How much are you earning per annum?

45, $128k pa. Saves $50k pa.
Wife, 40, $110k pa. Saves $40k pa.
Home is a condo $1.5m, loan outstanding $500k.
CPF plus cash $500k.
Total net worth $1.5m.
How are we doing?
Can we retire at 60?
How to prepare for retirement?

You are a high powered couple. Your combined income of $238k pa is very high when compared to the median household income of $94k pa. Since you can afford a condo, you are among the top performing 15% of Singaporeans who live in private property. 85% live in public housing.

You save in total $90k pa. When you reach 60, your additional savings will be $1.35m. By 60 you would have paid off your mortgage too and your condo would have gone up to say $1.8m. So your net worth when you reach 60 would be at least $3.65m. You both won't have any problem retiring well.

Originally Posted by Unregistered

45, $128k pa. Saves $50k pa.
Wife, 40, $110k pa. Saves $40k pa.
Home is a condo $1.5m, loan outstanding $500k.
CPF plus cash $500k.
Total net worth $1.5m.
How are we doing?
Can we retire at 60?
How to prepare for retirement?

[ks55]

Husband age 45 - 14 years to retirement (at 60)
Wife age 40 - 19 years to retirement (at 60)

Assumptions :
1. Yearly salary both increased by 8%
2. Husband's annual salary at age 60 will be 2.72 x 128k = 348k
3. Wife's annual salary at age 60 will be 4.09 x 110k = 450k
4. Both husband and wife to be taxed at 20% when they reach 60 respectively.
5. At age 60, husband take home pay net of tax will be 278k, whereas wife's will be 360k.
6. CPF contribution is negligible.
7. Saving rate at 15% of current annual salary to achieve 8 x last draw gross annual salary.
8. R.O.I return at 10% a year compounded.
9. To enjoy same standard of living after retirement continueosly (i.e replacement income same as net last take home pay less saving) will be 65% of last draw gross salary (adjusted yearly for 4% inflation).
10. Nest eggs will deplete 19 years after retirement.

Conclusion:-

1. Husband must have 2784k at age 60, then he can spend 19k a month (plus 4% every year) for next 19 years.

2. Wife must have 3600k at age 60, then she can spend 24k amonth (plus 4% every year) for next 19 years.

Pray the above can throw some light for happy retirement in 15 years to come.

Originally Posted by Unregistered

45, $128k pa. Saves $50k pa.
Wife, 40, $110k pa. Saves $40k pa.
Home is a condo $1.5m, loan outstanding $500k.
CPF plus cash $500k.
Total net worth $1.5m.
How are we doing?
Can we retire at 60?
How to prepare for retirement?

When i was 45, my income was 210k and net worth 1.5m (we are about the same level here)
Now at 50, income is 290k and net worth 2.7m. Mainly from saving (this is the golden period to save), equity and property. To prepare for retirement, you have to ensure consistent saving and smart investment, time to let your money work for you.

To share n not bragging nor to criticise, my opinion is that u are heavily leverage, basically your entire asset is your condo at 1.5m if u net off your saving with the loan. When i was 45, i stayed in a 500k 5-rm hdb, fully paid with 1m cash/cpf and i maximised the return during the 08-09 crisis. Now i have upgraded to a 1.2m condo (brought in 2011), fully paid with 1.5m cash/stock/fd/bond/cpf. My philosophy has been to ensure i have the bullet when the next opportunity arises and the stay-in property should be <1/2 of my total asset.

To retire at 60 or whatever age depends on many factors, i.e. whether the projected saving/passive income is able to sustain the lifestyle, what are the liabilities at that time, health situation, any plans to travel the world, need a car, hobbies especially expensive one etc etc. Many things to figure out, i am also in the learning process.

