Retire at 42. Possible?

[pai000000]

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

Thank you!
Currently my passive income exceed my spending slightly, but passive income tends to fluctuate because I adjust my stock holdings based on the market level.

I have an integrated shield plan, but the increase in premium is making me uncomfortable. If premium continues to increase at current rate, I foresee downgrading to B1 plan by 60 years old, or even just relying just on medisafe life if it gets worse.

 

[highsulphur]

So envious of TS....

 

[pai000000]

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

It is entirely possible that I will need to spend down my principal, as BBCWatcher has pointed out.

I tried running some simulations based on past STI performance, using different starting years for retirement.
The worst case is if I retire in the year 1994. Assuming 50:50 cash stock allocation, steady 3% inflation rate and current rate of growth of insurance premium, I will run out of money at around 84 years old. (Average pok gai age is about 92). Of course in this type of bad scenario, I will make lifestyle adjustments or downgrade to compensate.

So I may not have much to pass on.
Assuming I die early, I am currently fine with the intestate succession act rules of distribution.
If in future I marry or get involved in some cause, then I need to write will.

 

[laksa2003]

U will not run out of money at 84
Cpf life is there

It is entirely possible that I will need to spend down my principal, as BBCWatcher has pointed out.

I tried running some simulations based on past STI performance, using different starting years for retirement.
The worst case is if I retire in the year 1994. Assuming 50:50 cash stock allocation, steady 3% inflation rate and current rate of growth of insurance premium, I will run out of money at around 84 years old. (Average pok gai age is about 92). Of course in this type of bad scenario, I will make lifestyle adjustments or downgrade to compensate.

So I may not have much to pass on.
Assuming I die early, I am currently fine with the intestate succession act rules of distribution.
If in future I marry or get involved in some cause, then I need to write will.

 

[pai000000]

U will not run out of money at 84
Cpf life is there

I actually took CPF life into account already.
Maybe "run of out money" is not correct phrase.
I should say age 84 is the first year I reach negative networth, not counting residential property. (Assuming worst case scenario of starting retirement in 1994)

 

[highsulphur]

I actually took CPF life into account already.
Maybe "run of out money" is not correct phrase.
I should say age 84 is the first year I reach negative networth, not counting residential property. (Assuming worst case scenario of starting retirement in 1994)

Negative cash flow you mean? Negative net worth means you are bankrupt no?

 

[pai000000]

Negative cash flow you mean? Negative net worth means you are bankrupt no?

Its negative liquid assets.
Negative cashflow should start much earlier if I maintain current spending at 3% inflation every year.

The simulation assumes I do nothing to change my circumstances, but in reality I will likely cut expenditure and downgrade to a smaller HDB to avoid going insolvent.

 

[highsulphur]

Its negative liquid assets.
Negative cashflow should start much earlier if I maintain current spending at 3% inflation every year.

The simulation assumes I do nothing to change my circumstances, but in reality I will likely cut expenditure and downgrade to a smaller HDB to avoid going insolvent.

How do you define negative liquid assets and how does it affect you?

 

[pai000000]

How do you define negative liquid assets and how does it affect you?

Basically running out of cash and having no more bonds and stocks to sell.
It would mean having to sell my house and buying a cheaper one, or renting.
Of course its best to do so before running out of money.

 

[highsulphur]

Basically running out of cash and having no more bonds and stocks to sell.
It would mean having to sell my house and buying a cheaper one, or renting.
Of course its best to do so before running out of money.

Right. You mean your remaining asset is the roof over your head.

For most people, the biggest unknown expenses for planning for retirement are kids expenses (mostly education in particular tertiary) and medical expenses. You are already relieved of 50% of those unknown factors..

But with the recently jump in medishield premium, I don't think most of us can be confident in saying we are fully prepared to pay whatever premiums in 20-30 years.

 

[FuNKySoULyBrO]

Btw, TS, r u a single child? Coz if so, more so u can FIRE liaoz.

