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Old 08-04-2019, 02:43 PM
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A husband & wife couple who are both engineers (they are not high income earners) can still retire at 55 if they are disciplined. They must not upgrade their lifestyle even though their income rises over the years.

Assuming they bought their BTO 4 room HDB flat at a very cheap price (at only $300k) and paid their mortgage off by 55 using their CPF. They also stay in their flat all their lives. Also they don't own a car and don't employ a maid (it costs $2k pm to own a car and $1k pm to employ a maid). They can easily save on average $30k pa over their 30 years of working. This means they can save $900k by the time they retire at 55.

With $900k, they can invest in a 5% dividend yield portfolio of good, blue chip stocks which give them $45k pa in dividends. They can also rent out two of their empty rooms since their children would have been married and staying in their own BTO flat. They can get $700 pm for each room.

In total, their passive income will be $5,150 pm. This is enough for them to buy food and pay utilities for two retired old persons. At 65, their passive income will rise by an additional $3,600 pm from their CPF Life. So it becomes $8,750 pm in passive income!

So, even an engineer married couple can retire at 55 if they don't overspend by upgrading to a condo, owning a car and employing a maid. These luxuries are just for those (eg bankers) who are high income earners.

We are very lucky to have the very cheap BTO HDB flat system, which allows those who are not high income earners to easily afford a home and retire comfortably.

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