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Old 11-04-2019, 07:44 AM
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They can also retire at 55 by renting out their HDB flat and retire in KL. Their dividends already give them $45k pa. They can get an extra $24k pa ($2k pm) by renting out their 4 room HDB flat (Note: HDB flat is an asset that can generate income). So in total, their passive income is $69k pa or RM207k pa.

With RM207k pa in passive income, they can retire very rich.

Their expenses:

Rent a bungalow RM6k pm or RM72k pa.
Food, utilities and car 4k pm or RM48k pa.
Holidays and miscellaneous RM5k pm or RM60k pa.
Total expenses RM180k pa.
Savings RM27k pa.

When they reach 65, their CPF Life will give them an extra $4k pm or $48k pa or RM144k pa. They can use that extra money to travel the world in luxury!

No need to save millions to retire very rich. Just need to think outside the box.

So, even average engineers living in HDB flats can also retire very rich if they are smart in their retirement planning. Singaporeans are very lucky because they can buy cheap BTO HDB flats. They can easily clear HDB loan in a few years if they are financially prudent and don't waste money by house upgrading, buying cars, employing maid, smoking and gambling.

Originally Posted by Unregistered View Post
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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