How much are you earning per annum?

Originally Posted by Unregistered

You should only quit as a very last resort and not because your passive income meets your current needs. Most people do not project or factor in their future needs and inflation effects into their financial models and risk miscalculating their future financial needs.

If your passive income currently just about cover your expenses, and you are still young (like below 55), then the chances that your expense will exceed your passive income in the future is very, very high.

The most ideal model of passive income is where the income keeps pace with inflation and your capital also appreciates. Shares and properties have this quality. Most annuities dont. That's why I dont advocate putting too much money into annuities. All of us already have the CPF life annuity so dont need to buy any more.

Shares of a progressive company will grow in value as the company business grow, and the dividends grow with it. Property value and rental rises with the country's economy. In land scarce Singapore, there is only so much land.

Whenever you dont feel llike working, you should go and read up on the real life stories of unemployed fellow Singaporean in Transitioning dot org website. You will then realise how fortunate you are to have a job.

Thanks. I think this is good advice. I understand how fortunate I am to have a job. My aim is to build up passive income to the level that it covers my expenses with leftover for reinvestment. This way, the income should hopefully keep pace with inflation. To me, expenses can be adjusted. The only unknown is medical expenses. Keeping a job has the advantage of medical coverage. I suppose when I say I'm not sure whether to stay on in the job or quit, I mean quit to do something less stressful, perhaps more meaningful, at a lower pay. But of course, also understand that lower paying jobs may not necessarily be less stressful.

May I know how much is your current passive income, your current expenses and the projected expenses if you stop working?

Originally Posted by Unregistered

Thanks. I think this is good advice. I understand how fortunate I am to have a job. My aim is to build up passive income to the level that it covers my expenses with leftover for reinvestment. This way, the income should hopefully keep pace with inflation. To me, expenses can be adjusted. The only unknown is medical expenses. Keeping a job has the advantage of medical coverage. I suppose when I say I'm not sure whether to stay on in the job or quit, I mean quit to do something less stressful, perhaps more meaningful, at a lower pay. But of course, also understand that lower paying jobs may not necessarily be less stressful.

Sole breadwinner, 49, earning $130k pa. Condo, $1.2m, paid up. Bought in 2006 for $600k (upgraded from HDB flat). Cash and CPF, $300k. Car, Jap luxury model, paid up. No other assets. My net worth, $0.9m. Spouse net worth, $0.7m.

We lead a comfortable middle income lifestyle. Need some ideas on retirement preparation.

Any ideas how we should retire?

I always thought single income families are risky propositions. If anything happens to the sole breadwinner, the whole family'slivelihood is in jeopardy. So I admire the courage of sole breadwinners slogging it out for the family alone.

When I first got married I promised my wife that I will readily take on the role of sole provider and that she was free to decide if she wants to be a homemaker. While waiting for our HDB flat (we were told it would be 2 years or more), we decided to explore private property. Looking at the prices of the properties, my pragmatic wife felt that the only way we could afford to live in a condo was for both of us to work.

It has been 30 years now, and we are both still working. I am forever grateful to her for her contribution to the family income and more importantly I felt less stressed and worried about the livelihood of our family should anything untoward happens to one of us.

At mid-way in our careers, our income level grew to a level where we just needed one person's salary to cover our expenses while fully saving the other. The percentage saved got higher and higher as we progressed in our careers. Now we can save about 75% of our combined income, helped by the fact that our property loan got reduced along the way. In other words, for every year we worked now, we could save for 3 years of expenses. So we planned to work till 60 (another 5 years) we would save for another 15 years of expenses!

Sorry, I got carried away...

Originally Posted by Unregistered

Sole breadwinner, 49, earning $130k pa. Condo, $1.2m, paid up. Bought in 2006 for $600k (upgraded from HDB flat). Cash and CPF, $300k. Car, Jap luxury model, paid up. No other assets. My net worth, $0.9m. Spouse net worth, $0.7m.

We lead a comfortable middle income lifestyle. Need some ideas on retirement preparation.

Any ideas how we should retire?

Originally Posted by Unregistered

Sole breadwinner, 49, earning $130k pa. Condo, $1.2m, paid up. Bought in 2006 for $600k (upgraded from HDB flat). Cash and CPF, $300k. Car, Jap luxury model, paid up. No other assets. My net worth, $0.9m. Spouse net worth, $0.7m.

We lead a comfortable middle income lifestyle. Need some ideas on retirement preparation.

Any ideas how we should retire?

