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  #1301 (permalink)  
Old 01-09-2013, 08:32 AM
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Unbelievable but true. Even if I assume zero inflation, I will need to save $720k !!!

I think I will need to give up my car, maid and holidays. Force save $36k a year.

Thanks for the advice.

Originally Posted by Unregistered View Post
Assuming you and your spouse are 45. And you want to retire by 65. That's 20 years to go. And assuming you will live to 85. Another 20 yrs. Here's what you will need during your retirement years if you want to maintain the $3000 pm purchasing power throughout the 40 years. Assume inflation rate at 3.5%. Dont say I say, but $3k for two persons is really really basic. Definitely no car, and cannot go for holidays also.

Value today -- $3000 pm
20 years later when you are 65 (to have same purchasing value) -- $5,969 pm
40 years later when you are 85 -- $11,877 pm

Here's the bombshell - the amount you will need to maintain that very modest lifestyle of $3000 per month.

To last 10 years (from 65 to 75 yrs old) : $941,392
To last 20 years (from 65 to 85 yrs old) : $2,168,275

What!? So much? you say. Ok, let's say zero inflation every year. Just based on $3,000 pm
1 year will mean $36,000 already.

Let's say you retire at 65. With zero inflation, you will need:
To last 10 years (from 65 to 75) : $360,000
To last 20 years (from 65 to 85) : $720,000

To be save, also assume there will be inflation, and save and invest as much as you can while you are still working! Better still, dont retire at all if possible.

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