How much are you earning per annum?

Thanks for the effort in summarising. I have learnt a lot from the comments here.

Let me share with you our retirement plans. My wife and I will retire next year when we reach 60. Our kids are grown up and on their own with their young families. Our terrace house now feels too big for us, sometime it feels scary as there is no security. We used to live in a condo last time and we feel more secure in a condo.

We plan to sell our terrace (now worth $3mil, fully paid up) and move to a one bedroom newly TOP resort condo in Woodlands, costing only $600k. Our decision to move there is due to the big plans for the Woodlands Regional Centre. Also easy to maintain a small home.

We will invest $2m cash in blue chips that gives dividends of 4% pa or $80k pa. Our current spendings is $3k pm or $36k pa. Our kids now give us $1k each, so we get an additional income of $2k pm or $24k pa. So, our passive income will be $104k pa. We will then save $68k pa, which we will reinvest and gives us an additional income of $2.7k pa. This way, our passive income continue to grow until we die. Our kids will be very rich when we die.

Originally Posted by Unregistered

Reading through the valuable gems from this thread, here are the summary of some retirement strategies:

1. Top up CPF SA so that you can enjoy the 4% risk free return early. If you are in your early 30s and you already have reached the min sum of $155k today, by the time you are 55, your CPF SA account will be a lot. Then when you are 65, you can collect lots of money every month until you die.

2. Downgrade to a smaller, cheaper home when you retire. You can sell your bungalow and downgrade to a smallish 2,000 sq ft condo penthouse. You then invest the rest of your cash in blue chips to give you 5% dividend yield returns. If you invest a modest $5m cash, you will get $250k pa, which is enough for you and your wife to enjoy a decent middle class retirement lifestyle.

3. Rent out your rooms in your HDB flat. If you rent out your room for $1000 per room, you will get an extra $2000 per month of passive income.

4. You do a lease buyback of your 4 or 3 room flats. You get an extra $500 - $700 per month.

5. Retire overseas. If you can generate $3k per month from your assets, you can retire in style in Chiang Mai, Thailand or in Ipoh, Malaysia. You can rent out your Queenstown flat for $4000 per month and convert to RM to get RM10,000 every month. This is a lot since you can rent a condo in Ipoh for RM1,000 per month. A 2nd hand car costs only RM10,000. With $3k per month, you can retire like a tycoon in Thailand, you can employ two maids and a gardener.

6. You can rent out your flat and live with your kids. Tell them to take care of you and you will bequeath to them your flat. You can also take care of your grandkids and enjoy their company.

So, there are many ways to retire, you just need to open your minds and don't be those who can't even retire with millions in their banks.

There are many talk on retirement. Actually, how much do a retired couple today need? Here is a calculation.

Assumptions:

1. Retired couple (65 years olds) do not have dependants, no more older folks to take care and kids all grown up.
2. Children (e.g. 2) are working and giving allowance of $250 to each parent. So, each parent will get $500 pm. As a couple, they get $1000 pm.
3. They do not smoke, drink, gamble and the husband does not womanize nor sodomize. These sinful things will cost you thousands of wasted dollars if indulged in. You will also get lots of diseases (e.g. cancer, STDs, AIDs, liver failure, Hepatitis, etc) that will drain your savings.
4. The flat, e.g. a 4 room flat, is paid up. No more mortgage.
5. No maid.
6. No car. Take public transport.
7. Debt free.
8. Keep fit with exercise and eating healthy food.

Spendings:

1. Food and groceries - $600 pm
2. Utilities - water, electricity, gas - $200 pm
3. Transport - $50 pm
4. Short holidays (pro rated) - $100 pm
5. Other costs - $200 pm

Total - $1150

So, if you have cleared your mortgage and debt free and do not indulge in sins, your spendings as a retired couple is actually very little.

Today, if you are 55 and have reached the min sum of $155k in your CPF SA, you will get $1,200 pm at 65. So as a couple, you get $2,400 pm and plus your allowances from kids you get as a couple $3,400 pm. This is more than your spendings. If you want more money, you can rent out your room for $1000 pm for each room and hence get $2000 extra. You can also do the lease buyback and get maybe $700 pm extra.

So, in total, you can get = $2,400 + $1,000 + $2,000 + $700 = $6,100 pm.

With this kind of money, surely you can retire in peace. Just make sure you DO NOT PERFORM SINS like drinking, gambling, womanising or sodomising (you will get STDs and AIDS).

Originally Posted by Unregistered

Sorry, it should be $2.04m.

We will be a millionaire retired couple in 20 years time. So exciting.

dont be too complacent, S$2 mill you see now in the future could be worth only S$200K with the inflation and such..

Originally Posted by Unregistered

dont be too complacent, S$2 mill you see now in the future could be worth only S$200K with the inflation and such..

In that case our HDB flat which is worth $700k today will not be $900k in 20 years time but will be $2m instead. This is good news. Thanks for sharing. If what you said is true, then our net worth should be $4m in 20 years time and not $2.04m. That's wonderful.

[lazyplane]

It is almost impossible to agree that inflation can be so high as 11% per year that it erodes $2m to $200k in 20 years . If that can happen, it means you are assuming an end of world scenario.. but then it should not last 20 years.

