Retire at 42. Possible?

[henrylbh]

After retirement, I have thoughts of purchasing a 2-room flexi BTO and selling it for a profit.
That would leave me with one more chance to buy a BTO, in case I need it.

As a single, you have only one chance to buy a BTO directly from HDB or a resale flat with grant.

 

[eric3743]

I am open to that, if I can find a part time job that suits my interest, and does not pay peanuts.

Its not easy to find, so I just leave it out of my calculations for the time being.

How about discuss this with your current employer on your intention and to see if they could have alternative for you.

Alternately and depend on your work qualification & experience you could go for consultant or freelancer to see how things work out.

At least this would give you some space for exploration on your own as you have mentioned, example travelling or even upgrading or what you intend for your future.

Regard to BTO have you consider to purchase resale instead.
For going toward BTO you should consider after considering your final goal in sorting your life on which direction you are heading, pondering on these matters closely.
This BTO would be better to consider at the last resort and not just take first and wait for 2nd chance as gov may made changes along the way which would stiff your future chances, if any.

 

[Mecisteus]

Good question. That's something I need to discover gradually.
But one thing for sure, I don't want to spend it in a cubicle.. haha

If I am single like you, I would go to some neighboring countries and chill at the country side.

 

[ocs_woodlands]

so long as single, it's possible to retire at 42.

Married with kids- well so far only ONE person in HWZ forum claims to have done so in early 40s.

There is another lady that has been bleating about semi retirement for past 5/6 years but it's not gonna happen. For married people with kids, it's more dependent on age of kids.

 

[crimsontactics]

so long as single, it's possible to retire at 42.

Married with kids- well so far only ONE person in HWZ forum claims to have done so in early 40s.

There is another lady that has been bleating about semi retirement for past 5/6 years but it's not gonna happen. For married people with kids, it's more dependent on age of kids.

Got money, anything is possible...

Sent from . using GAGT

 

[limster]

so long as single, it's possible to retire at 42.

Married with kids- well so far only ONE person in HWZ forum claims to have done so in early 40s.

There is another lady that has been bleating about semi retirement for past 5/6 years but it's not gonna happen. For married people with kids, it's more dependent on age of kids.

Blogger FFF just announced his 'mini-retirement' in his early 30s?

He only has 6 counters in his investment portfolio... i guess because diversification reduces your returns?

 

[mummy1234]

so long as single, it's possible to retire at 42.

Married with kids- well so far only ONE person in HWZ forum claims to have done so in early 40s.

There is another lady that has been bleating about semi retirement for past 5/6 years but it's not gonna happen. For married people with kids, it's more dependent on age of kids.

I am kinda semiretired in Sg the last 2 years, working only about 20 hrs a week last year and also this year. Don't need to do it in Malaysia, can do it in Sg since hubby has a job and we r able to be debt free.

 

[SKenny]

I also retired in my 40's although it was several years later than TS.

My personal life is completely different. I am married with 3 young children when I retired. It had been almost 10 years now and my youngest one just entered Sec 1! The biggest factor for me was the cost of upbringing the 3 children which TS doesn't have.

On the financial side, TS looks good to go. However I am unsure if TS living budget is robust. Most people I spoke with tends to underestimate their living expenses due to overlooking many "one off", eg replacement of major appliances, wedding angpow, medical care etc. I suggest that you keep track of your expenses for a few years and include all the one off expenses. You have then make some adjustments due the the different lifestyle post retirement.

Good luck.

 

[Geeezz]

I am open to that, if I can find a part time job that suits my interest, and does not pay peanuts.

Its not easy to find, so I just leave it out of my calculations for the time being.

i find this very contradicting, why would the pay be a factor since you are “retired”. shouldn’t the int in the job be a bigger factor?

and ts congrats to having sufficient to retire but i would say try to get other source of income before u consider retiring. basically we won’t know how the cost of living will be like 20-30 yrs down the rd. and not having enough money to last then will be the biggest headache ever

 

[pai000000]

Its good to have so many wise people to "peer review" my plans. Appreciate all the concerns!
Allow me to summarize all my replies in one post.

