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17-09-2013, 09:01 AM
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Quote:
Originally Posted by Unregistered
for this 55 year old couple, to retire is simple. sell their condo, get $1.5m. buy a condo studio unit to stay (cost only about $600k in woodlands, yishun, bukit panjang, changi) and invest $900k in 7% investments (gives $63k pa). annual spending should only be about $40k. no need car, cook simple meals and just spend relaxing in condo gym and pool. problem solved.
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Is the 7% return on REITS stable let's say for past 20 years? It is no guarantee..
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17-09-2013, 09:32 AM
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Quote:
Originally Posted by Unregistered
Although highly suspicious, the post on the 55,56 yr old retiree couple however highlighted an interesting case study about how much one can realistically invest their life savings to generate income to fund their retirement.
Lets take a hypothetical couple Mr and Mrs Tan both 55 with a net worth of $1M including their HDB 4 room flat retiring today. Today CPF requires them to set aside a minimum sum of $148K per person. Let's say they pledge half of this amount with their property, so that would mean leaving the $148K in CPF. Medisave require another $40.5K each or $81K total to be put aside for the couple. Assume also that the 4 rm flat is worth $400K. That leaves the couple a sum of ($1M - $148K - $81K - $400K = ) $371K
Assuming the couple puts aside an emergency amount of $50K, leaving $321K for investment.
If invested in equities (say reits) they may get 7% return or $21K pa. A good sum but not enough to fund a comfortable retirement for 2. They could also risk losing part of the $321K in the process.
If they require $40K pa for a very frugal existence, they will have to chip away the savings meaning the emergency cash ($50K) will go first (in 2 years), followed by the equities (the $321K) in another 7 years maybe. Remember the CPF minimum will go towards their Annuity Life Plans that will only pay out to them at 65 - a good 10 years away. They also cannot touch their medisave amount - only for medical expense.
The prognosis is not encouraging. It seemed a foregone conclusion that Mr and Mrs Tan would have to downgrade from 4 room flat to survive their retirement well into their 80s or they have to postpone retirement till they are 65.
And here we are talking about a couple with $1M Net Worth!
Can somebody help check the numbers!?
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I notice a sign of modern ppl nowadays, tend to think and consider too much.. may be they are expose to some financial calculations and knowledge. Compared to ppl in the past, if they have passive income of 2-3k a month they live happily.. cos house and car fully paid up (after so many years), children education done. Thats it, whtat you spend is eat and how much you can eat, can you go restaurant everyday? I am sure you will miss hawker food then (not talking bout your wallet) and daily expenses is very low when you are 60's. And you have children to bring you out for dinner on weekends (if you ahve).. retiring life is simple, and PLEASE keep/make it simple.
Dont have to calculate this and that, factoring in inflation... blah blah blah... why not factor in WWIII, earth quake, global warming, island sinking.. these are all beyond control.. just back to basic please.. ppl are getting more squarish when they are educated, know more, but not all, thinking and considering too much in doing anything, end up all work until old age and not even retired then sleep in hospital ald.
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17-09-2013, 04:11 PM
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When you reach 65, you can stay with one of your two children. You rent out your Queenstown HDB flat (executive) and get $5k pm. Each of your children will give you $1k pm. So in total, you get $7k pm. So easy to retire provided you raise your kids to be filial children. That is why you must not neglect them now as parents or else they will be rude to you, disrespect you and see you as a burden. Don't spend too much time enjoying yourselves outside drinking, womanizing, etc. Spend time with your children.
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17-09-2013, 06:24 PM
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There are many people who sold their HDB flat and retire overseas. If they sell their HDB flat for $700k, they can get RM1.7m, they are millionaires in Malaysia. If they retire in some China or Indian village, they will be the richest people in their village. PRs are happily selling their HDB flat and retire in their home country. We should impose capital gains tax on PRs selling their HDB flat, then it is fair.
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17-09-2013, 09:53 PM
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Verified Member
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Join Date: Sep 2013
Posts: 24
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Quote:
Originally Posted by Unregistered
Is the 7% return on REITS stable let's say for past 20 years? It is no guarantee..
