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How much are you earning per annum?

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  #7381 (permalink)  
Old 25-04-2015, 06:05 PM
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Why do you need to have a passive income of $300k pa before you retire? If you just want a middle class retirement lifestyle, $150k pa is actually a lot for a retired couple. All your major liabilities such as mortgage and car loans would have been paid. So, you just need to spend only for the two of you and they main expenses are food, utilities, car, condo fees, and holidays. Perhaps you can list down the items you will be spending on here for us to help you evaluate whether you are spending too much on certain items. Bear in mind, once you retire, you no longer need to pay personal income taxes (which can be a lot).


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Good for you. I think there is a point of diminishing returns once you crossed about $6m - $8m net worth. I mean you could and probably had acquired most of the things you want in life. Earning and adding more money to your net worth would not give you the same quantum in terms of satisfaction and achievement.

With $6m - $8m networth, and if well invested, you could easily achieve $300k pa or more in passive income. Thus working is optional, and you choose to work only because you feel working completes you.

I am very far from reaching that stage, and not yet able to appreciate what's it like to be able to say "I will retire". Our passive income of $150k pa just about cover our annual expense. To double it to $300k pa is like having to slog another lifetime.

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  #7382 (permalink)  
Old 25-04-2015, 06:09 PM
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Me & wife mid 40s.
household income $30k pm
But long hours, frequent travel, high stress, no life
sian
That's a miserable life. No money in the world can buy happiness. You should quit and get a lower paying job but which gives you more free time to relax.

Are you staying in a landed or condo? How much is your total net worth?

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  #7383 (permalink)  
Old 25-04-2015, 08:33 PM
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The topic of retirement is widely discussed as most people want to retire when they reach a certain age as they will be tired of working after a long number of years. The time to start planning for retirement is when you get your first pay cheque and not when you are at 50. If you plan well, you can actually retire by 65.

The first thing to decide is your retirement lifestyle. Once you determine your retirement lifestyle, you then estimate how much you need to sustain your retirement lifestyle. The best step is to work on a passive income which will finance your retirement lifestyle. So, if you need $50k pa of passive income, then you must have $1m invested in an investment which gives you 5% dividend income. You can invest in blue chips which gives you 5% dividend yield. This will ensure that you have regular income for the rest of your life.

The CPF Life scheme is also a good option and if you choose the enhanced option, you get $1750 pm or $21k pa. So a retired couple would get $42k pa. So, if they have a $1m investment giving $50k pa, their total passive income will be $92k pa. If your children give you $1k pm ($500 each from 2 children) or $12k pa. Then the total income is $104k pa.

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  #7384 (permalink)  
Old 26-04-2015, 07:39 AM
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Originally Posted by Unregistered View Post
That's a miserable life. No money in the world can buy happiness. You should quit and get a lower paying job but which gives you more free time to relax.

Are you staying in a landed or condo? How much is your total net worth?
Yes, one of us is contemplating as we have too little time for our children, but it's just difficult to give up that $30k monthly pay cheque.

we are staying in a paid up condo in the heartland- worth maybe $1.3m. Have some other stocks invested, insurances etc. but i figure out probably net worth including stay in property is maybe $2m at middle 40s. Think have to hang on for another 10 years.
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  #7385 (permalink)  
Old 26-04-2015, 07:52 AM
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The key to retirement is financial independence. As long as your expenses are covered by your savings or your passive income, then you are financially independent and hence able to retire. Some people who are not investment savvy just save as much as they can and when it reaches a certain amount, they will retire. The more savvy people will invest to generate regular dividends as passive income.

Ever wondered how old men and women sitting under your HDB blocks can retire? Most of them would have sufficient savings in addition to income from their children. Most important, they keep their expenses low. Many spend less than $500 pm per person or $1000 pm as a couple. Their HDB mortgage is paid and they are debt free. The ones that usually have problems financially are those who gamble, smoke and drink. These are sins which puts oneself on the path of financial and health destruction.

Keeping expenses low is important. Even if your income is $10k pm, if you spend $20k pm, you will not have enough to last a long retirement. You can retire long if your income is $3k pm but your expenses is $2k pm. In fact you will save $1k pm. How do you keep expenses low during retirement? You have to cut certain items which are considered as wasteful and unnecessary. These are some items:

1. Car. Cars are expensive to own and maintain. If you are retired, you don't really need a car as you no longer need to rush to work in the morning. You can save $2k pm by not owning a car.

2. Maid. Employing a maid is not cheap. When you are retired, you have a lot of free time. You can cook your own meals, do your own laundry and wash your own toilet. Don't be lazy. You will save $1k pm by not employing a maid.