Thank you for tell me that singles can only buy BTO one time. I didn't know that.
If so, I agree its better not to rush to buy and sell just to earn a small profit.
Indeed, it is better to keep this chance in reserve. At worst, if I run out of money, I can downgrade to a 30-year 2 room and free up some capital.

Regarding semi employment at my current employer, they do have such a scheme, but its only for unavoidable circumstances, and for limited time only.
I guess if I jump through some hoops, I can get part-time for one year, but after that need to revert back to full time.
Also, I don't enjoy my work at my current employer much. Part-time also impose some limits on my travel plans.
I am open to doing project-based contract work for my company post-retirement, but I will not bank on them giving me business, because they have a tendency of preferring to keep things in house.

I cannot rule out that in future I may change my mind and go back to work, or even get married with children.
My thinking 20 years ago was very different, and perhaps 20 years from now, my future self will have very different ideas.
What I do know is that right now I want to retire, and I will try to plan it so that I don't run out of money even if I stay retired throughout.
If like you say I get bored in future and decide to go back to work, that's fine.
Or I find the perfect partner for whom I am willing to sacrifice my freedom and go back to work, that's OK too.
But I don't plan to hold my breath (stay employed) just on the off-chance that I may find someone in future.

I calculated my expenses before and after retirement, and coincidentally, it is about the same.
After retirement, I save on taxes, some travelling and food expenses, but that is offset by more leisure expenses.
I agree about the need to be careful of one-time expenses.
I already build that into my estimate, but I cannot rule out that I might have miss out some items. Indeed some buffer will be wise.

Regarding why I would be bothered about low pay after retirement, I guess that's just my personal character.
I dislike the thought of being paid less just because I am retired. I feel a person should be paid based on ability.
If I find a worthy cause that I feel strongly about, I can consider low or no pay.
But so far haven't found such a cause.

 

[Oldnerd79]

Based on information given, your total net worth is 1.37million. that's quite good for someone your age and being single with no commitments you definitely can retire early. However, you did not indicate how much returns you are getting from your investments in equities and bonds. And how much you will need to draw down from your 1.37mio every year to meet your 2k per month expenses. You should invest some of your 400k cash in higher yield investment products, maybe some ETFs? Maybe 60% equities and 40% bonds? Your allocation in cash/FD/bonds are too high now in my opinion.

If I were you, I would buy a HDB near parents flat and rent out 2 bedrooms. Lock one room for yourself n you can stay there occasionally since you can't fully rent out during 5 year MOP. The rental income will be more than sufficient to pay for mortgages n you will still have a little leftover to help cover some expenses. Keep doing this until your parents pass on, you will need to dispose of one of the flats since you can only keep one HDB.

 

[maple96]

FIRE! Are u ready?

To me, the most important is to have "the golden goose that lay the golden eggs". I am referring to passive income. Once fully retired, you will be living on your assets. Your assets have to generate the income for u, such that u dun need to withdraw your capital or minimal capital withdrawal to maintain your "desired standard" of living until death (adjusted as u age).

As CPF article suggest, u have to cover retirement, housing and healthcare needs. U covered retirement somewhat and housing, what about healthcare? U dun want your healthcare needs to eat away your assets!

What are the possible sources of passive income u have now?
1. Mthly interest from high interest savings account
2. CPF interests which is accumulated till 55 and after
3. Whole life insurance: my WL "pays" 4-5% pa but accumuated until I surrender
4. Interest/dividends from your equity/bond investments (but risk of capital loss?)
5 . Any others u can think of?

U can save on your expenses eg with credit card rebates, NTUC fairprice discounts/vouchers, etc U can think yourself.

If my passive income adds up and can cover the bulk of your expenses, I have not worries. I will continue to build on the passive income streams while enjoying retirement life, do what I like and cannot do while I was working hard to build my wealth.

Just my 2 cents. Good luck to u

 

[BBCWatcher]

You should invest some of your 400k cash in higher yield investment products, maybe some ETFs? Maybe 60% equities and 40% bonds? Your allocation in cash/FD/bonds are too high now in my opinion.

