The RETIREMENT thread

[SNTCK]

Is 2 million for 2 enough to retire? My partner and I are working towards that. After we get there, maybe stop working altogether, live anywhere we like in the world. Medical fees for serious illnesses will be taken care of by our current government.

Then. Did you buy your house already?

I will continue to work to keep myself occupied.
No work. Too boring life.

Save enough for my very important thing. Then can start to work for family. Which mean work then give money to family, my siblings...

If still got extra, then give charity.

 

[Leongsam]

Is 2 million for 2 enough to retire? My partner and I are working towards that. After we get there, maybe stop working altogether, live anywhere we like in the world. Medical fees for serious illnesses will be taken care of by our current government.

What sort of yield do you expect to get from your $2 million of assets?

 

[SgGoneWrong]

What sort of yield do you expect to get from your $2 million of assets?

Cash, to put into property to get 5% yield tax free/after tax?P

At first I thought put in shares but the uncertainty is too much.

Most properties now 3%+ before taxes.
Apartments can be higher maybe 6%, but then again before taxes. Appreciation for apartments are also limited.
And besides taxes, other rates involved bringing yields down.
Also, dealing with tenants is cumbersome especially those on 6 mths lease, etc. and always have to find new ones. Leave to agent, more cost involved. Lease income also will be taxed.

Or like what Run suggested, put in safe bonds.

 

[OverTheCounter]

What sort of yield do you expect to get from your $2 million of assets?

Can you reply to zhihau? He miss you lots.

 

[Leongsam]

Can you reply to zhihau? He miss you lots.

I read only the threads that I started like this one.

 

[Leongsam]

Cash, to put into property to get 5% yield tax free/after tax?P

At first I thought put in shares but the uncertainty is too much.

Most properties now 3%+ before taxes.
Apartments can be higher maybe 6%, but then again before taxes. Appreciation for apartments are also limited.
And besides taxes, other rates involved bringing yields down.
Also, dealing with tenants is cumbersome especially those on 6 mths lease, etc. and always have to find new ones. Leave to agent, more cost involved. Lease income also will be taxed.

Or like what Run suggested, put in safe bonds.

The answer as to whether your $2 million in assets is sufficient to retire on depends upon what sort of yield you expect to get after tax.

Each 1% return on each million = $10,000.

So $2 million at 3% after tax = $60,000 per year or $5000 per month.

Whether that is "enough" all depends upon what sort of lifestyle you want to lead. It's certainly enough to feed, clothe and house 2 people but it may not be enough to go skiing in the Swiss Alps every year for 2 months.

If you expect a lower yield... say 2% after tax then your income will be $40,000 per annum.

I have always recommended $5 million minimum as a comfortable figure for retirement. You can get by with less but it's not that much fun.

 

[SgGoneWrong]

The answer as to whether your $2 million in assets is sufficient to retire on depends upon what sort of yield you expect to get after tax.

Each 1% return on each million = $10,000.

So $2 million at 3% after tax = $60,000 per year or $5000 per month.

Whether that is "enough" all depends upon what sort of lifestyle you want to lead. It's certainly enough to feed, clothe and house 2 people but it may not be enough to go skiing in the Swiss Alps every year for 2 months.

If you expect a lower yield... say 2% after tax then your income will be $40,000 per annum.

I have always recommended $5 million minimum as a comfortable figure for retirement. You can get by with less but it's not that much fun.

Thanks Sam.
5 mil could be too ambitious, we would have to work till very old.

 

[SNTCK]

Thanks Sam.
5 mil could be too ambitious, we would have to work till very old.

How old r u? I also think 5M for retirement is too much..
2M cash for retirement just nice if you have no kids....

 

[Leongsam]

How old r u? I also think 5M for retirement is too much..
2M cash for retirement just nice if you have no kids....

How do you know that 2 Million cash is "just nice"? Please show us the calculations that lead you to this conclusion eg expected yield vs expenditure, reserve funds etc.

 

[SNTCK]

How do you know that 2 Million cash is "just nice"? Please show us the calculations that lead you to this conclusion eg expected yield vs expenditure, reserve funds etc.

Ok. My expenditure.monthly
Hp bill!+home utility+broadband 200
Home cooked food 500 for 2 person ( buy ingredient ffom morning market n ntuc)
Grocery 200
Entertainment n personal use 800 for 2 person
Transport fee 150 for 2 person per mth

Roughly 1800 to 2000 for 2 person per month.

one year 24k...

If 2M cash generate 3% passive income....60k per yr..

Far far more than enough.....

