Full retirement sum trend

[SBC]

You are over exposed on real estates. So what activities are you trying to cut down?

Tot so too. 2 probable events that could turn the tides against you
- high interest like 4-5% range
- any black swan event.

Of course, not hoping that it will happen. I am also vested in property and stock.

But need to keep mortgage managable.

 

[BBCWatcher]

Tot so too. 2 probable events that could turn the tides against you
- high interest like 4-5% range
- any black swan event.

There's a third:

- continuation of present local real estate trends

Even this status quo is not helpful in terms of building sustainable wealth via local real estate. I do not recommend betting against this government and its policies, at least not heavily.

A well diversified stock portfolio has usually done rather well in moderate nominal interest rate environments. Nominal mortgage interest rates of 4 to 5% would still be quite moderate (not high). They'd imply approximately 3% inflation, also quite moderate.

 

[OngHuatHuat]

Yeah you are right. I am holding 3 landeds in malaysia and 2 private condos in Singapore.
All very expensive relative to local earning power. Now I dunno what to do also.

Like my PJ landed is around 1.2 to 1.3 million ringgit now, if sell now, doubt there will be any takers.

You are over exposed on real estates. So what activities are you trying to cut down?

 

[OngHuatHuat]

No lah, I won’t pledge my properties d. At most if take FRS Lor

The Basic Retirement Sum (BRS) is "so much money"? It's $85,500 (2018 figure), pre-tax. That's a mere pittance given your tremendous wealth and income, surely.

....Of all the things to worry about, it's MOST odd to worry about whether ~S$800/month from age 65 for life will be too much. No, it really, really ain't.

 

[henrylbh]

Yeah you are right. I am holding 3 landeds in malaysia and 2 private condos in Singapore.
All very expensive relative to local earning power. Now I dunno what to do also.

Like my PJ landed is around 1.2 to 1.3 million ringgit now, if sell now, doubt there will be any takers.

Potong and marry 4 working ones for synergy.

 

[OngHuatHuat]

I cannot support 4 wives.

Potong and marry 4 working ones for synergy.

 

[OngHuatHuat]

Actually I am thinking of making a sustainable model now, but trump kind of disturb my plan.

Actually it was not the current FRS that I worried about, it is the future FRS, and I doubt the payout will be double if the FRS is doubled due to the fact that human life expectancy has been on the rise. With the advancement of medical technology, I won’t be surprised in next 30-40 years down the road, people live past 100 years old.

CPF life is good, but not ideal, it has its own inherent weakness too.

Yes, the bottom line is you're overextended with too high a debt load relative to your income and stage in life, and interest rates are rising. You need to fix that.

If you're genuinely worried about whether ~$800/month (2018 dollars, for example) of income from age 65 will be too much, then you've got a big problem, now.

 

[OngHuatHuat]

The only way for me to fulfill my dream and make mortgage manageable is to earn more money either from the market or off the market.

Tot so too. 2 probable events that could turn the tides against you
- high interest like 4-5% range
- any black swan event.

Of course, not hoping that it will happen. I am also vested in property and stock.

But need to keep mortgage managable.

 

[cscs3]

I cannot support 4 wives.

Think other way, 4 wives support you!

 

[OngHuatHuat]

Chinese pretty girls hard to chase.

Think other way, 4 wives support you!

 

[BBCWatcher]

No lah, I won’t pledge my properties d. At most if take FRS Lor

This doesn't make any sense to me either.

If you're concerned (for some strange reason) that you will have "too much" CPF LIFE annuity income from age 65 (or from age 70, or from anywhere in between), then you can reduce that income stream roughly 45% by making a property pledge. A property pledge doesn't mean the government takes your property. It's merely a pledge to yourself. And it's one property, singular. If/when you sell the property, you can shift the pledge to another one if you wish.

Actually it was not the current FRS that I worried about, it is the future FRS, and I doubt the payout will be double if the FRS is doubled due to the fact that human life expectancy has been on the rise. With the advancement of medical technology, I won’t be surprised in next 30-40 years down the road, people live past 100 years old.

Sure, that's possible. But unless that new medical technology has an "Illegal to use for the benefit of yyhwin" label affixed, you live longer, too, in actuarial/statistical terms. It's longevity insurance, and it will never be lavish, especially (but not only) at BRS level.

CPF life is good, but not ideal, it has its own inherent weakness too.

OK, and that's why 98.84% (or whatever) of your wealth at age 65 will not be CPF LIFE. Right? So what if that figure is 98.84% or 98.96%? Who cares? Is that what you're losing sleep over right now, seriously?

I don't get what's in your head right now.

