According to a recent survey, 80% of Singaporeans want to retire at age 60. Do they have suffiicient funds to retire? How much money do they need to retire?
I carried out a survey with the participants in a class on financial planning. Most of them come from the lower income group. The results surprised me.
To cover food, utilities and other essentials, a couple needs about $1,000 a month. This assumes that they have a home that is fully paid for. It may be possible to get by with $800 a month, but this does not leave any margin for unexpected expenses.
To provide a monthly sum of $1000, with adjustment for inflation, a person retiring at age 65 needs accumulated savings of $200,000 to last an average remaining lifespan of 20 years. If the person wishes to retire at 60, he will need $230,000.
If you wish to have a more comfortable lifestyle, you will need $2,000 a month. Your accumulated savings has to be $400,000 when you retire at 65, or $460,000 when you retire at 60.
If you do not have this sum of accumulated savings (that is needed for the bare minimum or a comfortable lifestyle), you have the following options:
a) Extend your retirement age to 65 to 70 years.
b) Retire from full time work at 60 to 65, and continue to work part time to earn a supplementary income.
To ensure that you have sufficient savings to last a lifetime, in case you live a very long life, you need to buy a life annuity (which provides pooling of longevity risk).
When you are working, it is important for you to make adequate savings for retirement. You must save 10% to 15% of your earnings, and invest in a low cost investment fund that can earn you a good rate of return.
Do not spend too much money on unnecessary insurance that depletes your savings for retirement. Do not buy financial products that give a poor return, due to high expenses.
Read this FAQ:
- ► 2013 (314)
- ► 2012 (1270)
- ► 2011 (1873)
- ► 2010 (2369)
- ► 2009 (1655)
- ► 2008 (2105)
12/23 - 12/30
- Snow Mountain Tunnel
- Taroko Gorge, Hualien, Taiwan
- Adequate Taxis in Taipei
- Technique to solve Logic Quiz
- Cost and benefit of health insurance
- Existing life insurance policies
- Difficult to get a taxi in Singapore
- My first trip on Taipei MRT
- Strategies to make profit
- Avoid high charges
- Feeder Bus Service
- Taipei Rapid Transit System
- Taxi Fares for 5 km trip
- Shops in Hualien
- Taxi Fares in London
- Taxi Fares in Sydney
- Taxi Fares in New York
- Easy to get a taxi from Taipei Main Station
- Train from Taipeh to Hualien
- Taxi fares in Singapore
- Taxi fares in Hong Kong
- Taxi fares in Taipei
- CPF Dependent Protection Scheme
- Walkway connecting buildings
- Property Agent's Commission on Extending a Lease
- Feeder Bus
- A good time to invest in equities
- MRT in Taipei
- Helpful cashier
- Beware of bad products
- Taipei 101
- Set limit on commission
- Sufficient funds for retirement
- Christmas is not a public holiday
- Politeness in Taipei
- Save for child's education
- High speed train in Taiwan
- Excellent signage at Vivocity
- Avoid traffic congestion
- Like a swan
- Holiday in Taiwan
- Last minute ticket sales for Swan Lake
- Term Insurance Rates
- Lower price for your motor insurance
- Charges of an Investment Linked Policy (ILP)
- Improve the taxi situation
- ▼ 12/23 - 12/30 (46)
- ► 2006 (696)
- ► 2005 (159)