How much are you earning per annum?

Originally Posted by Unregistered

Crap. You dont need $1.7m cash.

Oops my bad. The $1.7M doesnt need to be in cash. It can include anything that can be sold for cash such as your gold, property and other valuables.

If you need to survive, you need the cash. No two ways about it.

29 y.o, single. 170k base + 90k bonus. Pay 1800$/month for renting a room in a condo. Do you think I should invest in a condo rather than keep renting?

Originally Posted by Unregistered

29 y.o, single. 170k base + 90k bonus. Pay 1800$/month for renting a room in a condo. Do you think I should invest in a condo rather than keep renting?

Investment banking?

Originally Posted by Unregistered

I used think it was just a tactic by insurance agents to scare people to invest in their products.

But then I find the numbers (projected expenses, inflation) they threw up are actually factual numbers based on simple mathematics. The numbers are also purely based on your inputs - ie, how much you expect you will need to maintain your desired lifestyle in retirement, how long you expect to live in retirement, inflation rate and what buffer you want to factor in for emergencies or unexpected expenses.

Lets use the couple who think that they only need $2400 pm at today's dollars. Thats $28,800 pa. Now the couple also think they want to retire at 50 and expect to live to 85 years old (35 years in retirement). Lets use inflation rate of 3%. This is what the couple will need over the years. For simplicity, lets say the couple is 50 yo and retire now.

Age______year_____Annual amt($)____Cumulative($)
50_______1________$28,800_________$28,800
55_______5________$33,390_________$155,475
60_______10_______$38,700_________$335,700
65_______15_______$48,870_________$554,625
70_______20_______$52,016_________$806,840
75_______25_______$60,300_________$1,087,630
80_______30_______$69,900_________$1,413,130
85_______35_______$81,040_________$1,790,480

The annual expense increases because of inflation assumed at 3% pa. The $1.79M should not include their home otherwise they will have to sell off their home at some point in their retirement.

As you can see, even for a very basic bare minimum lifestyle of $2,400 pm, you still need at least $1.79M to last 35 years. One solution is what the gahmen has been advocating - dont retire too early. Work as long as you can.

If you need $5,000 per month in retirement and want to retire at 50, you can straight away know it will cost you $3.6M for 35 years in retirement.

It is all simple mathematics. No special ingredient, no magic. If you are scared, you should start looking at how to boost your savings instead of bluffing yourself that it is not real!

And this is why retirement age needs to be raised.

Originally Posted by Unregistered

Investment banking?

Tech company

Retirement extraordinary

Most people here worry about retirement while millions and billions around the world worry about their next meal. We sometimes worry unnecessarily. If we have an open mind and see the world as our oyster, then we will be less worried. Good for our health and well being.

For those who wish to retire early in their 50s but do not have so much assets, don’t worry. You can still retire if you change your life’s perspectives. If you don’t have any dependants and paid up your home and have some savings, you can retire. Not here though. You can retire in cheaper locations all over the world.

Take for example Malaysia. There are good places to retire in Malaysia. Places such as Penang, Ipoh and even KL. It all depends on the kind of retirement lifestyle you desire and the amount of resources you have.

If you sell your HDB flat for $500k, you can then invest in a portfolio of good blue chip stocks giving you an annual dividend yield of 5%. This means you get $25k pa in dividends. When you convert to RM, you get RM78k pa or RM6.5k pm.

Retire in Penang at age 55, assuming no dependants

Rent a small condo in Penang RM1k pm
Food and utilities RM1.5k pm
Car petrol and expenses RM0.5k pm
Others RM1k pm
Total RM4k pm
Savings RM2.5k pm

You can also retire in other cheaper locations such as Chiang Mai, Kota Kinabalu, etc.
With budget airlines, travelling has now become cheaper.

When you reach 65, you will become very rich. CPF Life ERS will give you and wife $4k pm or RM12.6k pm. Total passive income RM19k pm. Wow!!!!! With this amount of money, you can retire like a rich tycoon!

