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How much are you earning per annum?

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  #10701 (permalink)  
Old 26-12-2016, 09:10 AM
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George Michael just passed away at 53.

Those who are thinking of retiring only when they are 65, think again. You may not live that long.

You don't need to retire only when you have $10m.

You can retire if you have $1m cash.

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  #10702 (permalink)  
Old 26-12-2016, 09:47 AM
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There are many people who die young either through illness, drug overdose, accident or war. However for every person that die young, there are hundreds of thousands of people around the world who will celebrate their 65th birthday each day and will live well into their 80s.

You don't have to look far, in Singapore, the life expectancy of Singaporeans is fast catching up with Japan. Our life expectancy at 83.1 years has already outpaced that of the US at 79.3 years. Japanese life expectancy is 83.7 years. And we know there are many centenarians (100 year olds) in Japan and US. Likewise in Singapore, there are many approaching their 90s. The first batch of our baby boomers (born in 50s to 60s) have started drawing down their CPF Life annuities.

The problem is that the average Singaporean's savings is woefully inadequate to match their longer life expectancy. The government is acutely aware of this - that's why the implementation of CPF Life scheme as well as the continuous urging of Singaporeans to work longer, as long as they can work.

My take of the issue is - we control our own destiny and we ourselves decide what outcome we will face. There are 4 possible scenarios/outcomes

Scenario 1. Work longer, save more but die young. Savings can be bequeathed to our loved ones to help ease their financial burden or if no loved ones, the money can be given to charity. Either way, people will appreciate your kindness.

Scenario 2. Work longer, save a lot and live long long. In this scenario, at least you won't be a financial burden to your children. And you can live your life with confidence and dignity. You can also contribute regularly to charity even in your old age.

Scenario 3. Retire early (for e.g. before 50), inadequate savings and live long long. Become a financial burden to people. Live a miserable and parasitic life. Lose self esteem and dignity. Likely to re-enter workforce in late 60s or 70s at low skill low end jobs. Worse outcome - take own life.

Scenario 4. Retire early (e.g. before 50), inadequate savings and die early/young. Leave nothing behind for loved ones who have to struggle and fend for themselves. Worse case, leave behind debt e.g. housing loan, car loan etc..

We, ourselves are responsible for our own lives. Make sure we don't pass the burden to others.

Quote:
Originally Posted by Unregistered View Post
George Michael just passed away at 53.

Those who are thinking of retiring only when they are 65, think again. You may not live that long.

You don't need to retire only when you have $10m.

You can retire if you have $1m cash.


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  #10703 (permalink)  
Old 26-12-2016, 09:56 AM
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Quote:
Originally Posted by Unregistered View Post
George Michael just passed away at 53.

Those who are thinking of retiring only when they are 65, think again. You may not live that long.

You don't need to retire only when you have $10m.

You can retire if you have $1m cash.
stupid. might as well say some kid died of illness at age 5 or something and say no point in saving for retirement.

proper retirement planning means having enough even if you live longer than average... not by thinking there's a chance of dying young so there's no need to save so much.

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  #10704 (permalink)  
Old 26-12-2016, 12:02 PM
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stupid. might as well say some kid died of illness at age 5 or something and say no point in saving for retirement.

proper retirement planning means having enough even if you live longer than average... not by thinking there's a chance of dying young so there's no need to save so much.
You're the stupid fool.

Look at the statement carefully. No one says you should not plan for retirement. You definitely should. The point is not to over work until you die without enjoying your retirement. Imagine you work until you are 70 years old and save $10m. You then die at 71. Then you're the stupid fool.

If you have $1m cash, you can retire. Just be smart. Don't be stupid.
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  #10705 (permalink)  
Old 26-12-2016, 12:59 PM
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If you've been following the news, you would know of stories of workers losing their jobs. Those in the manufacturing and Oil & gas sectors are worst hit. If you're an overpaid company manager with huge salaries but low productivity, you may also lose your job. Middle managers may be redundant. Those working in banks are also getting retrenched especially if they are not productive and cost too much. Technology can replace their jobs.

If you are jobless and has a family to feed, what do you do? Finding a new job may not be easy. If you really cannot find a new job after many months, then it is time you take control of your life. Discard all pride and prejudices. Be humble. You can become a private car driver such as Uber or Grab driver. You become your own boss and run your business as a driver.

