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How much are you earning per annum?

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  #6281 (permalink)  
Old 26-12-2014, 07:28 AM
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There are a range of earners in this forum. The high income people earn as much as $800k pa while the low income people earn only $30k pa. Despite the differences in their earnings, their goal is the same, which is to prepare for retirement.

What is important is to know where you are today and what you are expected to have when you reach retirement age at 65. Based on what you are expected to have then you envisage your retirement lifestyle. What you are expected to spend during retirement will be much lesser compared to now in most cases as your retirement income is likely to be a lot lesser than what you are earning now.

For those who have a lot of assets by the time they retire can enjoy a luxurious retirement. For instance if you have $4m in investments giving you 5% dividend yield, then you get $200k pa of income which allows you to retire in comfort. You can still own a car, employ a maid, go holidays many times a year, eat at high class restaurants often, etc.

However, for those with lesser means and earn a passive income of $36k pa, then you can only retire simply. You can only eat at hawker centers most of the time, no car, no maid, short holidays once a year in cheap locations, etc.

While both have different retirement lifestyles, both can be happy because happiness is not about you have but about how contented you are in your heart. So, while you work hard now to provide for a comfortable retirement, don't work too hard until you neglect your health and family. There needs to be a balance in your life. Life is a journey.

For me, I plan to have a moderately comfortable retirement lifestyle. I envisage that I will be getting about $6k pm or $72k pa of passive income when I retire and this includes my CPF Life payout but excluding allowance from our children (it will be a bonus if they do give). I will likely be moving to a studio condo located next to an MRT station and near to amenities such as wet market, malls, hawker centers, etc. I will hence not own a car and not employ a maid. We will eat at hawker centers or cook our own meals.

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  #6282 (permalink)  
Old 26-12-2014, 10:03 AM
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Quote:
Originally Posted by Unregistered View Post
There are a range of earners in this forum. The high income people earn as much as $800k pa while the low income people earn only $30k pa. Despite the differences in their earnings, their goal is the same, which is to prepare for retirement.

What is important is to know where you are today and what you are expected to have when you reach retirement age at 65. Based on what you are expected to have then you envisage your retirement lifestyle. What you are expected to spend during retirement will be much lesser compared to now in most cases as your retirement income is likely to be a lot lesser than what you are earning now.

For those who have a lot of assets by the time they retire can enjoy a luxurious retirement. For instance if you have $4m in investments giving you 5% dividend yield, then you get $200k pa of income which allows you to retire in comfort. You can still own a car, employ a maid, go holidays many times a year, eat at high class restaurants often, etc.

However, for those with lesser means and earn a passive income of $36k pa, then you can only retire simply. You can only eat at hawker centers most of the time, no car, no maid, short holidays once a year in cheap locations, etc.

While both have different retirement lifestyles, both can be happy because happiness is not about you have but about how contented you are in your heart. So, while you work hard now to provide for a comfortable retirement, don't work too hard until you neglect your health and family. There needs to be a balance in your life. Life is a journey.

For me, I plan to have a moderately comfortable retirement lifestyle. I envisage that I will be getting about $6k pm or $72k pa of passive income when I retire and this includes my CPF Life payout but excluding allowance from our children (it will be a bonus if they do give). I will likely be moving to a studio condo located next to an MRT station and near to amenities such as wet market, malls, hawker centers, etc. I will hence not own a car and not employ a maid. We will eat at hawker centers or cook our own meals.
Nice post.

Certainly better than the car salesperson post about using "profit" from "flipping" BTO to buy a car!!

If you make $800k pa, cars are passť. If you make 30k pa and you make a "profit" by selling your BTO, don't you think you would rather save the "profit" up??

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  #6283 (permalink)  
Old 26-12-2014, 11:10 AM
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No matter how you plan for retirement, the only realistic way to have a good,safe and stable passive income when you retire is to build up a massive portfolio by the time by that time.

To do so there are only a few ways:

1) Inherit - Out of your control
2) Strike lottery - Out of your control
3) Live very modestly and scrimp and save whatever you can
4) Have a high flying career and whack as much of employment income as you can and save a portion of it
5) Make it big in business - High risk of losing everything and restart from zero in your late 30s early 40s

At the end of the day #1 & #2 only <1% can do, most of us either got to scrimp & save like mad towards retirement or cheong career or business and hopefully some big money will come about.