3. Eat at hawker centers instead of restaurants. Or cook your own meals. These are cheaper options.

4. Plan your holidays. Go during non peak seasons as costs are much lower.

If you plan well, you can cut down as much as $4k or more per month from your current expenses. Currently, a retired couple can live comfortably with $3k pm provided they have no debt and lead a healthy life without smoking, drinking or gambling. If you are retiring in 10 years time, taking into account inflation, $4k pm would be ok for a retired couple.

Some sources of retirement income:

1. CPF Life. Gives you $3500 pm as a retired couple.
2. Lease buy back of your HDB flat.
3. Dividends from blue chips.
4. Room rental off your HDB flat rooms. $800 per room.
5. Cash savings.
6. Allowance from children. $500 from each child.

Just by CPF Life and renting out two rooms, you can get $5100 pm. This is more than enough for a retired couple today who live a modest life.
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  #7386 (permalink)  
Old 26-04-2015, 09:25 AM
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Quote:
Originally Posted by Unregistered View Post
Yes, one of us is contemplating as we have too little time for our children, but it's just difficult to give up that $30k monthly pay cheque.

we are staying in a paid up condo in the heartland- worth maybe $1.3m. Have some other stocks invested, insurances etc. but i figure out probably net worth including stay in property is maybe $2m at middle 40s. Think have to hang on for another 10 years.
You are rich since your condo is paid up and your net worth is $2m. Yes it is not easy to give up big, fat pay cheques but it all depends on what you value more in life. What is the point of earning millions but your children are neglected and become wayward. You have seen many cases of youth who are uncontrollable and they not only come from low income but also middle and high income families. These children lack parental love, care and attention because of their parents' grreed in making money. They think by having lots of money will make their children happy but they were wrong. Very wrong.
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  #7387 (permalink)  
Old 26-04-2015, 09:46 AM
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It is sad that at this day and age, people are still looking to spend their retirement sitting at HDB void decks whiling away their time, staring blankly and waiting for their numbers to be called. I can't believe people nowadays still accept this.

We are better educated, healthier and have longer lifespan (because of better nutrition, healthcare and technology in general) and earning more than our parents' generation. Why constrain / limit yourself to such a pointless existence just because you are retired from your job, especially when there are so much to do, learn and enjoy. More so when we are no longer tied down by work when retired!

This is what it is all about for me when I retire:

1. Go travelling, and this time, stay longer at places to really appreciate the different cultures, architecture, scenery and the people. My current holidays are rush-rush affairs and only to touristy spots. I mean what can you really do and see in 10 - 14 days of holidays if you are touring Europe or US?

2. Continue with my hobby of golf and tennis with my current group of kakis. This is how friendship and fellowship are forged and stay strong throughout. I would definitely want and need a car to lug my golf clubs especially to Johor. A car also allows my family to be closer as we travel together for meals, shows and other events. For retirees, a car is even more precious, as you would want to move around in comfort, and not have to jostle with the crowd on public transportation.

3. Attend live concerts. This is one of my favorite past times. Catching a musical passing through Singapore is what I am always on the lookout for. I have a few M'sian friends who would travel down here just to catch certain performances.

4. Have lunches/dinners with my kakis. This would become more regular as we retire. To catch up, and discuss investment stuff.

5. Continue with a maid to help out in daily household chores and cooking, freeing up time for both my wife and i to learn new things and be more involved in charitable activities.

6. Age in place. I would want to continue staying in my current condo. I am enjoying my stay here and don't want to go through the hassle of moving.

7. Looking after my investments. With my current portfolio (around $3.5m of investment), sometimes I feel that I am not giving it sufficient attention because of my work.

I also enjoy working and hope to build up my net worth more. Whether we are retired or still working, Life is to be lived! Don't sell yourself short by aiming for a lower retirement saving. There is much to learn, do and enjoy! Don't waste it sitting and staring blankly into space in the void decks.


Quote:
Originally Posted by Unregistered View Post
The key to retirement is financial independence. As long as your expenses are covered by your savings or your passive income, then you are financially independent and hence able to retire. Some people who are not investment savvy just save as much as they can and when it reaches a certain amount, they will retire. The more savvy people will invest to generate regular dividends as passive income.

Ever wondered how old men and women sitting under your HDB blocks can retire? Most of them would have sufficient savings in addition to income from their children. Most important, they keep their expenses low. Many spend less than $500 pm per person or $1000 pm as a couple. Their HDB mortgage is paid and they are debt free. The ones that usually have problems financially are those who gamble, smoke and drink. These are sins which puts oneself on the path of financial and health destruction.