You can sell your big condo and buy a small one bedroom condo. For instance you sell your condo at $1.2m and buy a small condo at $700k. You then have $500k cash to invest, which can give you $25k pa in dividends. You will also get the CPF payout of $14k pa.

Our HDB flat is an important asset for all of us. Our property asset appreciation policy has done well. This is good as many of us can now retire well. We must ensure the value of our property asset continue to go up. If our property value do not go up, then we all cannot retire well.

When we retire at 65, we can sell our HDB flat and buy a studio HDB flat for the elderly. If our HDB flat is worth $800k and the elderly flat cost $100k, we can pocket $700k in cash. This is enough for us to retire well.

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Property assets make up 80% of Singaporeans' wealth

By Linette Lim

20 May 2014 22:27

URL: ://.channelnewsasia.com/news/business/singapore/property-assets-make-up/1113998.html

Property assets make up 80 per cent of the total wealth of an average Singaporean, according to financial advisory firm Financial Alliance.
SINGAPORE: Property assets make up 80 per cent of the total wealth of an average Singaporean, according to financial advisory firm Financial Alliance.

And with Central Provident Fund (CPF) money being used for property purchases, savings meant for retirement are being locked up in real estate.

Amid this backdrop, the Ministry of Manpower has said it will "review and make improvements" to the CPF system.

This follows President Tony Tan Keng Yam's address in Parliament last Friday.

The CPF Minimum Sum is the amount of money that one needs to set aside in the CPF account on reaching the age of 55.

And if there are insufficient funds, individuals will not be able to withdraw any cash at all although they will receive monthly payouts.

Financial advisors say less than half of Singapore's working population have enough to meet the minimum sum, which is currently S$155,000.

Tan Siak Lim, financial advisory director at Financial Alliance, said: "So today, I think that's the challenge. And I guess the reason why we are in the current situation is because of appreciating assets in the property (market)."

With property prices rising steadily over the past decade, more CPF money meant for retirement has been committed to mortgages.

For a middle income earner in his forties with multiple dependants, in order to retire comfortably Financial Alliance says he will need to save about a third of his monthly salary.

Mr Tan said: "There're already plenty of private sector investment products, retirement products for the consumer to choose (from). So that is not the problem.


"The problem is -- 'where is the money to invest in these products?'"


He said for an average, middle to low-income earner, there is not a lot of surplus cash beyond just meeting one's monthly living expenses.


To ensure retirement adequacy, the government is looking at options such as reverse mortgage schemes to help retiring or retired Singaporeans unlock the value of their homes.


Under a reverse mortgage, the owner retains the full lease of his flat but takes a loan against it as collateral.


The owner then repays the loan with accumulated interest upon termination, or death, usually with the sales proceeds from the flat.

I love our CPF and HDB system.

Last time buy flat at $150k. Now the value of flat is $600k, increase by 4 times over 20 years. I think no other investment in the world can give this type of return.

We are so lucky as Singaporeans !!!!!

If you are a Singaporean, find a wife fast and buy a BTO flat. Nowadays can buy BTO flat very cheap for $150k +, then after MOP (5 years) your flat value will go up a lot. You can easily sell for $250k +.

If you are a low income couple, you can buy a 2 room flat for $10k only. No country in the world is so generous and kind.

Originally Posted by Unregistered

May I know how much is your current passive income, your current expenses and the projected expenses if you stop working?

Current passive income is about $30k. Current expenses a year also about this amount, not counting taxes, which I assume I won't need to pay once I retire. I'm single. In early 40s.

Originally Posted by Unregistered

Current passive income is about $30k. Current expenses a year also about this amount, not counting taxes, which I assume I won't need to pay once I retire. I'm single. In early 40s.

ok, are you a man or lady?

Originally Posted by Unregistered

I love our CPF and HDB system.

Last time buy flat at $150k. Now the value of flat is $600k, increase by 4 times over 20 years. I think no other investment in the world can give this type of return.

We are so lucky as Singaporeans !!!!!

If you are a Singaporean, find a wife fast and buy a BTO flat. Nowadays can buy BTO flat very cheap for $150k +, then after MOP (5 years) your flat value will go up a lot. You can easily sell for $250k +.

If you are a low income couple, you can buy a 2 room flat for $10k only. No country in the world is so generous and kind.

You must be from a certain political party.

I have stayed overseas for many years, and experienced the type of basic housing that is a million times better than the crap in singapore. Big spaces, quality furnishing and a pool are considered basic there. Not cramped, poorly maintained HDB with yelling neighbours and rats running about below.