FIRE (Financial Independence, Retire Early) Movement

[limster]

those who follow local bloggers closely will probably recall which blog it is, but I recall a local blogger that claimed he FIRE, but his wife still working. So it depends on your spouse.

 

[revhappy]

those who follow local bloggers closely will probably recall which blog it is, but I recall a local blogger that claimed he FIRE, but his wife still working. So it depends on your spouse.

Haha then it just means he is the stay at home, dad/husband.

 

[junlove]

can meh, FIRE alone. i do that my wifu will whack me big time...

sighs, guess i can only combine NW and divide by 2...

 

[hwmook]

those who follow local bloggers closely will probably recall which blog it is, but I recall a local blogger that claimed he FIRE, but his wife still working. So it depends on your spouse.

I also want to be like that, wife work then I stay at home.

 

[BBCWatcher]

CNA posted a Money Talks podcast about retirement. OCBC's head of wealth management cited some retirement expense figures. Their lowest such figure is S$2,725 per month (2024 Singapore dollars). That's their basic retirement lifestyle figure, and of course there are some assumptions that go into that estimate including household size. (I'm pretty sure that's the figure for a household consisting of two Singaporean citizens retired in Singapore. A couple that includes any Singapore Permanent Residents or LTVP/LTVP+ holders would need more. Singles would need less.)

First of all, does anyone want to quibble with that figure? Or does it seem about right for a basic retirement lifestyle in Singapore?

Second, whatever that figure is (let's assume S$2,725), what you should be doing/engineering is to nail down escalating life annuity income at or slightly above that level. Because you never want to fall below a basic/minimum lifestyle, so that's what longevity insurance accomplishes — the critical convergence point you should be hitting. Start payouts from age 70 — that'll make the retirement math easier. And formulate your retirement income plan based on the CPF LIFE Escalating Plan whether or not you end up selecting that payout plan. In particular, if you reach age 69.9 and are then in genuinely poor health you probably won't choose the Escalating Plan. Don't forget to convert age 70 payout estimates to current (2025) Singapore dollars.

What you'll find of course is that the government's chosen Basic Retirement Sum and Full Retirement Sum figures don't align with OCBC's basic retirement lifestyle figure. The BRS and even FRS simply won't generate enough baseline escalating life annuity income even from age 70. And it's particularly tricky for a couple since the death of one spouse/partner hugely slashes CPF LIFE income much more than household expenses go down.

If you want to "FIRE," CPF LIFE from age 70 (and particularly the Escalating Plan) is a hugely helpful tool. Do the retirement math! Self-insuring against longevity risk is very expensive, meaning you'd have to work longer/save more if that's how you're trying to solve your retirement financial puzzle. Compare a Safe Withdrawal Rate-based figure from own assets to what you can accomplish from a CPF LIFE income flow. It's a stark contrast.

Of course if your baseline lifestyle is more expensive — if you insist on owning a private automobile in Singapore, for example — then you're going to be working longer and/or retiring later. That's tautological. That's why I point out that certain lifestyle choices (and they are often choices) are fundamentally incompatible with "FIRE" principles if that's what you're trying to achieve. The "FIRE" literature (blogs, videos, etc.) places a heavy emphasis on "well-edited" lifestyles to make the "FIRE" math that much easier and quicker.

 

[chong18]

What you'll find of course is that the government's chosen Basic Retirement Sum and Full Retirement Sum figures don't align with OCBC's basic retirement lifestyle figure. The BRS and even FRS simply won't generate enough baseline escalating life annuity income even from age 70.

I thought FRS payout is about $1.4k-1.5k per month? Isn't that aligned with OCBC's figures ($2.7k assumed for a couple so one pax $1.3k+)

 

[singaporean11]

I thought FRS payout is about $1.4k-1.5k per month? Isn't that aligned with OCBC's figures ($2.7k assumed for a couple so one pax $1.3k+)

For people hitting 55 years old in 2024 and with Retirement Account = FRS, their CPF Life standard payout is estimated to be about S$1600 p.m.

