We have worked out our retirement plan. We will retire at 58. First we will sell our condo and get $1.2m. Then we buy a totally brand new 2 room BTO flat for the elderly for $100k, pay in full cash. We invest $1m in high dividend yield stocks giving us 5% dividend yield, $50k pa. Our 3 children will give us allowance of $2k pm in total or $24k pa. Total passive income $74k pa. When we reach 65, we will get $3.6k pm or $43.2k pa from
CPF Life. Total passive income at 65 will be $117.2k pa. Our expected spending during retirement will average $50k pa as we no longer need to own a car. We will save and reinvest the balance or spend on round the world holidays. Living in a 2 room flat has many advantages such as utility rebates. We may even get free food if some welfare organisations come to all the 2 room flats to give out food for the elderly as they usually think those staying in 2 room flats are poor. In fact there are many people who live in
HDB flats are rich and they own multiple private properties.
Quote:
Originally Posted by Unregistered
Is your job secure? Having a stable job and steady salary increment are key ingredients to building up sufficient retirement fund.
If you and spouse require $60k pa ($5k pm) in your retirement, the amounts over the years that you will need are :
10 yrs - $600k
20 yrs - $1.2m
30 yrs - $1.8m
With 3% ave inflation factored in, the amounts required become:
10 yrs - $687k
20 yrs - $ 1.6m
30 yrs - $2.2m
And this amount should not include your primary residence otherwise you will have to downgrade. Many people were caught unprepared without planning well ahead. When they retired they found that their savings were unable to last the distance and they had to reluctantly downgrade. For some, they had to downgrade a few times - from condo to 4 rm HDB, and then again to 2 rm flat.
My advice is to cut back your expenses where you can and plan to work as long as you can. $1.6m in networth which included the value of your home doesn't leave much room for error. Some more you already in your late 40s. |