Salary.sg Forums - View Single Post - How much are you earning per annum?
View Single Post
  #8196 (permalink)  
Old 19-07-2015, 10:47 PM
Unregistered
Guest
 
Posts: n/a
Default

Quote:
Originally Posted by Unregistered View Post
It is immaterial how much you are saving now. As years gone by, your salary will increase. Likewise, expenses will increase due to inflation.

As rule of thumb, if your last drawn salary is 10k, your saving (net liquid asset plus CPF Life) should be 120X, ie 1.2m to generate 84k replacement income @ 70%. You are also expected to have a mortgage free housing. Spending 60% of replacement income and leave behind 10% to cater for yearly inflation, and you will be safe.
All these worries about inflation is nonsense. Inflation hits hard only if you indulge in luxury items. If you want to own a car during retirement, eat at high end restaurants, party all night, gamble all day, then even $30k pm in retirement will not be enough.

Mind you, there are families who live well with $5k pm. They have no problem paying the mortgage because they choose to buy cheap BTO flats for $200k (4 room flat in unmatured estates), they don't drive and they cook their own meals.

Likewise for a retired couple,they won't need much if they no longer have defendants and no more mortgage to pay. The basic necessities will cost them the most $2k pm. Add some frills, another $500 pm. So $30k pa is all they need. Just invest $600k in a blue chips stocks portfolio that gives 5% pa in dividends. These dividends will grow over time.
Reply With Quote