Whats your net worth

Couple in mid 40s, annual savings $35k pa.
Total net worth $2m. Owns a condo, car.
Can we retire by 62? How do we retire?
Is downgrading to a HDB flat the way to go?
Please share your experience if you have retired.
Thanks.

It is never too early to plan for retirement, and at mid 40s more or less, you would have established your career and family. You would be in a cruise and sustenance mode. You would be in a wealth building period.

I have previously provided examples of 2 sets of retiree couples (aged 55) : one couple living in an HDB while the other living in a condo. Reproduced below is the example of the couple living in a condo.

Professional couple living in $1.5m condo. Retired at 55.
CPF minimum sum = $296k (total for both)
Medisave minimum = $81k (total for both)
Net worth : $2.5m
Emergency fund : $80k

cash available for investment : ($2.5m - $1.5m - $296k - $81k - $80k) = $543k
$543k Invested in stocks (Reits) @ 7% returns : $38k pa

Yearly expenses: $80k
Shortfall : $42k pa.*

To make up the shortfall, chip into emergency fund - gone in 2 years.

Start to chip into invested fund : deplete in another 8 years.

Annuity life kicks in at 65. Expected Payout for couple : $36k pa.

Shortfall : $44k pa.

Downgrade from condo to HDB to free up more cash to last remaining years

Bottomline : at the end of the day, cannot hold on to condo, but still got more room to manoeuvre than HDB couple.

The above example is for a couple with net worth of $2.5m at 55. For your case, as your net worth is already $2m, you are likely to be better off than him. But who knows what the CPF minimum sum might be then, and what the inflation will be. Retiring at 62 is a safer bet.

Originally Posted by Unregistered

Couple in mid 40s, annual savings $35k pa.
Total net worth $2m. Owns a condo, car.
Can we retire by 62? How do we retire?
Is downgrading to a HDB flat the way to go?
Please share your experience if you have retired.
Thanks.

Thanks for your reply.
Based on your example, if we retire at 62, we will be able to save $595k, which we can use to buy a resale hdb flat. We will sell our condo at $3m and invest in reits at 7% and get $210k pa. Ok?

Originally Posted by Unregistered

It is never too early to plan for retirement, and at mid 40s more or less, you would have established your career and family. You would be in a cruise and sustenance mode. You would be in a wealth building period.

I have previously provided examples of 2 sets of retiree couples (aged 55) : one couple living in an HDB while the other living in a condo. Reproduced below is the example of the couple living in a condo.

Professional couple living in $1.5m condo. Retired at 55.
CPF minimum sum = $296k (total for both)
Medisave minimum = $81k (total for both)
Net worth : $2.5m
Emergency fund : $80k

cash available for investment : ($2.5m - $1.5m - $296k - $81k - $80k) = $543k
$543k Invested in stocks (Reits) @ 7% returns : $38k pa

Yearly expenses: $80k
Shortfall : $42k pa.*

To make up the shortfall, chip into emergency fund - gone in 2 years.

Start to chip into invested fund : deplete in another 8 years.

Annuity life kicks in at 65. Expected Payout for couple : $36k pa.

Shortfall : $44k pa.

Downgrade from condo to HDB to free up more cash to last remaining years

Bottomline : at the end of the day, cannot hold on to condo, but still got more room to manoeuvre than HDB couple.

The above example is for a couple with net worth of $2.5m at 55. For your case, as your net worth is already $2m, you are likely to be better off than him. But who knows what the CPF minimum sum might be then, and what the inflation will be. Retiring at 62 is a safer bet.

My husband and I both retired 2 years ago when we hit 60. We sold our landed house for $2.5m and use the proceeds to buy a $1m one-bedroom condo. The balance of the proceeds plus our other cash were then invested giving us 5% pa or about $75k pa. We sold our car as the condo is next to an MRT station, and we no longer needed a maid (which we needed since a lot of cleaning and housework required to maintain a landed property). This saves us a lot of money. Our expenses is now only about $60k pa. So we are retiring nicely in this condo, which is quite new and has many facilities. We enjoy going to the gym and swimming in the big pool. We also enjoy volunteering at an old folks home during the weekends. We are happy indeed.

Originally Posted by Unregistered

Couple in mid 40s, annual savings $35k pa.
Total net worth $2m. Owns a condo, car.
Can we retire by 62? How do we retire?
Is downgrading to a HDB flat the way to go?
Please share your experience if you have retired.
Thanks.

We are in our late 30s and we just bought a condo for $1.1m, taking a loan of $800k. Our combined annual income is $120k and we will have to service our mortgage for many years till we retire. We take MRT to work. We can afford to save only $20k pa. We hope we can still work for years to come.

Originally Posted by Unregistered

I never claimed to be an expert investor, but certainly I've never been burned so bad like you that you invest only cash in property like a scared mongrel. Its like you sinned so badly that now you have turned into a monk.

So are you the type of person to talk like a successful investor merely because you read some financial/investment books and know some TA/FA? But with no good portfolios to share with? Typical can talk but cannot do type? haha

Originally Posted by Unregistered

Deregulation under Greenspan.

It's convenient to blame bankers but don't hate them just because they are rich.

Do the world hate warren buffet because he is super rich or admire him?
People don't hate/envy someone because he is rich, but if he is rich by exploiting/corrupting/cheating, people tend to hate it..

Originally Posted by Unregistered

This sounds like an excellent plan. Malaysia has some nice places to retire at. You can consider Tioman Island, Redang, etc. Nice beaches. Actually you don't have to wait for 5 years. You can actually retire now! Your RM5m can last you more than 100 years if you spend RM50k per year. If your kids are grown up and independent, by all means, you can retire now. Can also consider Thailand too - you will be a multi, multi millionaire too in Thailand. The Thais will look up to you, you can even get a maid to do the housework and cook for you.

I like your idea, I will do the same when I reach 55. I will sell my Queenstown HDB flat for $1m and convert to RM. I will get close to RM3m. Sure can retire happily. My RM3m can last 60 years if I spend RM50k per year. I think I will not live that long after retirement.

Can you be more realistic? living on those islands are very different from living on Sentosa, town is just 5 to 10 mins drive. Have you been to Tioman, Redang? Are you sure you can retire there? and what's the benefit of being multi millionaire but the value of the money is the same? you can go to Zimbabwee with your SGD and become multi multi trillionaire but buying a bowl of road side noodle probably cost you SGD50 compare to SGD3.5 here... millionaire or not is not important, is the value of your money, your spending power...

Originally Posted by Unregistered

Thanks for your reply.
Based on your example, if we retire at 62, we will be able to save $595k, which we can use to buy a resale hdb flat. We will sell our condo at $3m and invest in reits at 7% and get $210k pa. Ok?

Care to share any reits yielding 7% now?? Would like to buy some..

Originally Posted by Unregistered

Mr Unregistered 1's disdain of Bankers and his consequent actions are completely irrational and naive. Can't believe you think they are pragmatic.

Bankers and analysts can be experts, and good advisors but there are good and bad ones. You have to distinguish. If you watch all the wall street conspiracy movies, you and Unregistered 1 will derive pleasure in hating the evil banker, but that's hollywood. The truth is far more complex. It has to do with Government and global competition.

Not sure about your analogy. Better to think of it like management cut your IT security budget so that the company could make more money. You let go a few key staff, then a hacker wiped out your system, and the company lost money. Suddenly you are blamed for not doing your job.

Your scenario is totally not applicable. Government cutting budget back before 2007????