For me I have no interest of following some typical PMET career route like a typical SG and save high proportion and lower lifestyle for decades just to meet retirement target. That's like not living up to your dreams from age 24 to 67 in order to save up to retirment of your dreams from 67 to 82.

Thanks but no thanks for me.

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  #6284 (permalink)  
Old 26-12-2014, 12:00 PM
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Life is not like what you painted it out to be, for most people. It is not about the extremes, but mostly in-betweens. It is not about blindly scrimping and saving every cent you can or living extravagantly like there is no tomorrow.

Many people are able to save decently and still enjoying their life, if I may add, thoroughly.

They are not super high income earners, but ordinary folks. Looking at the household income statistics, any households in the top 30% should be living a comfortable lifestyle and still have a decent level of savings for their retirement.

The key to having enough savings for retirement lies in the "golden" period of between 50 to 60/65 years of age when they are still working. This is the period where for most typical households, their loan commitment, children's educational needs are tapering off, and early investments are paying dividends. This period is crucial to accumulate the bulk of their retirement fund.

For us, we saw our savings rate reach $300k for the first time when we hit 50, and it has steadily crept up to $350k last year (at 55). A combination of higher income, major loans paid off, and higher passive income. One child also graduated and started working. So looking forward, from 55 to 62/65, we are expecting to maintain the savings rate or increase it.

We have not had to live an austere lifestyle all this while, but neither did we live extravagantly. Basically we live the typical family lifestyle enjoying simple pleasures with an overseas holiday each year. And yes, we have a family car (Jap car) all the while.

Another thing people need to note is that the early one retires, the more savings is needed, but because you retire earlier, you tend to save less. On the other hand, the later you retire, the less fund you will need, but because you work longer, the more savings you are likely to accumulate. That is the reality and irony.

Quote:
Originally Posted by Unregistered View Post
No matter how you plan for retirement, the only realistic way to have a good,safe and stable passive income when you retire is to build up a massive portfolio by the time by that time.

To do so there are only a few ways:

1) Inherit - Out of your control
2) Strike lottery - Out of your control
3) Live very modestly and scrimp and save whatever you can
4) Have a high flying career and whack as much of employment income as you can and save a portion of it
5) Make it big in business - High risk of losing everything and restart from zero in your late 30s early 40s

At the end of the day #1 & #2 only <1% can do, most of us either got to scrimp & save like mad towards retirement or cheong career or business and hopefully some big money will come about.

For me I have no interest of following some typical PMET career route like a typical SG and save high proportion and lower lifestyle for decades just to meet retirement target. That's like not living up to your dreams from age 24 to 67 in order to save up to retirment of your dreams from 67 to 82.

Thanks but no thanks for me.
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  #6285 (permalink)  
Old 26-12-2014, 04:33 PM
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50/52, $145k pa.
4 room condo, $1.6m. Paid up.
Jap car, 2 yr old, paid up.
Kids in JCs.
Saves $40k pa.

Retirement plan:
1. CPF Life $1200 x 2 = $2400 pm or $28.8k pa.
2. Sell 4 room condo and buy one bedroom condo.
3. Invest cash (cash savings plus cash balance from condo downgrade) $1.5m to get 5% dividend yield or $75k pa.
4. Children's allowance $1000 x 2 = $2000 pm or $24k pa.
5. Total passive income $128k pa
6. Expected expenses $60k pa
7. Savings for reinvesment $68k pa


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  #6286 (permalink)  
Old 26-12-2014, 07:14 PM
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Yours is one many posts that said they would invest such and such amount of money in stocks? to earn 5% return when they retire. For your case the amount is $1.5m.

To know whether this plan will pan out, ask yourself these few questions:

1. Do you currently have any investment in shares?
2. Are you able to stomach the volatility in the share prices? For some shares (including blue chips) their value can plunge easily tens of percent overnight. Imagine this happening when you are 65, retired with no more salary.
3. Are you willing / do you dare to put all the $1.5m in one segment of the market? Most likely not, then you will most likely achieved a lower return than 5%.

My point is - do not blindly echo other posters who shared their passive income returns. Some of these posters have steadily invested over many years (20 - 30 years?). Many of them have snared "multi baggers" ie shares that have grown multifold in values over the years.

