According to the Singapore Statistic department (.singstat.gov.sg/docs/default-source/default-document-library/statistics/browse_by_theme/population/time_series/hhinc.xls), the number of household earning $15k and above per month is 20% of all HH in 2014 compared to 5.9% in 2004!

The biggest jump was seen in those HH earning $20k and above per month. In 2004, these HH was only 2.9% of all HH, last year 2014, it grew to 11%

This thus explains why car prices and property prices were able to hold up well in spite of the various cooling measures and increased COE prices.

People here are earning more and with increasing HH income, inflation typically follows.

As long as you are still in the workforce, you should still be able to keep ahead of the inflation as your salary would be adjusted for inflation, if not ahead of it. For eg, just recently the wages for nurses and teachers were increased, prompting other civil service agencies to review their staff salaries.

This is not a one off thing. Every few years the cycle of wage increase and inflation rises repeats.

The question is how are those who have already retired going to cope? One way is to ensure your passive income is able to grow and keep pace, if not keep ahead of inflation. The other way is to ensure you planned a lot of buffer into your expenses. For eg, if you think you will only spend $5k a month, you planned for $8k per month with a $3k buffer. This will give you some more years in spending your retirement fund.

Those who retired young or planning to retire young, have to think through properly how their finances is going to last them 30 to 40 years.

My uncle retired 15 years ago when he was 58. Then people earning $5k pm was considered high income earner. Now people earning this amount can even qualify for housing subsidies. Times have really changed in just 15 years. He is now worried if his savings can outlast him with things costing much more than when he just retired.

His last resort plan was to go back into the workforce like some of his friends did. Working as security guards, McDonalds and admin assistants. In his 70s, he does not have many options.