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I know REITS very well, I bought a lot of Capitamall in 2003 or so when noone knew what REITS were. I saw it up to its peak in 4.25 or so. and was with it down to the bottom. No, they don't have a 7% return...not if you bought at 4.25, not even if you did the magic 'dollar cost averaging' journalists on Sunday Times or Business Times tell you to do...and no, they don't have a 20 year history..
Anyway, all should be careful about the recovering economy's impact on interest rates and therefore fixed income such as REITS and bonds. One of the most irresponsible articles I saw recently when I was back in Singapore was the big full page article "Moody's says REITS are safe" or something like that. That journalist should be taken out and given a lashing.
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17-09-2013, 09:58 PM
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Verified Member
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Join Date: Sep 2013
Posts: 24
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There are people around here who say they can live with $3k or move to Malaysia or somewhere else to live.
I urge them: If you don't be true on this forum, you owe it to yourself to be true to yourself. When the time comes when you have to live on $3k, you won't like it. It is different to say I have $10k, and I live on $3k, compared to I have $3k, and live on $3k. If you live on all that you have, you will live a miserable existence.
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17-09-2013, 10:10 PM
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Verified Member
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Join Date: Sep 2013
Posts: 24
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Allow me to share 3 things you must know in stock investing:
1/ What to buy
2/ When to enter
3/ When to exit
It seems stupid to even say the above, but how many even more stupid people have not thought about the above before they buy a stock? Some don't do their research (what to buy). Some listen to rumours and know what to buy, and enter at the wrong time. Some think Warren Buffett and never exit, and ride the stocks to insolvency.
Some investors think they are clever and try to follow the hedge funds or other famous 'successful' friends. They are like people to cross the street by following others behind..except they get knocked down and the person in front didnt!
I'm saying this from real experience because I, myself was once guilty of ALL of the above.
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18-09-2013, 08:06 AM
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All this worrying of retirement is totally unnecessary. You can retire easily upon reaching 65. Me and my wife have benefitted from the genius of the government's home ownership and asset enhancement policies. My HDB estate underwent upgrading and now the estate looks wonderful. I am renting out my flat to an FT family at $4k a month and now staying with my daughter. The $4k pm is more than enough, in fact we hardly spend the money as my daughter takes care of our food, medical, etc. I hope our flat's value and rent will remain strong and rising. Our HDB is our retirement asset, our smart system enables us to retire, unlike in the west. I bought my flat at only $100k many years ago and now it is worth $800k. So your HDB flat is your best investment asset. So, don't worry about retirement. Make sure you raise your kids well and they will look after you at old age. Don't stay single, you will die a lonely death when you die. Also don't be a gay, please.
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18-09-2013, 09:03 AM
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Quote:
Originally Posted by Unregistered
There are many people who sold their HDB flat and retire overseas. If they sell their HDB flat for $700k, they can get RM1.7m, they are millionaires in Malaysia. If they retire in some China or Indian village, they will be the richest people in their village. PRs are happily selling their HDB flat and retire in their home country. We should impose capital gains tax on PRs selling their HDB flat, then it is fair.
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They sell and retire somewhere else is not because of the money they need from selling HDB, is the quality of life, even you are rich, there is a lot of constraints... but if you live somewhere else, you can buy a plot of land and build your own bunglo.. the value of your money.. understand?
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18-09-2013, 09:06 AM
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Quote:
Originally Posted by Jeff
I know REITS very well, I bought a lot of Capitamall in 2003 or so when noone knew what REITS were. I saw it up to its peak in 4.25 or so. and was with it down to the bottom. No, they don't have a 7% return...not if you bought at 4.25, not even if you did the magic 'dollar cost averaging' journalists on Sunday Times or Business Times tell you to do...and no, they don't have a 20 year history..
Anyway, all should be careful about the recovering economy's impact on interest rates and therefore fixed income such as REITS and bonds. One of the most irresponsible articles I saw recently when I was back in Singapore was the big full page article "Moody's says REITS are safe" or something like that. That journalist should be taken out and given a lashing.
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Journalist are propably paid to say that or dont know much about economics..
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