How much are you earning per annum?

You are still young. Don't worry too much, just focus on clearing your landed mortgage. By the time you retire at 65, you would have cleared your mortgage. Your landed could be worth $4m by then. You can then sell and buy the hdb studio apartment for the elderly (only $100k). You will have $4m cash to retire with.

Originally Posted by Unregistered

34/36
combined income pa (including bonus) - 300k
savings 72k pa
NETT assets - sgd1mil

long haul holiday , once a year
owns 2 cars (may sell 1)
staying in landed

plans to retire at 55 , not sure how much we should save.. / invest
feel free to comment...

45/47
$141k pa combined
Savings, $34k pa
Condo, worth $1.4m, paid up
Japanese car, paid up
Total net worth, $1.8m

Gurus, how can we retire?
Do we need to downgrade?
We love living in a condo
Pls help advise
Thank you

You both are actually doing resaonably well, compared to most Singaporeans.
First, you are debt free and your net worth is pretty decent. You should have no problem retiring at 65 provided you downgrade, but the good news is you can still stay in a condo. You need to downgrade to a smaller condo, either a studio or one bedder condo unit.

Your CPF Special Account will continue to grow, now the Min sum is $155k and this will likely to grow to $220k over the next 8-10 years. The payout will also increase to $2800 pm if the Min sum is $220k. This is my estimate, could be more or less. So, when you reach 65, your combined monthly payout from your CPF Life is $5,600.

As for your condo, let's say you sell at $1.8m and you then buy a small unit for $800k. You will have $1m cash after the transactions. And let's say you have an addtional cash savings of $500k when you reach 65. So, in total, you would have $1.5m and if you invest in good bluechips that give 5% dividend yield, you will get $75k pa or $6,250 pm. So, together with your retirement account payout, you should get a monthly passive income of $11,850. This is huge for a retired old couple.

Originally Posted by Unregistered

45/47
$141k pa combined
Savings, $34k pa
Condo, worth $1.4m, paid up
Japanese car, paid up
Total net worth, $1.8m

Gurus, how can we retire?
Do we need to downgrade?
We love living in a condo
Pls help advise
Thank you

sorry, the payout should be about $1,700 pm if min sum is $220k. below is the amended sums.

Originally Posted by Unregistered

You both are actually doing resaonably well, compared to most Singaporeans.
First, you are debt free and your net worth is pretty decent. You should have no problem retiring at 65 provided you downgrade, but the good news is you can still stay in a condo. You need to downgrade to a smaller condo, either a studio or one bedder condo unit.

Your CPF Special Account will continue to grow, now the Min sum is $155k and this will likely to grow to $220k over the next 8-10 years. The payout will also increase to $1700 pm if the Min sum is $220k. This is my estimate, could be more or less. So, when you reach 65, your combined monthly payout from your CPF Life is $3,400.

As for your condo, let's say you sell at $1.8m and you then buy a small unit for $800k. You will have $1m cash after the transactions. And let's say you have an addtional cash savings of $500k when you reach 65. So, in total, you would have $1.5m and if you invest in good bluechips that give 5% dividend yield, you will get $75k pa or $6,250 pm. So, together with your retirement account payout, you should get a monthly passive income of $9,650. This is huge for a retired old couple.

I always start by looking at the cash flow situation first. With very limited info that you provided (for eg. You did not say if you have kids, if so how old they are, any other dependents like parents etc), I can only provide a very rough assessment.

Looking at your cash flow my initial thoughts were that your savings is very dismal, but then again your annual expense of $107k is quite typical of families staying in a condo, with a jap car. And you also do not have any other income from investment or business. So that means limited upside to savings unless you drastically cut down your expenses or hope for big jump in salaries.

You need to begin thinking about where your retirement cash flow will come from once your salary stopped. As long as your assets are not generating cash flow, they are not helping you once you have no more employment income. My point is your total net worth is meaningless until you start making it provide you the money for your daily needs.

For eg. you cannot touch your CPF SA account till you are 65. When you reach 55, the required amount for CPF SA account would probably be $250k per person or $500k for both of you. And then there is the MA account which also cannot be "touched" except for medical expenses. This MA account for both of you combined could probably be $200k when you are 55. That means you cannot touch a total of $700k in your CPF account!

Then you want to stay in your condo. No matter much it appreciated, it is not generating cash flow for as long as you are staying in it.

Finally what you have available for you to live on will be your CPF OA and your cash. With $34k savings pa, in 10 years, you are looking at $340k savings. At $60k pa expense, this amount will be gone in 6 years.

The prognosis is you cannot stay in your condo when you retire. You need to downgrade to free up the needed cash.

Originally Posted by Unregistered

45/47
$141k pa combined
Savings, $34k pa
Condo, worth $1.4m, paid up
Japanese car, paid up
Total net worth, $1.8m

Gurus, how can we retire?
Do we need to downgrade?
We love living in a condo
Pls help advise
Thank you

I also agree with the other gurus that you cannot continue living in your current condo as you do not have sufficient cash for your retirement. As suggested, you will have to sell your big condo (likely to be a 3 bedder?) when you retire and move into a cheaper place. You can downgrade to a smaller and cheaper condo or a HDB flat. You can even consider the HDB studio apartment for the elderly which only costs $100k now. This elderly flat will be more expensive in the future but will not be so expensive.