I feel a marginal inflation rate of 3% is more possible and that can destroy the value of $2m to half its value of slightly above $1m in 20 years.

I also agree with the point below that it is true that if all your assets are in cash, you can get hit by such erosion. But if you hold assets,indirectly you are hedging against that inflation.

So balance such excess cash with equities, assets and you should be ok.

Originally Posted by Unregistered

In that case our HDB flat which is worth $700k today will not be $900k in 20 years time but will be $2m instead. This is good news. Thanks for sharing. If what you said is true, then our net worth should be $4m in 20 years time and not $2.04m. That's wonderful.

This is a brilliant post. It shows that retirement is about choice and expectations. I see many average folks who retire happily, spending their old days at hdb void decks and coffee shops. They don't need much. And then there are the high class, arrogant sort who want to retire with maid, car and even keep mistresses. These type of people will not be able to retire even if they have $5m in the bank.

Originally Posted by Unregistered

There are many talk on retirement. Actually, how much do a retired couple today need? Here is a calculation.

Assumptions:

1. Retired couple (65 years olds) do not have dependants, no more older folks to take care and kids all grown up.
2. Children (e.g. 2) are working and giving allowance of $250 to each parent. So, each parent will get $500 pm. As a couple, they get $1000 pm.
3. They do not smoke, drink, gamble and the husband does not womanize nor sodomize. These sinful things will cost you thousands of wasted dollars if indulged in. You will also get lots of diseases (e.g. cancer, STDs, AIDs, liver failure, Hepatitis, etc) that will drain your savings.
4. The flat, e.g. a 4 room flat, is paid up. No more mortgage.
5. No maid.
6. No car. Take public transport.
7. Debt free.
8. Keep fit with exercise and eating healthy food.

Spendings:

1. Food and groceries - $600 pm
2. Utilities - water, electricity, gas - $200 pm
3. Transport - $50 pm
4. Short holidays (pro rated) - $100 pm
5. Other costs - $200 pm

Total - $1150

So, if you have cleared your mortgage and debt free and do not indulge in sins, your spendings as a retired couple is actually very little.

Today, if you are 55 and have reached the min sum of $155k in your CPF SA, you will get $1,200 pm at 65. So as a couple, you get $2,400 pm and plus your allowances from kids you get as a couple $3,400 pm. This is more than your spendings. If you want more money, you can rent out your room for $1000 pm for each room and hence get $2000 extra. You can also do the lease buyback and get maybe $700 pm extra.

So, in total, you can get = $2,400 + $1,000 + $2,000 + $700 = $6,100 pm.

With this kind of money, surely you can retire in peace. Just make sure you DO NOT PERFORM SINS like drinking, gambling, womanising or sodomising (you will get STDs and AIDS).

Originally Posted by Unregistered

In that case our HDB flat which is worth $700k today will not be $900k in 20 years time but will be $2m instead. This is good news. Thanks for sharing. If what you said is true, then our net worth should be $4m in 20 years time and not $2.04m. That's wonderful.

you have forgotten that HDB and majority of private properties are 99 leaseholds.

45, $5600 pm.
43, $5000 pm.
2 kids in secondary school.
small korean car, 5 years old.
home is an old condo bought in 2006 for $500k. now worth $1m. loan left $200k.
cpf and cash combined, $400k.
total net worth, $1.2m.
we will work until we retire at 65. will collect CPF Life, $1200 pm per person.
will sell condo and downgrade to hdb studio flat, costing $100k.
will invest in stocks ($1m from sale of condo) to get dividend of $50k pa.
total passive income, $78k pa or $6500 pm.
if kids give allowance that will be an added bonus but we are not hoping for that.

It is precisely about choice and expectation. The earlier you retire, the less you save, the fewer choices you will have and definitely you have to lower your expectation. Then it is not about not needing much but rather you can't have much.

Another important thing to remember is not to compare yourself with others especially those who have more as this will evoke feelings of jealousy and envy. Retiring with envy will not be a happy retirement.

Originally Posted by Unregistered

This is a brilliant post. It shows that retirement is about choice and expectations. I see many average folks who retire happily, spending their old days at hdb void decks and coffee shops. They don't need much. And then there are the high class, arrogant sort who want to retire with maid, car and even keep mistresses. These type of people will not be able to retire even if they have $5m in the bank.

You have done pretty well for yourself. You own and LIVE in a condo. This puts you among the TOP 15% of Singaporeans. 85% of Singaporeans live in public housing. Your timing to buy in 2006 is perfect, you should consider becoming a hot shot fund manager, not many can time the market as well as you. Since your condo is now doubled in value in just 8 years, this makes your annualized return very high. YOU ARE THE MAN.

Originally Posted by Unregistered

45, $5600 pm.
43, $5000 pm.
2 kids in secondary school.
small korean car, 5 years old.
home is an old condo bought in 2006 for $500k. now worth $1m. loan left $200k.
cpf and cash combined, $400k.
total net worth, $1.2m.
we will work until we retire at 65. will collect CPF Life, $1200 pm per person.
will sell condo and downgrade to hdb studio flat, costing $100k.
will invest in stocks ($1m from sale of condo) to get dividend of $50k pa.
total passive income, $78k pa or $6500 pm.
if kids give allowance that will be an added bonus but we are not hoping for that.