How much are you earning per annum?

Originally Posted by Unregistered

I'm 55 and plan to retire next year.
Here's the plan:
1. Sell my condo (paid up) for $1.3m.
2. Buy a 4 room hdb flat for $400k, pay in full using CPF from my account and wife's CPF accounts combined.
3. Invest in blue chips to get 4% dividend from $1.3m stocks portfolio ($52k pa).
4. Rent out 2 rooms for $600 pm each ($1200 pm) or $14.4k pa
5. Wife, 50, continue to work until 55 ($80k pa)

Total income = $146.4k pa
Total expenses = $60k pa

When I reach 60 and wife reach 55 (after 5 years staying in flat) do lease back, get $900 pm or $10.8k pa. Total income $77.2k pa

At 65, get another $1200 pm (or $14.4k pa) from CPF Life, so total income is $91.6k pa.
When wife reach 65, wife gets CPF Life payout too, so total income will be $106k pa.

Note: Children are currently young adults and staying on their own.

What do you think of our plan?

Sounds good. But you should take some time to accummulate blue chips and not buy at one go, so as to get a good price.

47 & 46, $190k pa combined. Stays in a $1.5m condo, paid up.
Cash, CPF combined, $500k. Total net worth, $2m.

Retirement plan at 65 is to sell condo and buy a 4 room flat and fully renovate the flat.
Will use cash to invest in high dividend stocks. Will get payout from CPF Life every month.
We hope the CPF minimum sum will rise higher so that our payout will be higher. We hope the payout will be $2000 pm for each of us when we reach 65.

Our projected passive income:

CPF Life payout (wife and I) = $4000 pm
Dividends = $8000 pm ($2m portfolio)
Total = $12000 pm

Our projected expenses = $5000 pm
We don't intend to employ a maid and will not own a car

Savings = $7000 pm

39 & 38, $790k pa combined. Stays in a $800k hdb 5-rm, paid up. Driving a 6-yr old Jap car paid up. 2 invt properties worth $3m, equity around $650k.

Cash, CPF combined, $2.5m. Total net worth, ard $4.8m.

No specific retirement plan cos still young, just focusing on saving aggressively.

Savings around $28k/mthly

Originally Posted by Unregistered

39 & 38, $790k pa combined. Stays in a $800k hdb 5-rm, paid up. Driving a 6-yr old Jap car paid up. 2 invt properties worth $3m, equity around $650k.

Cash, CPF combined, $2.5m. Total net worth, ard $4.8m.

No specific retirement plan cos still young, just focusing on saving aggressively.

Savings around $28k/mthly

Given the uncertain nature of your job and industry (financial sector), it is best you prepare for the worst. Have you ever wondered what if both of you got retrenched at the same time? Your $790k pa pay will be meaningless as it will gone in an instant. Worse still, your investment properties can crash by more than 50% due to the oversupply.

So, you should save more and deleverage and sell one of your investment properties. You should also consider selling your flat and downgrade to a 3 room flat. You should also sell your car and take public transport. Better be safe than sorry.

Originally Posted by Unregistered

Given the uncertain nature of your job and industry (financial sector), it is best you prepare for the worst. Have you ever wondered what if both of you got retrenched at the same time? Your $790k pa pay will be meaningless as it will gone in an instant. Worse still, your investment properties can crash by more than 50% due to the oversupply.

So, you should save more and deleverage and sell one of your investment properties. You should also consider selling your flat and downgrade to a 3 room flat. You should also sell your car and take public transport. Better be safe than sorry.

Not in financial sector. I'm in FMCG and my wife's in HR. Actually already doing what you proposed. I have 3 invt properties, have already sold one given the CM. Left with 2 which I'm comfortable with.

Even if both of us were retrenched, we anticipate that we can live off savings and pay the mortgages for another 7-10 years so unless we are extremely unlucky it shouldn't be an issue.

Downgrading to a 3 room flat is definitely an option but given my family size, prefer to stay put in my current flat. Already using public transport on weekdays, car is red-plated and used for ferrying kids on weekends.

Better be safe than sorry...

Originally Posted by Unregistered

39 & 38, $790k pa combined. Stays in a $800k hdb 5-rm, paid up. Driving a 6-yr old Jap car paid up. 2 invt properties worth $3m, equity around $650k.