Originally Posted by Unregistered

45/47
$141k pa combined
Savings, $34k pa
Condo, worth $1.4m, paid up
Japanese car, paid up
Total net worth, $1.8m

Gurus, how can we retire?
Do we need to downgrade?
We love living in a condo
Pls help advise
Thank you

Originally Posted by Unregistered

I don't see how the logic point to the fact that he can retire just because he may have higher net worth at this point than his peers. Whether or not he can retire should be based on the kind of lifestyle he aspires to lead in retirement.

I think each generation is different. Our parents' generation (those in their 70s and above) may be contented just to see their children grow up and have their own families, and for themselves to step back and lead simple routine lives. Day in, day out doing the same boring stuff. For them, $2k - $3k a month for a couple should be comfortable.

For our generation, expectations would be higher. We are more exposed to the world at large, having travelled widely, some even studied overseas, have maids to clean up after us, have cars and hobbies, attended concerts, plays, and electronic gadgets to occupy our time. I can't imagine we can just switch back to a boring routine lifestyle upon retirement. And some more for many years at that, just whiling away the time waiting for time's up.

In my retirement, I would still want a car, a maid to tidy up the house and cook, attend concerts and performances, continue to play my tennis games, golf with my kakis and manage my stocks and property investments. This will make my retirement meaningful and make me look forward to each waking day. For this lifestyle I estimated I would need around $8k a month or $100k pa. I would need 2 more years to establish my passive income stream to reach $100k pa from the current $70k pa.

I think you are just boasting your lifestyle here. If money is not enough, what's there to talk about lifestyle?

That may be the case, but I thought he drove home the point about the need to know what kind of lifestyle you want to lead before talking about retirement. Many posters here ridiculously asked for advice on retirement without specifying the lifestyle they expect to lead in retirement.

For many, the reality is that they may have to work till a ripe old age. To modify your phrase "if money is not enough, what's there to talk about retirement?"

At least the poster knows the lifestyle he wants in retirement, and he knows how much he needs to sustain that lifestyle. And he is taking steps to achieve that goal. On the other hand, you see posters still living the high life and saving very little and still dreaming about living the same way in their retirement.

Originally Posted by Unregistered

I think you are just boasting your lifestyle here. If money is not enough, what's there to talk about lifestyle?

Let me tell you a SECRET. There is a big loop hole in the current housing policy. Do you know that private property owners cannot buy a resale HDB flat unless they sell their private property within 6 months of buying a resale HDB flat? BUT a HDB flat owner who has met MOP of 5 years can happily buy as many private properties they like without selling their HDB flat. They then rent out their HDB flat to needy families. So many filthy rich people HOARD their HDB flat. They may let it empty and so you can have a block of flats with many empty flats because they were bought by children of rich families who bought HDB flat (BTO or resale) flats, they just leave these flats empty while they stay in their parents' big bungalows and after MOP, they sell their flats to get profits of $200k - $300k.

So, what you can do to take advantage of this big loophole is to sell your condo now for $1.4m and buy a nice resale HDB flat for $400k at Punggol and stay for 5 years (MOP). You invest your net balance of $1m cash in 5% dividend stocks to get $50k pa, and after 5 years you collect $250k. After MOP, you then buy back a condo and stay in the condo while you rent out your HDB flat (just get HDB's approval, easy to get approval) and easily collect rental income of $3k pm or $36k pa. So, in your retirement at 65, you will get passive income from your HDB flat rental income plus from your CPF Life payout. You can get about $7k pm of passive income in your retirement plus you own two fully paid properties - a HDB flat and a condo - and you can continue to live in a condo during your retirement.

Take advantage of this loophole now while it is still there.

Originally Posted by Unregistered

45/47
$141k pa combined
Savings, $34k pa
Condo, worth $1.4m, paid up
Japanese car, paid up
Total net worth, $1.8m

Gurus, how can we retire?
Do we need to downgrade?
We love living in a condo
Pls help advise
Thank you

I am 39 years old and hubby 42 years old. Income 150k pa for me and hubby 's varies as job unstable from 20k to 90k pa so far. We have a freehold terrace bought at 1.1 mil 4 years ago and now worth about 2 mil and a 1 bedder condo bought at 600k+ about to TOP and just got state consent for a semid in JB Tebrau bought at 380k last year. Outstanding mortgages is about 1.4 mil and have a car with 150k morthage. But networth is about 2.4 mil as assets more than liabilities though that includes the primary residence which is our terrace.

Our retirement plan is to either stay in our MM or semid in JB and rent the rest. Problem is 2 kids uni fees if they want to go overseas so hopefully they study local if not may need to sell off one property to finance or work longer.

Current expenses are high because of car and mortgage payments about 15k combined a month. Though can still cope due to low interest rates but savings per year not much due to hubby's job situation. That is why we bought JB as it can enable us to retire or semiretire and earlier too as we can pay off our terrace and have about 4k to 5 kwhich is rm 10k or more to survive in JB with a malaysia car in a few years time. Kids can study international school though a bit ex at about S$800 to 1k a month. If RTS is up by 2019 can then have option of semiretiring and kids option of studying in Sg schools with less jams.

If we want to retire in Sg also possible just that I would have to work much longer. Our properties are our best assets esp our landed.

But sometimes do worry about the future of our country and future property values as I think there is a big bubble here and property is overpriced so also thinking of selling our landed perhaps to semi retire in Malaysia earlier. Got many offers of 1.8mil as valuation has dropped. Still having viewings and may consider selling if we get a good offer.