So, don’t worry, be happy. Open your small mind. Don’t be stupid.

Very good insight. Much better than the moron who keep harping that we need millions to retire. If we listen to him, no one in singapore can actually afford to stop working.

Originally Posted by Unregistered

How to retire at 55 assuming a retired couple needs $2400 pm. Assume they have a PAID UP HDB flat, NO debt, NO dependents and choose CPF Life ERS.

Between age 55 to 65, assuming an inflation rate of 3% pa, they will need $368,865 in total over the 10 years.

Between age 65 to 85, assuming an inflation rate of 3% pa, they will need $1,071,213 in total over the 20 years.

Between age 65 to 85, if they choose the CPF Life ERS, they will get $960,000 (i.e. $2000x2x12x20) in total over the 20 years (assuming they both pass away at 85). So, shortfall of $111,213 cash.

So, the couple will need $480,078 cash (i.e. $368,865 + $112,213) in total to retire at 55. Each of them must also have $249,000 in their CPF SA to choose the CPF Life (ERS).

So the amount of assets they must have (not including their home) is $978,078 (i.e. $480,078 + $249,000 + $249,000).

If they want more cash, at some point in their retirement, they can sell their current HDB flat and then buy a 2 room flexi flat for the elderly. For example, they can sell their 4 room HDB flat for $400,000 and then buy an elderly flat for $100,000.

some questions:-
lifestyle won't change from 55 to 85?
insurance? are we assuming that it will be paid by children?
what if couple has no children?
any room for buffer?

ultimately it depends what kind of life you are projecting here. can always retire with $200k and eat maggie for 3 meals and drink water. can rent out all the rooms and sleep in living room also.

get my point?

Brilliant idea. I'm inspired to retire overseas too. I can save a lot when I retire overseas which will allow me to travel the world during retirement. I heard many Singaporeans also retire in Thailand and they live very well there. Chiang Mai, Chiang Rai.

Originally Posted by Unregistered

Retirement extraordinary

Most people here worry about retirement while millions and billions around the world worry about their next meal. We sometimes worry unnecessarily. If we have an open mind and see the world as our oyster, then we will be less worried. Good for our health and well being.

For those who wish to retire early in their 50s but do not have so much assets, don’t worry. You can still retire if you change your life’s perspectives. If you don’t have any dependants and paid up your home and have some savings, you can retire. Not here though. You can retire in cheaper locations all over the world.

Take for example Malaysia. There are good places to retire in Malaysia. Places such as Penang, Ipoh and even KL. It all depends on the kind of retirement lifestyle you desire and the amount of resources you have.

If you sell your HDB flat for $500k, you can then invest in a portfolio of good blue chip stocks giving you an annual dividend yield of 5%. This means you get $25k pa in dividends. When you convert to RM, you get RM78k pa or RM6.5k pm.

Retire in Penang at age 55, assuming no dependants

Rent a small condo in Penang RM1k pm
Food and utilities RM1.5k pm
Car petrol and expenses RM0.5k pm
Others RM1k pm
Total RM4k pm
Savings RM2.5k pm

You can also retire in other cheaper locations such as Chiang Mai, Kota Kinabalu, etc.
With budget airlines, travelling has now become cheaper.

When you reach 65, you will become very rich. CPF Life ERS will give you and wife $4k pm or RM12.6k pm. Total passive income RM19k pm. Wow!!!!! With this amount of money, you can retire like a rich tycoon!

So, don’t worry, be happy. Open your small mind. Don’t be stupid.

Originally Posted by Unregistered

Very good insight. Much better than the moron who keep harping that we need millions to retire. If we listen to him, no one in singapore can actually afford to stop working.

Agreed. Many people will adjust their lifestyle when they get older. Of course, we still need to reserve sufficient money for healthcare related expenses etc. as this will be one expenditure that will eventually erode our savings in future. Normal expenses are easier to adjust, question of choice and adapting.