Cash, CPF combined, $2.5m. Total net worth, ard $4.8m.

No specific retirement plan cos still young, just focusing on saving aggressively.

Savings around $28k/mthly

My wife and I save around 20k/month, not as much as you, but still in a bit of a quandary as to where to put the accumulated cash. Are your savings mostly in cash at the moment? Any potential investments you are looking at in the near term?

Should not have to worry so much. With this level of savings you have many options simply because you can afford to take on more risks. If you are risk averse, you can do like we did. As we are not as young anymore, we channelled our savings into 3 main investment instruments:

1. We bought an investment property for slightly over $1m and rented it out for rental income of $45k pa

2. We bought $1m worth of blue chip stocks and reits giving us around $48k of dividend returns

3. As emergency funds, we also hold $1m in Endowment, simple premium insurance, and in CPF giving us $36k pa

I can understand how you feel. Initially when our savings started growing over $300k pa, we were also wondering what to do.

Originally Posted by Unregistered

My wife and I save around 20k/month, not as much as you, but still in a bit of a quandary as to where to put the accumulated cash. Are your savings mostly in cash at the moment? Any potential investments you are looking at in the near term?

Compared to the many rich forumers here, my income is very humbling. I'm a small time businessman, 49, earning an average of $70k per year. My wife, 44, earns $100k per year working in the corporate sector. We bought our first property, a 5 room HDB flat, in 1992. We then sold the flat for a profit and bought a condo in 2005 for $500k. Now our condo is worth $1m, and we have fully paid it up. Our condo is our best investment ever.

We hope to retire by 60. By then, we aim to sell our condo and buy a HDB studio unit which only costs $100k. We will have about $1m in cash which can give us a passive income of $48k pa ($4,000 per month) in dividends (or more). This will be enough as by then our kids would have moved out. When we reach 65, we will get the CPF Life money of about $2,400 per month. In total we will get $6,400 per month. If our two kids give us $1,000 per month (in total from both of them), we will have $7,400 per month. We will save whatever amount we can so that we can go for holidays.

Notice that the high earners are relatively young as well. With many earning so much and young, it can only lead to one thing -- increasing inflation in the future.

With savings of $20k to 28K pm (= $240k to $335K pa) what is a $1m condo? They can easily buy one every 3 years with full payment! It is no wonder, the CM and TDSR are still in place.

And cars? They can practically buy a new conti car every year if they want to.

And we are just talking about high earners in Singapore. They are many up and coming millionaires from China, Indon, and countries looking for places to park their money.

Originally Posted by Unregistered

Compared to the many rich forumers here, my income is very humbling. I'm a small time businessman, 49, earning an average of $70k per year. My wife, 44, earns $100k per year working in the corporate sector. We bought our first property, a 5 room HDB flat, in 1992. We then sold the flat for a profit and bought a condo in 2005 for $500k. Now our condo is worth $1m, and we have fully paid it up. Our condo is our best investment ever.

We hope to retire by 60. By then, we aim to sell our condo and buy a HDB studio unit which only costs $100k. We will have about $1m in cash which can give us a passive income of $48k pa ($4,000 per month) in dividends (or more). This will be enough as by then our kids would have moved out. When we reach 65, we will get the CPF Life money of about $2,400 per month. In total we will get $6,400 per month. If our two kids give us $1,000 per month (in total from both of them), we will have $7,400 per month. We will save whatever amount we can so that we can go for holidays.

Originally Posted by Unregistered

Should not have to worry so much. With this level of savings you have many options simply because you can afford to take on more risks. If you are risk averse, you can do like we did. As we are not as young anymore, we channelled our savings into 3 main investment instruments:

1. We bought an investment property for slightly over $1m and rented it out for rental income of $45k pa

2. We bought $1m worth of blue chip stocks and reits giving us around $48k of dividend returns

3. As emergency funds, we also hold $1m in Endowment, simple premium insurance, and in CPF giving us $36k pa

I can understand how you feel. Initially when our savings started growing over $300k pa, we were also wondering what to do.

Thanks a lot for sharing! Fits our investment philosophy very well, as we are quite risk averse.