Should try and talk to people you know who have already retired, in the age group you envisaged to retire at. You should then be able to get a glimpse of what it is like to retire at that age. People of our parents' generation have different expectation when they retired. For them, seeing us grow up, start our own families and in good jobs was enough satisfaction for them. So their retirement years were spent living simple lifestyles.
But for us, will we be satisfied to live simple lifestyles in our retirement, especially at 55? No matter what people planned to do during their retirement years, they will quickly find boredom once routine sets in if they do not find something to do that is engaging enough. Just like work, retiring happy requires some commitment to do the things you planned. Otherwise you will end up listless.
I have colleagues who retired at 55 because they can afford to. They have made astute investments during their working years and are now enjoying the returns. Although they have no worries financially, some of them admitted they were bored and have taken up new jobs. As their children have grown up, and their spouses still working, it can get very lonely at home. Worst of all they still feel energetic.
If your work is not unbearable, I would advise working as long as you can. You can still travel to exotic places during your annual leave like what I am doing. Like my colleagues, I can retire now but I don't want to rush into the lifestyles they are leading right now.
I have hobbies lined up once I retire, but I worry they may not be sustaining and then I would be very bored and it would difficult to get back into the workforce.
We should always plan for retirement especially the financial part, but think carefully before letting go your job because work makes up a big chunk of our lives. It gives us purpose.
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Originally Posted by Unregistered
Hi all,
My wife and I have been following this forum for quite some time. We find it very good as we learnt a lot from the many smart people here. We often discuss the ideas that were shared here and we got inspired to leave the rat race and retire as soon as possible so that we can pursue more meaningful things in our lives such as travelling to exotic places, reading, studying our religion deeper, charity work, etc.
We are now both 40 years old and earn a total income of $160k pa. We own a condo, which has mortgage of $600k and worth $1.2m. Our other assets include cash, CPF and some dividend stocks, worth $500k in total. We own a luxury car which is paid up, left 1 year of its COE. Currently our savings is $40k pa.
Here is our plan to retire early at 55:
1. We will sell our condo at $1.2m, pay off the condo mortgage and use the cash balance of $600k to buy a 4 room HDB flat for $400k. We then have $200k cash avaliable to invest. So now we are debt free and no more loan to service. We will save about $35k pa in mortgage payments.
2. We will sell our car and take the bus. This saves us $25k pa.
3. After all the these moves, we will increase our savings to $100k pa.
4. So, we will start with about $300k to invest in blue chips giving us 4% dividend yield or $12k pa. Every year we will add $100k in investments and the dividend will then increase. Over 15 years, our investment will grow to about $2.5m and the dividend will be $100k pa.
We can then retire at 55 years old with $100k pa passive income.
What do you think of this plan? |