Based on the many blog articles and interesting living costs data, I have the sense that S$1600 p.m. per person is sufficient for basic living in Singapore (really "BASIC" living, HDB flat fully paid off, no car, no expensive overseas holidays, no air-con and fan only, no eating out and only eating cheap home cooked food etc!).

Some people will say couple (and not single person) how if the spouse does not have CPF Life payout? Well, actually the spouse don't really need to spend much more other than food since the rest of the costs for housing etc is about the same whether a single person or a couple is living in the house. Housing is always the biggest expenditure for a person.

I believe Gov already taken into consideration the CPF Life payout required for really basic living when they determine the FRS for each cohort, which is fair. People who feel CPF Life payout for FRS RA is not enough can always top up to ERS.

 

[LWZ]

those who follow local bloggers closely will probably recall which blog it is, but I recall a local blogger that claimed he FIRE, but his wife still working. So it depends on your spouse.

know of a young female SG YouTuber who also claimed to FIRE after just five years of intense working, saving and investing in fixed d

she is now basically an unemployed partner (dunno if they married anot) of a Swiss citizen, so is there on a family visa

 

[Nofear40]

https://www.facebook.com/share/1Ax1Tekia2/?mibextid=WC7FNe
Magic number is out
1.3mm

 

[MichealScott]

My portfolio market value is at S$200k. Split 60% Global ETF and 40% SG ETF + SG div. stocks. Admittedly, global stocks has much higher capital gains.

Not sure if i am doing well. Only started investing around 26yo when i started working.

 

[highsulphur]

https://www.facebook.com/share/1Ax1Tekia2/?mibextid=WC7FNe
Magic number is out
1.3mm

“While possessing strong earning potential and financial firepower, those aged 25 to 44 invest only about 15 to 17 per cent of their monthly salaries. This is the lowest among pre-retirement age groups,” it said.

that's because of your sky high property prices??

 

[BBCWatcher]

I thought FRS payout is about $1.4k-1.5k per month? Isn't that aligned with OCBC's figures ($2.7k assumed for a couple so one pax $1.3k+)

For people hitting 55 years old in 2024 and with Retirement Account = FRS, their CPF Life standard payout is estimated to be about S$1600 p.m.

Wrong payout plan (look at Escalating), wrong starting age (look at 70 — that part helps somewhat), not adjusted to 2024 dollars (OCBC’s figure is that), and you must cater to the loss of one annuity stream (meaning both must be higher because household expenses certainly don’t fall by ~52% when the first spouse/partner dies). Highly preferably either Escalating Plan annuity stream would be large enough to handle the whole household “A” scenario with a household size of 1. That’ll clearly be above the FRS.

This is all just straightforward retirement financial math. And it’s implicitly assuming an average inflation rate of 2%/year. That’s a little too brave. Stress testing to 3%/year is a good idea.

I believe Gov already taken into consideration the CPF Life payout required for really basic living when they determine the FRS for each cohort, which is fair. People who feel CPF Life payout for FRS RA is not enough can always top up to ERS.

I note the government would allow a pair of BRS-level CPF LIFE annuities, and that’s assuming two RAs even get funded that much. That’d be even farther off OCBC‘s “A” scenario estimate.

The government’s objectives in this area are different than “normal” baseline retirement financial planning. That’s why I’m highlighting this point.

 

[CrashWire]

My portfolio market value is at S$200k. Split 60% Global ETF and 40% SG ETF + SG div. stocks. Admittedly, global stocks has much higher capital gains.

Not sure if i am doing well. Only started investing around 26yo when i started working.

We don't know how old you are, how much $200k is in relation to your net worth, whether you have a paid-for flat or will inherit a GCB, etc…

 

[SBC]

Networth hitting sgd 4million this year if nothing goes wrong (work income and passive fixed income coupons)

Still thinking of retiring but no guts to do it. Passive income is about sgd10k a month but with work, total income is 30-40k a month (depends on bonuses).
Lifestyle will likely to be downgraded.
May even have to do without car.

