Originally Posted by Unregistered

Many Singaporeans are asset rich and cash poor. To plan for retirement, it is best that you try to bring out an excel spreadsheet. Let me try to explain how to create this spreadsheet :

Column 1 : Year
Column 2 : Age
Column 3 : Yearly savings
Column 4 : Cumulative savings
Column 5 to 21 : Cumulative savings with added investment returns, eg stocks, unit trusts. Put in an estimated yearly % into this. I use 0% to 15%. Within each of these columns, deduct for additional special big ticket expenses (excluding usual yearly expenses in column 24) related to each year or a specific age, eg mortgage payments, children education, buy car, etc
Column 23 : Est yearly inflation (I use 3% for all years but change this figure for a specific year when the actual inflation data released the year after)
Column 24 : projected future yearly expenses (column 24 x column 25). Use your current usual yearly expenses as a baseline.

Now comes the part on knowing when can you retire right ? In columns 5 to 21, the values remaining at each age will tell you your net worth. Say you want to retire at 55, so you take the value at column 24 and deduct from each of the columns 5 to 21. Use the same foumula across all the years from 55 onwards. If it runs negative, you have to either increase savings in column 3, or postpone retirement age, or improve your targeted yearly returns before 55, or reduce expenses in column 24. It is quite complicated to explain here simply in words but the excel spreadsheet can be customised to suit your situation but you must put in your formulas correctly based on your own situation. I created such a spreadsheet to track my financial planning. I am not a financial planner trying to sell my services. I am just a working class guy with a bit more financial planning knowledge trying to.share my knowledge here.