How much are you earning per annum?

Thanks for your concern. We are not worried of our retirement when we reach 65. When we retire, we will sell our condo and buy a small studio condo. After selling our big condo and buying a studio condo and plus our savings by then, we should have $1.2m which we will invest to get $60k in dividends per annum. We will also get our CPF life of $3000 pm or $36k pa. So our total passive income will be $96k pa. Our kids should give us $2k pm or $24k pa. So in total $120k pa.

Originally Posted by Unregistered

Assuming your stocks give you 5% returns, that would be $3.5k pa.
Your cash (assuming in FD) and your CPF averaged 2.8% returns, that would give you around $10k from $360k.

So your income would be $180k - $3.5k - $10k = $166k pa.

I supposed that's combined salary for you and wife, then divide by 2, each of you will be earning $83k pa. Assuming 3 months bonus (including the 13th month), it means a monthly wage of just $5,533.

I would suggest that you consider cutting back on some of your expenses, especially since you are both 48 yrs old already. You don't have much time to build up your retirement fund. Some more, with your kids still schooling. It will be worse when they start Uni studies.

Some of my colleagues (all earning more than you, >$10k pm) are already struggling to fund their children's unviersity education, one after another and at the same time trying to build up their retirement savings.

Retiring is easy as long as you:

1. Own a paid up 4 room HDB flat.
2. You and wife meet the CPF min sum.
3. Have at least 2 kids whom will give you monthly allowance.

If you want to retire in Singapore this is what you need to do.

1. Rent out two of your empty rooms to FTs to earn $1400 pm ($700 for each room).
2. You will get $2400 pm from CPF Life (you and wife will each get $1200 pm).
3. Your two kids each give you and wife $1000 pm in total ($500 from each kid).

So your total passive income is $4800 pm. This is enough provided you do not have a maid, do not have a car, do not gamble, do not drink, do not smoke and do not womanize.

If you want to retire overseas in luxury:

1. Rent out your whole flat to FTs for $2500 pm.
2. You get $2400 pm from CPF Life.
3. Allowance from children $1000 pm.

So your passive income is $5900 pm. If you retire in Malaysia and convert your passive income to RM, you get RM15,930 pm.

Here are your monthly expenses in KL:

1. Rent a penthouse in KL RM5,000 pm
2. Food (restaurants) and utilities in KL RM3,000 pm
3. Rent a car plus petrol RM1,500 pm
4. Misc (including medical) $1,500 pm
5. Total RM11,000 pm
6. Savings RM4,930 pm

In summary, you can retire in Singapore comfortably and live simply.

Or you can retire like a rich man in KL.

If you want to retire like a big tycoon, living in a big mansion, employ two maids, a garderner and a driver, you can retire in Thailand, Vietnam or Cambodia.

The CHOICE is YOURS.

DON'T WORRY. BE HAPPY.

Thanks for sharing your brilliant ideas. You are doing a great service by sharing your thoughts. This proves our system of home ownership, asset enhancement, the CPF system and even promoting the family unit is all working well.

But we have to take note that we need to be open to FTs as they are the ones who will be our tenants when we retire. In retirement, we will be landlords.

We also need to maintain our CPF system, the CPF min sum, to ensure that we have money when we retire. We cannot allow people to take their CPF and spend as they wish as they will suqander their CPF and will be penniless in their old age. Without the CPF, we will not save as it is human nature to spend and spend without saving much. With the CPF system, we can own our HDB flat and retire with our CPF Life. We have a great system indeed, the best in the world.

As you have shown, our retirement formula is = HDB flat + CPF Life + children allowance

Originally Posted by Unregistered

Retiring is easy as long as you:

1. Own a paid up 4 room HDB flat.
2. You and wife meet the CPF min sum.
3. Have at least 2 kids whom will give you monthly allowance.

If you want to retire in Singapore this is what you need to do.

1. Rent out two of your empty rooms to FTs to earn $1400 pm ($700 for each room).
2. You will get $2400 pm from CPF Life (you and wife will each get $1200 pm).
3. Your two kids each give you and wife $1000 pm in total ($500 from each kid).

So your total passive income is $4800 pm. This is enough provided you do not have a maid, do not have a car, do not gamble, do not drink, do not smoke and do not womanize.

If you want to retire overseas in luxury:

1. Rent out your whole flat to FTs for $2500 pm.
2. You get $2400 pm from CPF Life.
3. Allowance from children $1000 pm.

So your passive income is $5900 pm. If you retire in Malaysia and convert your passive income to RM, you get RM15,930 pm.

Here are your monthly expenses in KL:

1. Rent a penthouse in KL RM5,000 pm
2. Food (restaurants) and utilities in KL RM3,000 pm
3. Rent a car plus petrol RM1,500 pm
4. Misc (including medical) $1,500 pm
5. Total RM11,000 pm
6. Savings RM4,930 pm

In summary, you can retire in Singapore comfortably and live simply.

Or you can retire like a rich man in KL.

If you want to retire like a big tycoon, living in a big mansion, employ two maids, a garderner and a driver, you can retire in Thailand, Vietnam or Cambodia.

The CHOICE is YOURS.

DON'T WORRY. BE HAPPY.

Originally Posted by Unregistered

Thanks for sharing your brilliant ideas. You are doing a great service by sharing your thoughts. This proves our system of home ownership, asset enhancement, the CPF system and even promoting the family unit is all working well.

But we have to take note that we need to be open to FTs as they are the ones who will be our tenants when we retire. In retirement, we will be landlords.