For parttime stuff, u can do part-time grab/go-jek lor. Drive as and when u wish, and if drop-off customers in some interesting or never been before place, can just chill and lepak around.

 

[highsulphur]

Btw, TS, r u a single child? Coz if so, more so u can FIRE liaoz.

For parttime stuff, u can do part-time grab/go-jek lor. Drive as and when u wish, and if drop-off customers in some interesting or never been before place, can just chill and lepak around.

I'm not sure how long I can lepak without going nuts even though if I can afford too. Unless my wealth is to the point I can't finish spending my passive income, then the possibilities are almost limitless.

 

[Mecisteus]

I'm not sure how long I can lepak without going nuts even though if I can afford too. Unless my wealth is to the point I can't finish spending my passive income, then the possibilities are almost limitless.

At the countryside, there are more things to do and "lepak".

 

[havetheveryfun]

I'm not sure how long I can lepak without going nuts even though if I can afford too. Unless my wealth is to the point I can't finish spending my passive income, then the possibilities are almost limitless.

really dont know why people keep saying there is nothing much to do if they really retire at a young age. There are so many things you can do, and they don't cost a bomb either.

For instance, if you enjoy eating fishball noodles or any other kind of food, you could also do the same like what this fishball company did : https://mothership.sg/2019/01/fishball-noodles-in-singapore/

 

[highsulphur]

really dont know why people keep saying there is nothing much to do if they really retire at a young age. There are so many things you can do, and they don't cost a bomb either.

For instance, if you enjoy eating fishball noodles or any other kind of food, you could also do the same like what this fishball company did :https://mothership.sg/2019/01/fishba...-in-singapore/

How is that better than working?

 

[Mecisteus]

really dont know why people keep saying there is nothing much to do if they really retire at a young age. There are so many things you can do, and they don't cost a bomb either.

For instance, if you enjoy eating fishball noodles or any other kind of food, you could also do the same like what this fishball company did : https://mothership.sg/2019/01/fishball-noodles-in-singapore/

So after trying all the fishball noodles, next try all the chicken rice in Singapore?

 

[maple96]

Thank you!
Currently my passive income exceed my spending slightly, but passive income tends to fluctuate because I adjust my stock holdings based on the market level.

I have an integrated shield plan, but the increase in premium is making me uncomfortable. If premium continues to increase at current rate, I foresee downgrading to B1 plan by 60 years old, or even just relying just on medisafe life if it gets worse.

That's why I never like having equity/bonds as the golden goose, it cannot continue to lay the golden eggs or “depreciate/fluctuate” when market turn against u or u make a drawdown. No, it is not part of my passive income stream. I have a steady passive income stream which only increases or stay constant if I make a withdrawal. Continue to build other passive income streams during retirement.

I only have ntuc enhanced incomeshield B with full rider, max CPF medisave to earn interest to pay for the premiums, also plan to downgrade to Assist rider if premium escalates, then down to medishield life with higher govt subsidies when I qualify but still have max CPF MA to pay for the medical.

 

[limster]

I have a steady passive income stream which only increases or stay constant if I make a withdrawal.

Most of us don't have passive income stream that can only increase and never go down. Thats why we are forced to buy stocks and bonds! Please don't look down on us

 

[glenlaw]

interested in trading forex with automated copying of signal providers?

 

[Toni90]

That's why I never like having equity/bonds as the golden goose, it cannot continue to lay the golden eggs or “depreciate/fluctuate” when market turn against u or u make a drawdown. No, it is not part of my passive income stream. I have a steady passive income stream which only increases or stay constant if I make a withdrawal. Continue to build other passive income streams during retirement.

I only have ntuc enhanced incomeshield B with full rider, max CPF medisave to earn interest to pay for the premiums, also plan to downgrade to Assist rider if premium escalates, then down to medishield life with higher govt subsidies when I qualify but still have max CPF MA to pay for the medical.

What kind of passive income you have?