Originally Posted by ks55

Husband age 45 - 14 years to retirement (at 60)
Wife age 40 - 19 years to retirement (at 60)

Assumptions :
1. Yearly salary both increased by 8%
2. Husband's annual salary at age 60 will be 2.72 x 128k = 348k
3. Wife's annual salary at age 60 will be 4.09 x 110k = 450k
4. Both husband and wife to be taxed at 20% when they reach 60 respectively.
5. At age 60, husband take home pay net of tax will be 278k, whereas wife's will be 360k.
6. CPF contribution is negligible.
7. Saving rate at 15% of current annual salary to achieve 8 x last draw gross annual salary.
8. R.O.I return at 10% a year compounded.
9. To enjoy same standard of living after retirement continueosly (i.e replacement income same as net last take home pay less saving) will be 65% of last draw gross salary (adjusted yearly for 4% inflation).
10. Nest eggs will deplete 19 years after retirement.

Conclusion:-

1. Husband must have 2784k at age 60, then he can spend 19k a month (plus 4% every year) for next 19 years.

2. Wife must have 3600k at age 60, then she can spend 24k amonth (plus 4% every year) for next 19 years.

Pray the above can throw some light for happy retirement in 15 years to come.

This is a joke right? Most of us can't see that we will have a job in the next 2-5 years and you can project husband and wife salary to be almost 800k when they are 60! madness!

[ks55]

Originally Posted by Unregistered

This is a joke right? Most of us can't see that we will have a job in the next 2-5 years and you can project husband and wife salary to be almost 800k when they are 60! madness!

Yearly salary increment for high achiever is 10-12 %
For above average is 7 - 9 %
For others is 3 - 6 %

The above is inclusive of promotion and switch of job.

If you have worked for more than 10 years, check how much was your first pay cheque. After 10 years, what is your pay now. You should be able to judge for yourself whether you are high achiever or otherwise.

Likewise, you can discretely find out what is the pay for those high achiever with similar qualification and working experience same as you. You may wish to compare yours with your university mates.

We are 50, and are constantly thinking of retiring, but reality tells us to persevere. Our children are still schooling and we have elderly parents to take care of. Thankfully the gahmen is looking to raise the retirement age to 65. This will give us 15 more years to build up our retirement funds.

Our monthly expense:
1. Allowance to parents & children : $1100
2. Income taxes : $2900
3. Utilities : $250
4. Domestic helper : $550
5. Groceries : $1400
6. Condo fees (x 2) : $650
7. Condo loan (x1) : $3000
8. Car loan (x 1) :$2000
9. Car road tax (x 2) : $200
10. Car insurance (x 2): $200
11. Petrol : $350
12. Children's school fees(x 2) : $600
13. Personal insurance (x2) : $500
14. Family meals at restaurants (x 4) : $800
15. Annual vacation (prorated) : $450
Total monthly expenses : $ 14,000

Monthly income:
Him : $14,500
Her : $8,500
Passive : $9,000 (from rental, dividend & interests)
Total monthly income :$$32,000

Monthly savings (incl CPF): $18,000

Ave. Annual bonus (incl 13th month) : ($14,500 + $8500) x 4 = $92,000

Total yearly savings : $18,000 x 12 + $92,000 = $308,000

If we can continue at this pace till 65, we will be able to accumulate another 15 x $308,000 = $4.6m! Then we can continue to maintain our current lifestyle in retirement. Maybe we will not have 2 cars, and we will save on income taxes. But we will still want a maid to help with household chores.

Originally Posted by Unregistered

15. Annual vacation (prorated) : $450

Did you make a mistake about this one? For only 5.4k a year, where do you usually go for vacations?

Sheesh, you are right. That was a mistake. It should have been $15,000 / 12 = $1250 per month.

That amount $15k will afford us one trip to Europe / US or 2 short trips around the region here.

Originally Posted by Unregistered

Did you make a mistake about this one? For only 5.4k a year, where do you usually go for vacations?

Originally Posted by Unregistered

45, $128k pa. Saves $50k pa.
Wife, 40, $110k pa. Saves $40k pa.
Home is a condo $1.5m, loan outstanding $500k.
CPF plus cash $500k.
Total net worth $1.5m.
How are we doing?
Can we retire at 60?
How to prepare for retirement?

Why you worry so much? Your income is so high compared to many Singaporean households. Don't compare with the many show offs in this forum. You can follow the advice of one smart forumer here who plans to retire in KL to join his relatives and friends. He plan to rent out his flat and get the CPF Life payout as passive income for retirement. You don't need millions to retire well. Just a paid up HDB flat and a CPF Life will do. Only fools don't see this.