Keeping expenses low is important. Even if your income is $10k pm, if you spend $20k pm, you will not have enough to last a long retirement. You can retire long if your income is $3k pm but your expenses is $2k pm. In fact you will save $1k pm. How do you keep expenses low during retirement? You have to cut certain items which are considered as wasteful and unnecessary. These are some items:

1. Car. Cars are expensive to own and maintain. If you are retired, you don't really need a car as you no longer need to rush to work in the morning. You can save $2k pm by not owning a car.

2. Maid. Employing a maid is not cheap. When you are retired, you have a lot of free time. You can cook your own meals, do your own laundry and wash your own toilet. Don't be lazy. You will save $1k pm by not employing a maid.

3. Eat at hawker centers instead of restaurants. Or cook your own meals. These are cheaper options.

4. Plan your holidays. Go during non peak seasons as costs are much lower.

If you plan well, you can cut down as much as $4k or more per month from your current expenses. Currently, a retired couple can live comfortably with $3k pm provided they have no debt and lead a healthy life without smoking, drinking or gambling. If you are retiring in 10 years time, taking into account inflation, $4k pm would be ok for a retired couple.

Some sources of retirement income:

1. CPF Life. Gives you $3500 pm as a retired couple.
2. Lease buy back of your HDB flat.
3. Dividends from blue chips.
4. Room rental off your HDB flat rooms. $800 per room.
5. Cash savings.
6. Allowance from children. $500 from each child.

Just by CPF Life and renting out two rooms, you can get $5100 pm. This is more than enough for a retired couple today who live a modest life.
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  #7388 (permalink)  
Old 26-04-2015, 10:56 AM
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Given your desired retirement lifestyle, you would need $250k pa hence you will need to work until you are 75 years old and then retire. Hope you won't die or become permanently immobile or suffer from dementia before that. Best of luck.


Quote:
Originally Posted by Unregistered View Post
It is sad that at this day and age, people are still looking to spend their retirement sitting at HDB void decks whiling away their time, staring blankly and waiting for their numbers to be called. I can't believe people nowadays still accept this.

We are better educated, healthier and have longer lifespan (because of better nutrition, healthcare and technology in general) and earning more than our parents' generation. Why constrain / limit yourself to such a pointless existence just because you are retired from your job, especially when there are so much to do, learn and enjoy. More so when we are no longer tied down by work when retired!

This is what it is all about for me when I retire:

1. Go travelling, and this time, stay longer at places to really appreciate the different cultures, architecture, scenery and the people. My current holidays are rush-rush affairs and only to touristy spots. I mean what can you really do and see in 10 - 14 days of holidays if you are touring Europe or US?

2. Continue with my hobby of golf and tennis with my current group of kakis. This is how friendship and fellowship are forged and stay strong throughout. I would definitely want and need a car to lug my golf clubs especially to Johor. A car also allows my family to be closer as we travel together for meals, shows and other events. For retirees, a car is even more precious, as you would want to move around in comfort, and not have to jostle with the crowd on public transportation.

3. Attend live concerts. This is one of my favorite past times. Catching a musical passing through Singapore is what I am always on the lookout for. I have a few M'sian friends who would travel down here just to catch certain performances.

4. Have lunches/dinners with my kakis. This would become more regular as we retire. To catch up, and discuss investment stuff.

5. Continue with a maid to help out in daily household chores and cooking, freeing up time for both my wife and i to learn new things and be more involved in charitable activities.

6. Age in place. I would want to continue staying in my current condo. I am enjoying my stay here and don't want to go through the hassle of moving.

7. Looking after my investments. With my current portfolio (around $3.5m of investment), sometimes I feel that I am not giving it sufficient attention because of my work.

I also enjoy working and hope to build up my net worth more. Whether we are retired or still working, Life is to be lived! Don't sell yourself short by aiming for a lower retirement saving. There is much to learn, do and enjoy! Don't waste it sitting and staring blankly into space in the void decks.
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  #7389 (permalink)  
Old 26-04-2015, 11:50 AM
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You are rich since your condo is paid up and your net worth is $2m. Yes it is not easy to give up big, fat pay cheques but it all depends on what you value more in life. What is the point of earning millions but your children are neglected and become wayward. You have seen many cases of youth who are uncontrollable and they not only come from low income but also middle and high income families. These children lack parental love, care and attention because of their parents' grreed in making money. They think by having lots of money will make their children happy but they were wrong. Very wrong.
we will try to hang on for another 5 years. hopefully can make enough for another property which we could buy for rental income.... but in the meantime, have to endure with the stressful life... that's Stinkapore.
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  #7390 (permalink)  
Old 26-04-2015, 12:13 PM
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Thanks for the many posts of income and financial planning.

Pls continue to share and drown out the car dealers. If we want to spend our time in a place, we have to help clear up the rubbish that strays in our purpose
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