That might be OK, but in the very next paragraph you recommend purchasing a second, bigger property (a resale HDB, which is a leasehold with 94 years or less remaining). That’s a stock-like asset.

If I were you, I would buy a HDB near parents flat and rent out 2 bedrooms. Lock one room for yourself n you can stay there occasionally since you can't fully rent out during 5 year MOP. The rental income will be more than sufficient to pay for mortgages n you will still have a little leftover to help cover some expenses. Keep doing this until your parents pass on, you will need to dispose of one of the flats since you can only keep one HDB.

I don’t like this idea if the BTO 2 room is an available option, which it would be with an income adjustment. The BTO is the better deal (99 year lease, biggest percentage gap between buying and potential resale prices), and between the current large unit and this smaller unit all self housing needs would be covered. The BTO 2 room would also allow some more room to adjust and diversify the portfolio allocation if desired/merited.

In short, the government’s BTO offer is still a good offer, sometimes very good. I’d lean into that particular deal first, if possible. In this case a “tactical” income adjustment would be needed to qualify. If that income adjustment is reasonable in the circumstances, I think I’d do it.

 

[BBCWatcher]

As CPF article suggest, u have to cover retirement, housing and healthcare needs. U covered retirement somewhat and housing, what about healthcare? U dun want your healthcare needs to eat away your assets!

I think we’re all assuming a well stocked MediSave Account (we have reasonable evidence of that from an earlier post) and reasonable hospitalization insurance (a public hospital Integrated Shield plan, care needs from the public system). Fair point.

What are the possible sources of passive income u have now?
1. Mthly interest from high interest savings account
2. CPF interests which is accumulated till 55 and after
3. Whole life insurance: my WL "pays" 4-5% pa but accumuated until I surrender
4. Interest/dividends from your equity/bond investments (but risk of capital loss?)
5 . Any others u can think of?

It doesn’t really work this way in terms of financial planning, not by itself. It’d be lovely and simple if we could just look at our current spending needs, tally up current passive income streams, and if the latter equals or exceeds the former, we’re good. There are at least two problems with that way of thinking, especially when there are many decades to run:

1. Inflation, which is a variable;
2. Passive income yields, also a variable.

Japanese retirees got really whacked (and still are) with point #2. That could happen in Singapore dollars! There’s no universal constant that SSBs must yield about 2% nominal with inflation anchored at about 1.5%, for example.

Anyway, you are going to dip into principal, or at least you must plan for it. (Well, at this level of wealth and from an age 42 retirement, anyway.) And there’s nothing wrong with that per se. A naive financial model isn’t going to work, though.

 

[maple96]

I think we’re all assuming a well stocked MediSave Account (we have reasonable evidence of that from an earlier post) and reasonable hospitalization insurance (a public hospital Integrated Shield plan, care needs from the public system). Fair point.


It doesn’t really work this way in terms of financial planning, not by itself. It’d be lovely and simple if we could just look at our current spending needs, tally up current passive income streams, and if the latter equals or exceeds the former, we’re good. There are at least two problems with that way of thinking, especially when there are many decades to run:

1. Inflation, which is a variable;
2. Passive income yields, also a variable.

Japanese retirees got really whacked (and still are) with point #2. That could happen in Singapore dollars! There’s no universal constant that SSBs must yield about 2% nominal with inflation anchored at about 1.5%, for example.

Anyway, you are going to dip into principal, or at least you must plan for it. (Well, at this level of wealth and from an age 42 retirement, anyway.) And there’s nothing wrong with that per se. A naive financial model isn’t going to work, though.

U are obviously naive in your thinking and judgement of what I had written, plus your bad reading and comprehension skills, plus bad judgement of TS.

TS is obviously a smart and financially savvy guy, but u choose to insult him?

What I offered are additional considerations which none of u had mentioned (I dun like to repeat), not a complete financial planning model (which is my secret retirement planning tool).

