My plan is to work as long as I can, both to make myself useful to society and to keep my mind occupied. Financially, I think I have enough now to retire comfortably. But just in case, things do not go according to plan, and the company decides to give us oldies a golden handshake, the below financial plan will kick into action.
Currently, my wife and I easily squirreled 75% of our annual salary. The 25% that we spend each year is well covered by our passive income. So in the event that we retire, the passive income will be our main source of sustenance.
Dividends : $50k pa
Rental: $42k pa
Bonds interest : $15k pa
CPF interest : $32k pa (we are in our mid-50s, so we can withdraw the interest if we need)
Total : $139k pa. This amount is just about enough to cover our $120k pa expense.
As we are still working and hoped to continue working, the passive income is saved and reinvested.
When we reach 65, we are expecting to get:
Dividends : $60k pa
Rental : $42k pa (same property and assuming status quo in rental market)
Bonds : $30k pa
CPF interest : $35k pa (our combined OA will reach $1.4m)
CPF Annuity Life : $35k pa (combined for both of us)
Total about $200k pa.
So how much would we need/have to generate the above?
Stocks : $1.2m (bear in mind that we started investing years ago, so our invested amount is actually lower)
Rental : $1.1m (ok, we bought this rental property a little on the high side)
Bonds : $600 k
CPF OA : $1.4m (combined)
CPF Annuity
CPF Life amount : ($161k for wife & $241k for myself)
Total principal required is $4.7m!
This does not include the home we stay in.