I dont really consider my wife and I a power couple, but our annual income exceeds $500k. This amount comes from a comination of our salary and passive income. We have been raking in this kind of income for the last 6 years. Before that, it was around $360k to $450k pa.
Our annual expense is $150k, saving almost $400k each year. Is this a luxurious lifestyle? I will tell you it is not. This is because we pay $30k pa in income taxes and another $36k in loans for our investment property. Meaning we spent only $84k pa on our lifestyle.
As you can see, once we retire, we can continue our lifestyle of $84k pa as we would not have to pay income taxes and no more home loans to pay.
As our passive income can comfortably cover (with a large buffer) our $84k pa expense, we dont have to downgrade our lifestyle in retirement.
Among my colleagues and friends, I am aware that a number of them have higher incomes than we do. And their lifestyles are not much different from ours leading us to believe that they have healthy savings/networth.
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Originally Posted by Unregistered
Yea, but I think it's most people actually are living beyond their means during working days rather than they 'cling' to their lifestyle and refuse to downgrade during retirement.
For e.g. if a couple makes $200k and lives a lifestyle of 60-70% of ~$130k and save the rest they can in theory retire at 65 and still maintain the $130k lifestyle.
The problem with most Sg professional / manager couple is they make $200k and live a lifestyle of $190-200k. Savings too small, lifestyle too high so double whammy cannot retire in peace.
Most are just banking on paying off mortgage and renting out the condo and live on rent. But reality is a typical 1000sqft condo in Sg is only fetching ~$35k gross and ~$30k net rent, not anywhere near to maintain their current lifestyle.
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