How to retire at 55 assuming a retired couple needs $2400 pm. Assume they have a PAID UP
HDB flat, NO debt, NO dependents and choose
CPF Life ERS.
Between age 55 to 65, assuming an inflation rate of 3% pa, they will need $368,865 in total over the 10 years.
Between age 65 to 85, assuming an inflation rate of 3% pa, they will need $1,071,213 in total over the 20 years.
Between age 65 to 85, if they choose the
CPF Life ERS, they will get $960,000 (i.e. $2000x2x12x20) in total over the 20 years (assuming they both pass away at 85). So, shortfall of $111,213 cash.
So, the couple will need $480,078 cash (i.e. $368,865 + $112,213) in total to retire at 55. Each of them must also have $249,000 in their
CPF SA to choose the
CPF Life (ERS).
So the amount of assets they must have (not including their home) is $978,078 (i.e. $480,078 + $249,000 + $249,000).
If they want more cash, at some point in their retirement, they can sell their current
HDB flat and then buy a 2 room flexi flat for the elderly. For example, they can sell their 4 room
HDB flat for $400,000 and then buy an elderly flat for $100,000.