My total stock holding now is worth slightly above $1m, but my outlay was about $770k and the build up was over many years. I pared my risk through spreading over many different kinds of stocks (about 35counters) from reits to blue chips. As a result, my dividend income averaged 5% or about $50k pa give and take a few $k each year.

If you asked me now, if I were a retiree with $1.5m to invest, I would not plonk down the $1.5m in a short time. I will probably take my time to study and pick the stocks. Meaning I will not be able to generate the income necessary to sustain my retirement. Thus I will end up using the $1.5m to feed myself in the meantime.

Quote:
Originally Posted by Unregistered View Post
50/52, $145k pa.
4 room condo, $1.6m. Paid up.
Jap car, 2 yr old, paid up.
Kids in JCs.
Saves $40k pa.

Retirement plan:
1. CPF Life $1200 x 2 = $2400 pm or $28.8k pa.
2. Sell 4 room condo and buy one bedroom condo.
3. Invest cash (cash savings plus cash balance from condo downgrade) $1.5m to get 5% dividend yield or $75k pa.
4. Children's allowance $1000 x 2 = $2000 pm or $24k pa.
5. Total passive income $128k pa
6. Expected expenses $60k pa
7. Savings for reinvesment $68k pa
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  #6287 (permalink)  
Old 26-12-2014, 07:15 PM
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Either all the posts here are written by a few guys only (same old story with condo and car always fully paid up regardless when they are bought, 10 years ago, paid up, bought yesterday? also fully paid up).

Or this thread only can attract the fully paid up condo/car type of people....

*yawnz*
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  #6288 (permalink)  
Old 26-12-2014, 10:16 PM
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Quote:
Originally Posted by Unregistered View Post
For us, we saw our savings rate reach $300k for the first time when we hit 50, and it has steadily crept up to $350k last year (at 55). A combination of higher income, major loans paid off, and higher passive income. One child also graduated and started working. So looking forward, from 55 to 62/65, we are expecting to maintain the savings rate or increase it.
Both of you are in a bad shape to be having only $175k per person especially when you are already quite old at 55.

Really try to get your finances in shape before teaching others what to do. I'm not a big fan of insurance agents who exaggerate about needing multi millions of dollars to retire just to sell products, but common sense tells me $175k at 55 years old is not a good sign.

You only have 7 more years of employment income before retirement and at most 2-4 more years extra if your employers are kind enough to recontract you past 62. This is with a big assumption that you don't get bumped off halfway.

Don't kid yourself that with that level of savings you are going to retire at 62 while maintaining your upper middle class lifestyle of owning a Japanese car and going on overseas holidays.
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  #6289 (permalink)  
Old 26-12-2014, 10:32 PM
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Quote:
Originally Posted by Unregistered View Post
Both of you are in a bad shape to be having only $175k per person especially when you are already quite old at 55.

Really try to get your finances in shape before teaching others what to do. I'm not a big fan of insurance agents who exaggerate about needing multi millions of dollars to retire just to sell products, but common sense tells me $175k at 55 years old is not a good sign.

You only have 7 more years of employment income before retirement and at most 2-4 more years extra if your employers are kind enough to recontract you past 62. This is with a big assumption that you don't get bumped off halfway.

Don't kid yourself that with that level of savings you are going to retire at 62 while maintaining your upper middle class lifestyle of owning a Japanese car and going on overseas holidays.
You need to brush up on your English. There is a huge difference between a saving rate of $350k and having saved up $350k to date.
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  #6290 (permalink)  
Old 27-12-2014, 09:12 AM
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My wife and I retired last year at the peak of the property market. We sold our landed property at a top price. Since it was fully paid up many years ago, we got a lot of cash. We then bought a three bedroom 1300 sq ft luxury condo which we paid in cash. It was poshly renovated and just nice for for the two of us. Our daughter is working overseas.

With the excess cash from the transactions plus our own savings, with some professional help, we built a robust investment portfolio which gives us a passive dividend income of $150k pa. This is more than our expenses of $75k pa. Since we are debt free (our new car is also paid up), we don't need to spend much on loan repayment and most of our expenses goes into food and holidays.

We did not expect to retire so early (was projecting to retire at 65) but because of the sharp price rise in our landed property (overvalued in our opinion) we took the opportunity to monetize our gains. We are now very happy with our retirement lifestyle.
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