How much is enough for retirement in Singapore?

[kiasuproductscout]

1 Mil? hopefully with some recurring income and working part time?

[Petlover]

tankee:

Petlover:

Assuming that you're spending roughly the same as you're working. You'll need at least 20 to 30 times your yearly salary for your retirement. Why ?

The reason is that you can use that amount of asset to generate a 4-5% yearly cashflow which is roughly equal to your salary.

did you consider inflation?

You can choose certain types of asset in your portfolio which can catch up with the inflation, like real estate...

[KSP]

Well, looking at the situation in Singapore now. A lot of people don’t even have 500k when they reached 55. Considering they have fully paid up their apartment.

[2ppaamm]

KSP:

Well, looking at the situation in Singapore now. A lot of people don't even have 500k when they reached 55. Considering they have fully paid up their apartment.

Then they can now downgrade from their apartment or mortgage that and convert that into cash, right?

[Petlover]

yeah I agree ! For those who are asset rich but cash poor when they retire, reverse mortgage should be a good option for them to turn their asset into cash.

[ThreeCents]

How much you need for retirement will depend on your style of living and inflation. I have a chart based on different living expenses of $2000 to $5000 and 5% inflation rate per year. Feel free to take a look.

http://lifelongfreedom.blogspot.com/2010/01/how-much-will-you-need-to-retire.html

[tamarind]

I thought my mother has planned quite well.


1. She is staying with us, and renting out her old HDB flat. Her rental income is more than sufficient for her to live comfortably. This is much better than saving any amount of money in the bank. The flat can be rented out for another 40 years, by then she will be over 110 years old.

2. She has about $14,000 in her medisave, earning about $700+ interest every year. I bought NTUC Incomeshield for her, which costs about $800 every year. The interest almost covers the premium.
I strongly advise everyone to get medical insurance for their elderly parents. My later father went through major operations, hospitalized for months, and I did not have to come out with any cash at all. His insurance covered most of it, and in the end, he still had about $5000 left in his medisave account. He had only about $8000 in his medisave when he just retired.


We should not be thinking of how much money to save. It is unwise to live on savings, because savings will be depleted one day.

Instead, we should be thinking of ways to generate passive income such as rental income And make sure you have medical insurance, don't even think about paying all hospitalization bills using your savings, very few people can afford to do so.

[hquek]

Agree with what tamarind say, in addition, must still have something in bank account. Understand that many insurers work on reimbursement basis. My friend had to fork out a lot of money upfront for her operation…hospital require payment first then op; insurer is op first, bill already then pay.

[KSP]

tamarind:

Instead, we should be thinking of ways to generate passive income such as rental income

Very well said.

What other ways to generate passive income besides rental?

Everyone in SG is talking about having a second property for retirement. But it's easier to say than done. With everyone having the same mindset and is investment savvy, every dip in property market is a good chance to buy. This has resulted property prices rocketed since last year. Not everyone has the ability to own a second property in SG and not everyone is lucky enough to stay with their children and rent out their HDB to earn a passive income . Me too, not sure whether I can stay with my child's family next time and rent out my apt.

Well, I'm still thinking what my retirement plan is.

[minnie2004]

KSP:

What other ways to generate passive income besides rental?

Another way is to buy REITs. It's more flexible and hassle free than owning and renting out a property. Some of the REITs listed here still have decent discount to NAV (i.e. you're paying less than the market value for the properties) and good dividend yield (some close to 10%). The downside is since it's more liquid than properties, we tend to panic and dump the stocks at the lowest when there's a stock market crash :stupid:

Of course we also need to do some homework about the management and the prospect of the properties a REIT holds and its debt levels (there's always refinancing risk for REITs). So no free lunch lah