Of course he has to make sure his passive income can more than cover inflation and not subject to “depreciation”. U have been preaching on investing in other threads, arent those “income” from investing supposed to help fight inflation, but those can “depreciate”?

U cannot read the list of passive income streams, which I also highlight risk of capital loss? My interest/dividends are at least 4%, not at risk of depreciation, even one at 6% minimum. I dun have to insult TS by writing what u write.

Didn't I said “continue to build your passive income”?

Be constructive in your criticism, offer alternative solutions?

 

[BBCWatcher]

I’ll leave it to the readers to decide who’s being insulting.

 

[henrylbh]

With the assets that TS has, and if he chose to remain single his whole life, he can easily afford to spend $3,000 a month to about 100yo with immediate effect without any working income, assuming his assets yield just 2% all the way. Based on what he said, it's unlikely he will spend 3k pm in earlier years, and hence can afford more in later years.

The concern is whether $3000 per month is enough say 20 or 40 years later, assuming he has reasonable medical coverage. But with what he has, it should still be comfortable as 3k per month will not wipe out his entire assets. At worst comes to old age and fragile, sell off or lease his flat and move to an old age home till time's up.

If he gets hooked later, it would depend on the wife's financial position as well as whether they want and can have children.

 

[laksa2003]

Ts, do you intend to leave your assets to someone when you die or just donate off if single till die.
By your current passive income, u can retire now and draw $3k monthly without touching your capital.
If no need to leave asset for someone..u can even withdraw more monthly n spend everything till u die. This will give you even more luxury life on retirement.
Just work out the sums to 100 years old and you will be fine

 

[Toni90]

Hi

Would like to hear some opinions on my retirement adequacy.

I am male, 42 years old, single living with parents, with no intentions of getting married.
I hope to retire in a few months time.

My assets are as follows:
- About 400k in cash, fixed deposits, Singapore saving bonds
- About 50k in bonds, (astrea iv 4.35, nikko corporate bond etf etc)
- About 480k in SG and HK equities, diversified across 20+ companies
- Whole life insurance with surrender value of about 40k
- CPF OA and SA total of about 400k

I have no debts, and no property. I plan to live in my parent's property permanently. The lease is sufficient to cover my lifespan.
After retirement, I have thoughts of purchasing a 2-room flexi BTO and selling it for a profit.
That would leave me with one more chance to buy a BTO, in case I need it.

My monthly expenditure are as follows:
- 1k: Home contribution
- 1k: Personal expenses. Reducible to 600 if I live like a hermit
- 600: Travels. (First item to be cut in hard times)
----
Total: 2.6k in good times, 2k in bad times, 1.6k in very bad times

I do not plan to work after retirement.
If forced by circumstances to do so, I will try to find some translation job for about 2-3k per month.

Just retire pls. More than enough already.

 

[pai000000]

Based on information given, your total net worth is 1.37million. that's quite good for someone your age and being single with no commitments you definitely can retire early. However, you did not indicate how much returns you are getting from your investments in equities and bonds. And how much you will need to draw down from your 1.37mio every year to meet your 2k per month expenses. You should invest some of your 400k cash in higher yield investment products, maybe some ETFs? Maybe 60% equities and 40% bonds? Your allocation in cash/FD/bonds are too high now in my opinion.

If I were you, I would buy a HDB near parents flat and rent out 2 bedrooms. Lock one room for yourself n you can stay there occasionally since you can't fully rent out during 5 year MOP. The rental income will be more than sufficient to pay for mortgages n you will still have a little leftover to help cover some expenses. Keep doing this until your parents pass on, you will need to dispose of one of the flats since you can only keep one HDB.

My IRR for the past 5 years is about 8-9%, but I attribute it more to luck than skills. Going forward, I will be happy with 5+%.
I am trying to aim for 50/50 equity to cash/bond ratio, just as a matter of personal preference so that I can buy when prices get lower.

Your idea about the HDB makes a lot of sense, and is a good backup plan. But saying that, I prefer the relative the hassle-free nature of stocks versus having to manage tenants/agents.