Originally Posted by Unregistered

It appears you do not have children. Even so, it is always good to have reasonable house size to give each other space especially when both of you are retired and will be spending a lot of time together. Everyone needs their quiet time and space.

I see a lot of posters talked about plonking their money into stocks to earn dividends when they retire, but I am doubtful how many would actually have the guts to do it. Let's use your case as an example.

After buying your studio apartment upon retirement, and you have $1m left. Out of this amount, you would probably set aside $50k - $100k as cash (in FD) for emergencies. Out of the $900k left, let's say you take the plunge and invest them into equities. To manage risk, you would probably spread the investment over different kinds of stocks. You want some safety in blue chips, but blue chips usually give lower dividends of maybe 2 - 4%. And you put some in reits for higher dividends maybe 6%. In total, you will not be getting 5% as you think because when retired, you will become more cautious, because you simply cannot afford to lose any money. No more salary coming in.

Sharing from our experience, we could only achieved about 4% return from investment on average, and that is only because we dared take on some risky investment giving higher returns. We dared because we are still working, but once retired, we will divest those risky investments. Here is our spread and returns from our current portfolio.

1. Investment Property at $1m -- rental (net) return at 3-3.5% or $30k - $35k pa
2. Blue chip stocks at $600k -- ave. return at 3.8% or $20k+ pa
3. Reits at $400k -- ave return at 6% or $24k pa

We are getting about 4% return or $80k pa from a $2m outlay. I asked myself would dare I put everything into reits to get the 6%? I think not, not when I am retired!

My point is, the $50k pa that you are banging on to fund your retirement, think you need to explore other options or to reconsider working longer.