 

[OngHuatHuat]

Actually you forget 55-65 years old.
After 65, cpf life payout starts.
In between?
That’s the part that we need to pay attention to. If they don’t raise the retirement sum as much, then we still can have quite a big chunk in cpf special or OA as back up cash or emergency funds.

Actually I wouldn’t think so much if the payout starts right after they create the retirement account, but if the payout starts right after they create the retirement account, then the payout won’t be as much for life. Pros and cons.

This doesn't make any sense to me either.

If you're concerned (for some strange reason) that you will have "too much" CPF LIFE annuity income from age 65 (or from age 70, or from anywhere in between), then you can reduce that income stream roughly 45% by making a property pledge. A property pledge doesn't mean the government takes your property. It's merely a pledge to yourself. And it's one property, singular. If/when you sell the property, you can shift the pledge to another one if you wish.


Sure, that's possible. But unless that new medical technology has an "Illegal to use for the benefit of yyhwin" label affixed, you live longer, too, in actuarial/statistical terms. It's longevity insurance, and it will never be lavish, especially (but not only) at BRS level.


OK, and that's why 98.84% (or whatever) of your wealth at age 65 will not be CPF LIFE. Right? So what if that figure is 98.84% or 98.96%? Who cares? Is that what you're losing sleep over right now, seriously?

I don't get what's in your head right now.

 

[OngHuatHuat]

I prefer to keep my property investment simple. Though I didn’t plan to sell any of my properties, but who knows there might be a time I have to
Sell them?

This doesn't make any sense to me either.

If you're concerned (for some strange reason) that you will have "too much" CPF LIFE annuity income from age 65 (or from age 70, or from anywhere in between), then you can reduce that income stream roughly 45% by making a property pledge. A property pledge doesn't mean the government takes your property. It's merely a pledge to yourself. And it's one property, singular. If/when you sell the property, you can shift the pledge to another one if you wish.


Sure, that's possible. But unless that new medical technology has an "Illegal to use for the benefit of yyhwin" label affixed, you live longer, too, in actuarial/statistical terms. It's longevity insurance, and it will never be lavish, especially (but not only) at BRS level.


OK, and that's why 98.84% (or whatever) of your wealth at age 65 will not be CPF LIFE. Right? So what if that figure is 98.84% or 98.96%? Who cares? Is that what you're losing sleep over right now, seriously?

I don't get what's in your head right now.

 

[BBCWatcher]

I prefer to keep my property investment simple.

No you don't. Your own behavior suggests otherwise. You'd be holding REITs or, better yet, a REIT fund, if you wanted simple property investing.

 

[OngHuatHuat]

Can you elaborate more on own behavior?

Reits very different from normal property investing, especially on the loan repayment and management fee part.

No you don't. Your own behavior suggests otherwise. You'd be holding REITs or, better yet, a REIT fund, if you wanted simple property investing.

 

[SBC]

Actually you forget 55-65 years old.
After 65, cpf life payout starts.
In between?
That’s the part that we need to pay attention to. If they don’t raise the retirement sum as much, then we still can have quite a big chunk in cpf special or OA as back up cash or emergency funds.

Actually I wouldn’t think so much if the payout starts right after they create the retirement account, but if the payout starts right after they create the retirement account, then the payout won’t be as much for life. Pros and cons.

The gap between 55 - 65 is rather crucial too.

I will intent to patch it via SRS. Will slowly draw SRS down during this period.

 

[BBCWatcher]

The gap between 55 - 65 is rather crucial too.
I will intent to patch it via SRS. Will slowly draw SRS down during this period.

Income from work also works, if you have sufficient faculties. Just saying.

 

[OngHuatHuat]

Problem with srs is that, you better pray hard that you don’t have a successful business after 55 years old.
If your earning power keep growing and you refuse to retire at 55, the tax rebate on withdrawal is no longer attractive coz you are at a much higher tax bracket.

The gap between 55 - 65 is rather crucial too.

I will intent to patch it via SRS. Will slowly draw SRS down during this period.

 

[SBC]

Problem with srs is that, you better pray hard that you don’t have a successful business after 55 years old.
If your earning power keep growing and you refuse to retire at 55, the tax rebate on withdrawal is no longer attractive coz you are at a much higher tax bracket.

That’s will be a happy problem. Haha.

Imagine the same 5% will be worth much less in many years to come. Take this as another consolation.

 

[BBCWatcher]

SRS withdrawal age is age 62 without penalty, and you really don't want to pay the penalty. The exceptions would be those who terminate Singapore status (citizenship or permanent residence), but then the tax treatment is less favorable.