senior position at work, your income increases dramatically. It is then that you have decisions to make.

For me personally, I think cost is secondary when it comes to kids. It’s more like I need energy! I can’t deal with my kids’ energy and I have to drink lots of coffee to keep up!

Retirement Planning

Is the 4% rule still relevant today (rule that you can spend 4% a year of your portfolio comfortably)?

The 4% rule is a general rule.

I explain the pros and cons of that rule to my client, and I try to have discussions to see how they can work towards that goal or any benchmark.

In my view, it’s important to revise your strategy every few years. No strategy is set in stone forever.

You need to assess the different kinds of assets and how they perform in each cycle. It’s quite difficult to just set a hard rule (or retirement strategy) and don’t revisit it anymore.

Semi-Retirement (better than FIRE?)

A concept that I advocate for on my channel is semi-retirement.

I’ve met so many people in different phases with different mindsets. What I’ve realized is that when you reach a certain stage, you must be willing to take a backseat, let your income drop, explore life, and not just keep climbing the corporate ladder.

So the question is how to build a nest egg to allow yourself to achieve semi-retirement. This is closely related to what kind of life you want when you are semi-retired.

For example, some surveys put retirement figures for Singaporeans at 2 million – which is a scary number for most.

I think that if you shift a mindset a little, to accept that you can still work a little even in retirement, you will need a far less amount to achieve this goal, and it becomes much more attainable.

The big advantage of semi-retirement is that you are still having some income, so the nest egg doesn’t need to be that big.

The big advantage of semi-retirement is that you are still having some income, so the nest egg doesn’t need to be that big.

Can you really invest in your 70s?

A lot of people forget that you may not be mentally as sharp when you’re older. It’s difficult to manage an equities portfolio when you’re much older.

So sometimes having CPF, CPF life and other annuities are very relevant, because they give you certainty.

If you’re just fully invested into equities, you may not be able to keep track when you’re older.

Managing Expenses

What Josh plans to teach his kids about money

The best way I think is role modelling. I hope to instil in them the values and concepts based on what they see my wife and I practice.

My upbringing shaped me a lot in how I deal with money, so I believe I can model behaviour to my kids. But of course, some of my friends tell me that their teenagers are totally out of control, and nothing can change them haha.

I hope they can learn about my work ethic and my values, and my wife and I are on the same page on this.  

I would like to instil in them proper values, and hopefully they can learn from how I spend my money.

Having the right values and beliefs is the most important.

Lifestyle Creep – A Wasted Opportunity to Grow Wealth

One of the key challenges for a lot of people is lifestyle creep. For young people who are earning a good income but not keeping their expenses low, I think it’s a wasted opportunity to grow wealth.

I’ve seen people as they progress, they change bigger and better cars, houses etc. and they get caught in a loop. You own more but you spend more. Eventually you realize that you’re not making significant progress on your savings.

Last year, there was a story that went viral about pilots spending $26k a month, and many people were laughing at them for how much they were spending.

But sometimes, it may be the circumstances and the environment as well. The sudden rise in income is very significant from a cadet to a pilot, and they may be tempted to spend.

Maybe all their colleagues were driving a BMW, and they felt the need to do the same. Also, perhaps they never thought job security would ever be an issue – who knew pilots would ever be out of a job?

So I think the first stage is to be wary about this issue – lifestyle creep.

Without being aware, there’s no charge.

Spending money

To control expenses, I think the first thing to do is to compare, so you can make informed decisions.

For instance, when buying my car, we made sure to compare the options.

I think the main idea is to avoid impulsive purchases. If it’s a properly thought-out purchase, there’s less regrets.

Property Investing

Do you think Property is still a good investment?

Different segments of people have different preferences. Some will have the perspective that they want hard solid assets, and for those than can afford secondary investment properties, they will naturally feel it’s the better option.

People who invested in property in the 2000s, those kinds of returns cannot be easily replicated in the stock market, and they will definitely believe in property investing.

Belief is reinforced by results.

Also it depends on from whom you take your advice. If you’re hearing from a lot of property agents, and developers, and this is the type of information you’re receiving, you’d also sway towards the value of property. 

One thing I dislike is those that advertise buying 2 condos for young couples, by promising them sure returns. I think it’s OK for high-income earners, but not so for young couples earning around 6k combined income. The target market is wrong, and I don’t agree with this, as there is a lot of risk here.

For me, I think the new launch units are overpriced. So I myself got a resale.

HDB Rental + Condo Strategy

I own a HDB, that is rented out and I’m living in a resale condo. 

HDB yields are very good right now. Especially as the high income foreigners are leaving Singapore, and there is increasing need for more affordable housing, the climate is very favourable for HDB rental.

For me this strategy works, buying a HDB first then condo. Back then, I paid the lower rate of 7% ABSD, but now the equation is more unfavourable.

Check out Financial Horse’s latest post on Property Investing in Singapore (2021)!

Liked this interview? Find out more on Josh’s Channel!

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  1. That was an informative read and I appreciate Mr. Tan sharing his advice and experiences. The point he made about lifestyle creep is important. I was once involved with someone who was just worried about keeping up with the Joneses and attaining material wealth instead of financial security. I live a minimalist lifestyle now and try to save as much as possible. And while I will defer to Mr. Tan’s experience, I do have to say that I disagree with his point that people in their 20’s don’t need to worry about retirement. Saving money for retirement should start as early as possible. That is financial muscle memory that should start early because it gets easier to put it off the older you get. (I wish I did)


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