How much are you earning per annum?

You have done well as a millionaire couple. If you want more income at 55, you can sell your condo upon reaching 55 and then downgrade to a 4 room hdb flat. This downgrading process will give you a net proceeds of $1m. Your savings could be $1m. In total you will have $2m for you to invest in 5% dividend yield stocks. Your passive income will be $100k pa. with this income you can retire very luxuriously. You can afford to continue owning a car.

Originally Posted by Unregistered

Married couple, 40 & 39 years old. Two teenage kids.
Total income $218k pa.
Total expenses $159k pa.
Total savings $59k pa.

Key expenses

- Mortgage (until age 55) $2400 pm
- Car loan and car related expenses $1800 pm
- Kids expenses including tuition $1000 pm
- Food, groceries, utilities and eating out $1700 pm
- Parental allowance $1400 pm
- Insurance $1600 pm
- Holidays $10,000 pa
- Others $2500 pm

Net worth

- Equity on condo $850k
- Cash and CPF savings $400k
- Total net worth $1.25m

Are we doing ok financially?
How can we prepare for retirement?
Is it possible for us to retire at 55?
We appreciate good, serious advice.
Thanks.

Married couple, 39 & 34 years old. Spouse is currently not working. Two young kids, one more on the way end of this year.
- Annual income ~$210K pa.
- Annual expenses ~$60K pa.
- Holidays $10,000 pa
- Mortgage paid up
- Car paid up (left 5+ years)
- Life Insurance paid up
- Medical Insurance covered by company

Net worth
- Equity on apartment $720K
- Cash and CPF savings $630K
- Total net worth $1.35m

Have been thinking of a condo purchase at 2.2mil to cater for growing family. 1st apartment is in spouse's name, so this one will be in mine. Once we move, we expect to rent out the first apartment for 3.3K pm.

Would we be over-leveraged? We appreciate good, sound advice. Thanks!

Originally Posted by Unregistered

You have done well as a millionaire couple. If you want more income at 55, you can sell your condo upon reaching 55 and then downgrade to a 4 room hdb flat. This downgrading process will give you a net proceeds of $1m. Your savings could be $1m. In total you will have $2m for you to invest in 5% dividend yield stocks. Your passive income will be $100k pa. with this income you can retire very luxuriously. You can afford to continue owning a car.

Hi all,

I'm a young professional and have been following this thread for some time now. I'm just curious as to why so many of the replies as quoted above seem to harbour a similar theme of downgrading to HDB upon retirement to generate cash flow to invest in revenue-generating assets.

I am not sure if it is the same person providing this advice, and I am by no means an expert on the matter, but realistically, how many people (especially in Singapore) will feel comfortable downgrading after so many years of working, saving and financial planning to afford private housing, only to retire and have to downgrade to public housing? Further, how many of them would sell their home and move to a 3rd world country like Thailand/JB just so they can convert SGD to the local currency and feel rich? These ideas seem really ridiculous and careless to me, which is why I am asking if anyone actually does and if so, are you really happy?

I mean, the ones who have paid up private housing in Singapore will probably have life insurance and reasonably large nest eggs in CPF anyway, not to mention their cash reserves are probably already being used to produce income from stocks/FD/etc..

Will be happy to debate the issue and see what you guys think of this.. Thanks!

[lazyplane]

It is the same few people posting.. and same few people replying.

Also, dont you think it is odd so many people are asking "how am i doing" yet posting incomes/networth that are astronomical ?

A simple statistic search of Singapore gov databases will give you an idea ..and if you dont believe in gov databases, then go build your own to validate ...

Originally Posted by Unregistered

Hi all,

I'm a young professional and have been following this thread for some time now. I'm just curious as to why so many of the replies as quoted above seem to harbour a similar theme of downgrading to HDB upon retirement to generate cash flow to invest in revenue-generating assets.

I am not sure if it is the same person providing this advice, and I am by no means an expert on the matter, but realistically, how many people (especially in Singapore) will feel comfortable downgrading after so many years of working, saving and financial planning to afford private housing, only to retire and have to downgrade to public housing? Further, how many of them would sell their home and move to a 3rd world country like Thailand/JB just so they can convert SGD to the local currency and feel rich? These ideas seem really ridiculous and careless to me, which is why I am asking if anyone actually does and if so, are you really happy?

I mean, the ones who have paid up private housing in Singapore will probably have life insurance and reasonably large nest eggs in CPF anyway, not to mention their cash reserves are probably already being used to produce income from stocks/FD/etc..

Will be happy to debate the issue and see what you guys think of this.. Thanks!

You're playing a dangerous game. Definitely overleveraged and high risks. Better for you to sell your hdb flat and use the proceeds to pay for downpayment of a $1.2m condo so your loan will only be $500k. If you lose your job, you won't be do worried. Don't be too confident of your high salary as it may not last long.

Originally Posted by Unregistered

Married couple, 39 & 34 years old. Spouse is currently not working. Two young kids, one more on the way end of this year.
- Annual income ~$210K pa.
- Annual expenses ~$60K pa.
- Holidays $10,000 pa
- Mortgage paid up
- Car paid up (left 5+ years)
- Life Insurance paid up
- Medical Insurance covered by company

Net worth
- Equity on apartment $720K
- Cash and CPF savings $630K
- Total net worth $1.35m

Have been thinking of a condo purchase at 2.2mil to cater for growing family. 1st apartment is in spouse's name, so this one will be in mine. Once we move, we expect to rent out the first apartment for 3.3K pm.

Would we be over-leveraged? We appreciate good, sound advice. Thanks!