We also need to maintain our CPF system, the CPF min sum, to ensure that we have money when we retire. We cannot allow people to take their CPF and spend as they wish as they will suqander their CPF and will be penniless in their old age. Without the CPF, we will not save as it is human nature to spend and spend without saving much. With the CPF system, we can own our HDB flat and retire with our CPF Life. We have a great system indeed, the best in the world.

As you have shown, our retirement formula is = HDB flat + CPF Life + children allowance

Exactly... and all these young kids are so anti CPF and the government policies about FT influx and HDB prices...

I worry for the next election. I hope these young people wake up their idea and vote for the PAP.

Seeing that you guys staying in HDB flats are pro-government, then there is not much to worry about the outcome of the next general election. Those staying in condos and who are earning big bucks definitely see it in their interest to want the current government to stay in power so that they can continue to enjoy the good life.

Originally Posted by Unregistered

Exactly... and all these young kids are so anti CPF and the government policies about FT influx and HDB prices...

I worry for the next election. I hope these young people wake up their idea and vote for the PAP.

Originally Posted by Unregistered

Seeing that you guys staying in HDB flats are pro-government, then there is not much to worry about the outcome of the next general election. Those staying in condos and who are earning big bucks definitely see it in their interest to want the current government to stay in power so that they can continue to enjoy the good life.

Indeed. My wife and I used to live in low income households, sharing a small flat with many people. We studied and worked hard and today we live in a 3 bedroom condominium unit and owns a car. Both our condo and car are paid up. From a nobody, I am now a millionaire. Our system works very well. Our lives have improved by leaps and bounds over the years.

In your 20’s

In your 20’s, you are most probably new in the workforce, trying to work your way up. Unfortunately this also translates to a low income but being young, socialising usually takes priority causing you to overspend and under-save.

Overestimating purchasing ability

You could be wanting to travel the world or buy a luxury car, but you do not earn enough to afford these things. If you cannot pay for these wants from your own pocket, you may end up incurring huge debts that hold you back for years. Get used to saving for the things you want instead of solely depending on credit.

Delaying retirement savings

When you are in your 20′s, retirement can seem far away. The earlier you start stashing away savings for this purpose, the more you will earn with compounding interest and the more comfortable your retirement will be. The money you save in your 20′s is potentially worth way more than anything you will set aside in your 40′s.

Abusing credit cards

While credit cards serve a valuable service by providing convenience, they can also tempt you into living beyond your means. At this stage, your credit card bills can seem burdensome if you are not careful. Failing to settle the full amount, you may resort to paying the minimum balance only, incurring a big sack of accumulated interest (Find out how you can pay-off your debts). Create a spending plan based on your income and stick to it. Use credit cards only if you can pay the balance off in full at the end of the month.

In your 30’s

In your 30’s, you are most probably married, and started to plan for your family which may involve having kids. More and more financial responsibilities are pouring in, and it will take some finesse and strategy to balance your finances and provide the best for your family.

Not planning for your children’s future education needs

Holding your bundle of joy in your arms, the thought of him or her going to the university may seem light years away. But, time flies faster than you could ever imagine. As the cost of a university education is set to rise as years roll by, you should start planning for your child’s university fund right from the birth of your child. If you have more than one child to fund through university, these figures can rack up quite high (Find out how you can save for your children’s future education needs). By procrastinating or not having an education fund at all, you may be forced to dip into your retirement fund before your golden years.

Taking insurance lightly

Individuals in their 30′s often neglect to protect themselves with adequate insurance. They often lose out on the chance to buy life insurance at a lower premium and delay the purchase of disability, personal accident or health insurance. Going without sufficient coverage is financially risky. With having dependents such as spouse, children and aging parents, it guarantees a financial safety net for your entire family if something were to happen to you.

In your 40’s

In the 40’s, one would most probably have reached the peak of their career and be earning substantially more than you were in your 20′s (or even your 30′s). However, many are still busy spending money on the things they want right now, such as vacations, bigger cars, or new houses, and delaying their retirement savings.

Not reviewing your investment portfolio

Yes, it is a good thing that you have an active investment portfolio, but as you go through different stages in life, your risk tolerance changes. You may have been willing to take more risks when you were in your 30′s as you still had the ability and time to earn an income. However, as you are nearing retirement, you may want to review your portfolio to allocate more of your assets in more conservative investments. However, moving your investments to a safer avenue too early could also cause you to run short on your nest egg. You need to ensure that your savings can support you well through retirement. Balance is the key!

Ignoring will

Obviously it is hard to imagine being in your death bed when you are still young and active. However, writing a will should be on your must-do list when you are in your 40′s, if not earlier. A will protects your family and your assets if something happens to you. It also ensures that you have an attorney that will make financial and legal decisions on your behalf if you become incapacitated.

In the 50’s, your children are in university and only a decade more to go before retirement.

Using retirement savings to pay for child’s education

If you have children, it is not wrong to help pay for their tertiary education related expenses, but not at the expense of your retirement savings. Too many parents sacrifice their retirement savings and withdraw from their EPF in favour of their children’s education. Put your retirement needs first and do what you can to save for both, which is why its important to start planning for both as early as possible.

Investing like you are in your 30′s

As you are nearing your retirement you become even more protective of your savings in your 50′s. Considering the fact that you could be living well into your 80′s or 90′s, you require a substantial amount in retirement. Simply preserving capital is not a sustainable financial strategy, the money must be put to work. While investing money in an investment is risky, it is equally risky for if the money is kept under the mattress. So make sure you keep growing your nest egg well into your 50′s and beyond, to combat against inflation and support you financially.