If you lost a high paying job that was paying for your condo and now you're unable to get a new high paying job, then you have no choice but to swallow your pride and downgrade to a small 3 room HDB flat. You can sell your condo, pay off the mortgage and use the net proceeds to pay for a HDB flat. Let's say your condo is worth $1.35m and your mortgage is $1m. Your net proceeds of $350k can buy you a 3 room HDB flat and you can pay in full. So now you don't have to worry about a roof over your head. Next, you need to worry about the basic necessities such as food and utilities. If you and wife can earn a combined income of $4k pm, you should be ok since you're debt free. Just make sure you do not overspend on food and luxury goods. Also you don't need to own a car since you already drive a rented Uber or Grab car.

If you are 55 and above and you got retrenched, for example if you're a retrenched engineer, and you don't have any dependents, then you can retire if you don't want to be a Uber or Grab driver. You can rent out your whole 4 room HDB flat for S$2,000 pm and use this to retire in lower cost countries such as Malaysia, Thailand, Indonesia, Vietnam, Cambodia, etc. If you retire in Malaysia, you will get RM6,200 pm after currency conversion ($S1 = RM3.10). This would be enough for a retired couple. You can rent a new 2 bedroom condo in JB, KL or Penang for only RM1,200 pm. You don't have to buy a property in Malaysia as there is a big oversupply of empty properties there. You can also rent a newer condo after every few years. You then have RM5,000 pm to spend on food, utilities and transport. A lot of money by Malaysian standards. If you want to retire more comfortably, you can retire in Thailand, Vietnam, Cambodia or Indonesia. S$2,000 pm is a lot of money in these countries.
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  #10706 (permalink)  
Old 26-12-2016, 05:18 PM
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Default Driving for Uber?

Can you make a decent living driving for Uber?

Here are some comments from Uber drivers:

"Pay is only enough to keep my car in working condition. The company takes enough out of my fare enough to take the wind out of my sails as their contractor/employee. The hardest part of the job is dividing what you can save for car maintenance and what you need for gas. Beyond that, there is little profit for you to earn. You can increase that margin of profit if you drive a fuel-saver-type car with a good EXTENDED warranty. I do not know any other Uber drivers neither casually through work nor in real life. The most enjoyable part of the job is meeting the riders."

"This was without a doubt one of my favorite jobs ever. I have a service background and I'm and excellent conversationalist so my ratings were always high. Then came the day when my car needed a repair. All of a sudden the math didn't work out. Plus I went in knowing that there was no future in Uber. Ten years from now cars will be driving themselves. So I sold my car and went from driver to rider."

"Fare prices are set so low that unless you are getting back to back rides, or getting lucky with long distance runs, you will be making around minimum wage after expenses if you're lucky. This is definitely not something you should make a long term job. Not to mention the plan to phase out human drivers entirely over the next decade."

"I really don't like the way we have to deal with Uber just through email is not a way how to deal with the company that year working. It's putting a lot of wear and tear on my vehicle. I have to make sure I keep up with it and gas is getting outrageous. It's like I'm not making any money because all my money that I make is going into my car what about my bills that I have to pay for. Only thing I like about Uber I go out every day and meet new people"
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  #10707 (permalink)  
Old 27-12-2016, 09:00 AM
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Default Why I am targeting $6m in savings

It is everyone's dream / wish that their retirement savings do not get depleted - for as long as they live, and upon death, they can bequeath the same starting amount or more to their loved ones. All this while, maintaining a certain standard of living in their retirement.

Well, it is actually possible to achieve such a state of savings. For the wealthy, this was what they have been doing for generations, handling their wealth down to the next generations.

What about for us wage earners? It is still possible - difficult but possible.

Assuming your retirement expense is $50k pa and you expect to live in retirement for 30 years. With an inflation of 3% pa, and an investment return, also of 3%, you will need a minimum of $1.5m to cover the 30 years in retirement. At the end of 30 years, you will completely draw down the entire $1.5m. So to have something to bequeath to your loved ones, you will need to have more than $1.5m at the start of your retirement.

For my case, since I want to maintain the same lifestyle and standard of living when retired, that we are enjoying now, our estimated expense is $100k pa. This means minimally I would need at the start of retirement a sum of $3m to last us 30 years in retirement with 3% inflation and 3% return on investment. So to leave something behind for my loved ones I would need more than $3m in savings.

With $6m in retirement savings, you can apportion $3m to fund your retirement for 30 years, while the other $3m is kept aside for bequest. At 3% inflation and 3% return on investment, the $3m set aside for retirement expenses will be totally consumed over 30 years, while the other $3m will grow back to $6m! (over 30 years)!