Originally Posted by Unregistered

Married couple, 39 & 34 years old. Spouse is currently not working. Two young kids, one more on the way end of this year.
- Annual income ~$210K pa.
- Annual expenses ~$60K pa.
- Holidays $10,000 pa
- Mortgage paid up
- Car paid up (left 5+ years)
- Life Insurance paid up
- Medical Insurance covered by company

Net worth
- Equity on apartment $720K
- Cash and CPF savings $630K
- Total net worth $1.35m

Have been thinking of a condo purchase at 2.2mil to cater for growing family. 1st apartment is in spouse's name, so this one will be in mine. Once we move, we expect to rent out the first apartment for 3.3K pm.

Would we be over-leveraged? We appreciate good, sound advice. Thanks!

Do you expect your income to grow over the next 20 years? And that your spouse will go back to the workforce?

If you do, you may not be over-leveraged. If not - and you can't count on the 3.3k rental income - then the key thing to worry about is the monthly cashflow.
Assume you put down 440k as downpayment, your 1.76 mil loan will work out to about $7,400 a month (or 88.8k a year) on a 30 year loan, assuming 3% interest rate.

Might be better to trade in your existing flat for the 2.2 mil one, if you need to move.

Originally Posted by Unregistered

Do you expect your income to grow over the next 20 years? And that your spouse will go back to the workforce?

If you do, you may not be over-leveraged. If not - and you can't count on the 3.3k rental income - then the key thing to worry about is the monthly cashflow.
Assume you put down 440k as downpayment, your 1.76 mil loan will work out to about $7,400 a month (or 88.8k a year) on a 30 year loan, assuming 3% interest rate.

Might be better to trade in your existing flat for the 2.2 mil one, if you need to move.

Well yes I do expect my income to grow albeit at a slower trajectory, and presumably my spouse will rejoin the workforce after our 3rd child is born (unless we strike TOTO before then! :P). Her expected income would be around 50-60K pa though.

We have considered selling and upgrading, but the market is down right now. Moreover our current place should be easy to rent out as it is near MRT and in the central area. Our thinking is that if in the event we lose our income streams, we could still come back and stay in the smaller apartment, and sell or rent out the bigger one (assuming rent can cover mortgage).

Originally Posted by Unregistered

You're playing a dangerous game. Definitely overleveraged and high risks. Better for you to sell your hdb flat and use the proceeds to pay for downpayment of a $1.2m condo so your loan will only be $500k. If you lose your job, you won't be do worried. Don't be too confident of your high salary as it may not last long.

I have gotten advice that "because I am getting older, it would be increasingly difficult to qualify for house loans. So I should try to take as large a loan as possible (with the caveat of not being over-leveraged) while still young." Is there any truth in that advice? Thanks for your advice, it is sound but it seems a bit too risk-adversed?

I'm surprised that you find this surprising. Many people do downgrade in order to monetise their housing asset. There are people who downgrade from landed property to a hdb flat so that they have cash in hand. About retiring overseas, this is not unheard of. We even have a doctor in this forum who is planning to retire in JB at an early age. You may want to mix with more people to understand what people are doing for their retirement.

Originally Posted by Unregistered

Hi all,

I'm a young professional and have been following this thread for some time now. I'm just curious as to why so many of the replies as quoted above seem to harbour a similar theme of downgrading to HDB upon retirement to generate cash flow to invest in revenue-generating assets.

I am not sure if it is the same person providing this advice, and I am by no means an expert on the matter, but realistically, how many people (especially in Singapore) will feel comfortable downgrading after so many years of working, saving and financial planning to afford private housing, only to retire and have to downgrade to public housing? Further, how many of them would sell their home and move to a 3rd world country like Thailand/JB just so they can convert SGD to the local currency and feel rich? These ideas seem really ridiculous and careless to me, which is why I am asking if anyone actually does and if so, are you really happy?

I mean, the ones who have paid up private housing in Singapore will probably have life insurance and reasonably large nest eggs in CPF anyway, not to mention their cash reserves are probably already being used to produce income from stocks/FD/etc..

Will be happy to debate the issue and see what you guys think of this.. Thanks!

Originally Posted by Unregistered

I'm surprised that you find this surprising. Many people do downgrade in order to monetise their housing asset. There are people who downgrade from landed property to a hdb flat so that they have cash in hand. About retiring overseas, this is not unheard of. We even have a doctor in this forum who is planning to retire in JB at an early age. You may want to mix with more people to understand what people are doing for their retirement.

Hi, I'm the poster you replied to. Thanks for your response, perhaps I should mix with more people to understand the various retirement strategies around. Maybe I didn't express myself clearly enough, though. I don't find it surprising that people are doing that; I just find it somewhat unrealistic if you will.

I mean, theoretically it makes perfect sense to me - stripping down to basic necessities by downgrading, increasing cash flow to fund retirement. It's a simple concept really. In practical terms, however, I'm of the impression that once one gets used to a certain quality/standard of living, it becomes hard to go back to basics (in my opinion at least). I don't mean to bash or put down any of those who do choose to do that, mind. That's why I directed the question at those who may or have already chosen that retirement strategy.

Just wanted to survey if people who have done so are as happy/content as they thought they might have been when they made the choice.

Once again thanks for your input

Originally Posted by Unregistered

I'm surprised that you find this surprising. Many people do downgrade in order to monetise their housing asset. There are people who downgrade from landed property to a hdb flat so that they have cash in hand. About retiring overseas, this is not unheard of. We even have a doctor in this forum who is planning to retire in JB at an early age. You may want to mix with more people to understand what people are doing for their retirement.

I know which doctor you are referring to.
You need to know the background I.e.
a) her hubby is a malaysian
b) she is having difficulty actually retiring there cos her children are still young.

So JB retirement is plausible BUT only for certain people...