Wonder how people with young dependants did it? In my early 40s.
Hmmmm

Power. Networth 4-mil is personal?

Networth hitting sgd 4million this year if nothing goes wrong (work income and passive fixed income coupons)

Still thinking of retiring but no guts to do it. Passive income is about sgd10k a month but with work, total income is 30-40k a month (depends on bonuses).
Lifestyle will likely to be downgraded.
May even have to do without car.

Wonder how people with young dependants did it? In my early 40s.
Hmmmm

is 4mil personal networth?

 

[abcde78]

Power. Networth 4-mil is personal?

is 4mil personal networth?

Yes personal. Individual

 

[MichealScott]

We don't know how old you are, how much $200k is in relation to your net worth, whether you have a paid-for flat or will inherit a GCB, etc…

oh right. I am 32 yo now. sorry about that missing info

 

[Listopad]

With a 60 eq/ 40 bond portfolio, SWR at around 2%, am trying to figure out if there’s still a need for cpf life at ERS level? Wouldn’t the portfolio already be able to hedge longevity risk?

 

[BBCWatcher]

With a 60 eq/ 40 bond portfolio, SWR at around 2%, am trying to figure out if there’s still a need for cpf life at ERS level? Wouldn’t the portfolio already be able to hedge longevity risk?

I think it's really a question of financial freedom — or flexibility if you prefer that word. There are a LOT of things you can do when you don't have to worry about ever falling below Lifestyle Level X. Example: Want to help your grand niece start a new business with a capital injection? No problem.

I really, really think a lot of people are missing the boat on this. "Nail it down, then have fun" basically.

 

[Listopad]

I think it's really a question of financial freedom — or flexibility if you prefer that word. There are a LOT of things you can do when you don't have to worry about ever falling below Lifestyle Level X. Example: Want to help your grand niece start a new business with a capital injection? No problem.

I really, really think a lot of people are missing the boat on this. "Nail it down, then have fun" basically.

Not understanding the last part of missing the boat, nail it down then have fun? Elaborate ?

Mathematically , portfolio of this spilt would yield say 5%, with swr at 2%, the net 3% to compound reinvest . Would that make more sense than to top up to ERS or is this assumption too bold to make ?

 

[BBCWatcher]

Not understanding the last part of missing the boat, nail it down then have fun? Elaborate ?
Mathematically , portfolio of this spilt would yield say 5%, with swr at 2%, the net 3% to compound reinvest . Would that make more sense than to top up to ERS or is this assumption too bold to make ?

1. Take an investment sum of $X, compute its Safe Withdrawal Rate (SWR) figure — conventionally, the first year percentage you withdraw at age 65, which then results in $Y. $Y would be adjusted upward in subsequent years to track Singapore dollar inflation.

2. Take the same $X, drop it into CPF RA, and compute $Z (the resulting increase in the CPF LIFE Escalating Plan's payout figure from age 65).

I think you'll find that $Z is greater than $Y with reasonable model assumptions. In other words, CPF LIFE yields more real retirement lifestyle per input dollar than you or I can generate per investment portfolio dollar. At which point I think the optimal decision is simple: determine the minimum real retirement lifestyle you don't want to fall below, then fund your CPF Retirement Account such that the CPF LIFE Escalating Plan payout from age 70 is at least big enough to pay for that minimum real retirement lifestyle. (Remember to convert the age 70 payout figure to current dollars, of course. If you want to add even more dollars to RA to start payouts earlier than age 70, you can, but this is an "at least" construction.)

You may or may not actually choose the Escalating Plan when the time comes. If you're in genuinely poor health at that time, you shouldn't. But the Escalating Plan is prepackaged with a 2%/year inflation assumption, and that's the best available for these purposes. Obviously we know 0%/year inflation is not the right model assumption.