Likewise, if your annual expense in retirement is only $50k, you just need $3m in retirement savings to leave behind $3m in bequest to your loved ones - while still fully funding your retirement over 30 years.

What is a $100k pa lifestyle? We aim to travel overseas once or twice a year, attend live concerts, have a car, have a maid, continue with our present hobbies (golf, tennis etc), stay in our current condo....as what we are currently enjoying now.
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  #10708 (permalink)  
Old 27-12-2016, 10:46 AM
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$6m at retirement? 99% of Singaporeans won't be able to make it. Your suggestion is plain stupid.


Quote:
Originally Posted by Unregistered View Post
It is everyone's dream / wish that their retirement savings do not get depleted - for as long as they live, and upon death, they can bequeath the same starting amount or more to their loved ones. All this while, maintaining a certain standard of living in their retirement.

Well, it is actually possible to achieve such a state of savings. For the wealthy, this was what they have been doing for generations, handling their wealth down to the next generations.

What about for us wage earners? It is still possible - difficult but possible.

Assuming your retirement expense is $50k pa and you expect to live in retirement for 30 years. With an inflation of 3% pa, and an investment return, also of 3%, you will need a minimum of $1.5m to cover the 30 years in retirement. At the end of 30 years, you will completely draw down the entire $1.5m. So to have something to bequeath to your loved ones, you will need to have more than $1.5m at the start of your retirement.

For my case, since I want to maintain the same lifestyle and standard of living when retired, that we are enjoying now, our estimated expense is $100k pa. This means minimally I would need at the start of retirement a sum of $3m to last us 30 years in retirement with 3% inflation and 3% return on investment. So to leave something behind for my loved ones I would need more than $3m in savings.

With $6m in retirement savings, you can apportion $3m to fund your retirement for 30 years, while the other $3m is kept aside for bequest. At 3% inflation and 3% return on investment, the $3m set aside for retirement expenses will be totally consumed over 30 years, while the other $3m will grow back to $6m! (over 30 years)!

Likewise, if your annual expense in retirement is only $50k, you just need $3m in retirement savings to leave behind $3m in bequest to your loved ones - while still fully funding your retirement over 30 years.

What is a $100k pa lifestyle? We aim to travel overseas once or twice a year, attend live concerts, have a car, have a maid, continue with our present hobbies (golf, tennis etc), stay in our current condo....as what we are currently enjoying now.
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  #10709 (permalink)  
Old 27-12-2016, 11:24 AM
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Dont use your own situation to project for the rest of the work force. You will be surprised at how much some people do earn.

Anyway, I am not suggesting $6m for everyone. It depends on what retirement lifestyle you aspire to have as well as how much you want to bequeath. You only need $3m if you expect to spend $50k pa in retirement and you still can bequeath $3m to your loved ones at the end of 30 years in retirement.

Many people made the mistake of retiring once their home loan is paid up, once their children become independent of them. This is the period where their expenses are the lowest and their savings is highest. They should prolong this period and they will be amply rewarded with accelerated savings. I am seeing and enjoying this period first hand!

Every year that we work, we are able to save for 3+ years of retirement expenses. This has been going on for a few years already.


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$6m at retirement? 99% of Singaporeans won't be able to make it. Your suggestion is plain stupid.
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  #10710 (permalink)  
Old 27-12-2016, 12:06 PM
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You don't need to spend $100k pa in retirement. If your hdb flat is paid up and you have passive income of $3.6k pm from your CPF Life, you can retire at 65. Provided you don't own a car, employ a maid and go to restaurants everyday.


Quote:
Originally Posted by Unregistered View Post
Dont use your own situation to project for the rest of the work force. You will be surprised at how much some people do earn.

Anyway, I am not suggesting $6m for everyone. It depends on what retirement lifestyle you aspire to have as well as how much you want to bequeath. You only need $3m if you expect to spend $50k pa in retirement and you still can bequeath $3m to your loved ones at the end of 30 years in retirement.

Many people made the mistake of retiring once their home loan is paid up, once their children become independent of them. This is the period where their expenses are the lowest and their savings is highest. They should prolong this period and they will be amply rewarded with accelerated savings. I am seeing and enjoying this period first hand!

Every year that we work, we are able to save for 3+ years of retirement expenses. This has been going on for a few years already.
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