 

[SgGoneWrong]

Ok. My expenditure.monthly
Hp bill!+home utility+broadband 200
Home cooked food 500 for 2 person ( buy ingredient ffom morning market n ntuc)
Grocery 200
Entertainment n personal use 800 for 2 person
Transport fee 150 for 2 person per mth

Roughly 1800 to 2000 for 2 person per month.

one year 24k...

If 2M cash generate 3% passive income....60k per yr..

Far far more than enough.....

U missed out travel at least 10k a yr.
Why your phone, broadband, water, gas, electricity only 200 a mth?
No need to buy new clothes?
75 bucks each to travel a month enough?
Health supplement cost?
No need pay rental or property tax?

Retirement should be relatively comfortable.

 

[happyjoe]

As the boss mentioned earlier, how much is enough depends on what lifestyle you desire then you work backwards.

I think monthly spend of 2k is really optimistic.

 

[SNTCK]

U missed out travel at least 10k a yr.
Why your phone, broadband, water, gas, electricity only 200 a mth?
No need to buy new clothes?
75 bucks each to travel a month enough?
Health supplement cost?
No need pay rental or property tax?

Retirement should be relatively comfortable.

I do not switch on air con. Hp bill 50. Wifi 40. Utilities 110.

Travel....some health problem. I cant travel much...
But one thing you have point out. Medical fee. I think I may need huge medical fee when I middle age...

Rental and property tax? this one I not sure. Because I am not the one paying this. So I forgot to add in. And not sure how much it cost...

I think I may need to include medical fee sgd 1.5k per mth...so I need 20k more....

 

[Leongsam]

I do not switch on air con. Hp bill 50. Wifi 40. Utilities 110.

Travel....some health problem. I cant travel much...
But one thing you have point out. Medical fee. I think I may need huge medical fee when I middle age...

Rental and property tax? this one I not sure. Because I am not the one paying this. So I forgot to add in. And not sure how much it cost...

I think I may need to include medical fee sgd 1.5k per mth...so I need 20k more....

When you say "just nice", what you mean is it's just nice for you. However, that doesn't mean it's just nice for everyone.

For example some couples may be used to changing cars every 5 years. That's $200,000 or more minimum or $40,000 per year. Add road tax, maintenance, petrol and you're talking more than $50,000 per year in overheads.

Life insurance premiums, medical insurance, home maintenance all add to the pain. It can well add up to almost $100,000 per year.

That is the reason why my advice is to aim for $ 5 million. It provides $150,000 per year in passive income at 3% which is a comfortable lifestyle that most would like to lead. Living like a pauper after retiring is not my cup of tea and most people would share my view.

 

[johnny333]

I am currently comfortable in Spore but I am planning for the worst scenario. Such as getting ill.

When you get old you are likely to need expensive medical care. With so much uncertainties in Spore, I am looking at moving someplace cheaper like LOS where living costs are more manageable. Unlike in Spore you can choose to live the high life or a cheap & humble life. You have the choice.

 

[Leongsam]

I am currently comfortable in Spore but I am planning for the worst scenario. Such as getting ill.

When you get old you are likely to need expensive medical care. With so much uncertainties in Spore, I am looking at moving someplace cheaper like LOS where living costs are more manageable. Unlike in Spore you can choose to live the high life or a cheap & humble life. You have the choice.

Don't look at it. Just do it.

 

[OverTheCounter]

In financial planning more is better than less.

Always aim to have as much retirement funds as possible because you need to prepare for contingencies. Also you may decide to pick up resource consuming hobbies.

You should try to monetize your hobbies as well. Start writing for money for instance. Don't just post in the forum FOC. Do snippets of freelance work even in your retirement to keep the cash coming in. Use the internet to generate passive income. Become a lifestyle blogger for example. Or set up a blogshop selling trinkets.

Or you can be a tutor. Or a freelance web designer. Whatever your skills are keep using them and keep the money coming. Don't just sit idle and consume resources. Retirement doesn't have to mean you stop all income generating activities. It can simply mean you do what you want when you want and you report to no one anymore.

 

[Leongsam]

Don't just post in the forum FOC.

How much do you charge for starting quality threads?

 

[OverTheCounter]

How much do you charge for starting quality threads?

A derisory

 

[atakak]

I wish to ask the person stated this thread a few questions. If a 49 years old person has an income of 600,000 Singapore dollars a year his monthly expenses is $15,000 a month, spends another $80,000 on holidays a year, spends another $40,000 on life insurance for himself and his spouse. He is left with $300,000. He doesn't own a home as he rents which is covered in the monthly expenses above, neither does own a car because he don't need one. Say this person will continue to have this annual income for the next 15 years assuming the income also grow with inflation etc. Questions are (1) how should be spend his extra $300,000? (2) should he buy a house/flat?