Retirement planning

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mummy1234

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How do u people go about yr retirement planning? Esp people with kids the sandwich generation?
 
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JuniorLion

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Is this another me, myself, my useless husband, my FH landed and my Johor property thread?
 
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ocs_woodlands

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mummy1234 said:
How do u people go about yr retirement planning? Esp people with kids the sandwich generation?
Click to expand...

Part 1
perhaps I am kind but I shall try to answer you earnestly (sorry for hard truths)...

Retirement planning is basically just numbers. avoid fantasies. There are 3 numbers that you have to get as accurate as possible in order to do it right.

1st number
retirement expenses in today's dollars.
This one you will only know if you have tracked your expenditure for years. I have tracked mine for >10 years. Remove from.your current expenditure any work related expenditures eg income tax and decide if you want maid or car.

2nd number
How many years of living in retirement?
In order not to mess things up we are talking about complete retirement ie NOT the fantasy version of work part time and etc.

To do this well one needs to have a good estimate of longevity. While we will never know whether we will die tomorrow (that's actually good from the pov of retirement planning). one can at pretty good estimates from one's parents longevity. Are they below or above their cohort average? Then go look at your cohort's longevity table. if your parents are above, plan for above. if your parents are below, plan for average.

Then see when you want to retire.
Take one minus the other, you get years in retirement.

set up your excel table. look at Singstat inflation rate for past however many years you want. increase your annual retirement expenses by inflation rate + kiasu factor (what kiasu factor you want is again yo to you. Some people put 1% some put 2%....).

3rd number
Realistic NOT naive rate of return of the assets that will generate your retirement income. Eg CPF SA & MA will generate 4%. OA will generate 2.5% (forget about that up to c.rap cos that only adds $900 per ANNUM. Eg rental - look at the historical HDB yield and pte property rates.
 
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ocs_woodlands

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Part 2
The annual rate of return of your assets + 2% or 3% or 4% drawdown (dependent on how conservative you are) of your capital must be >= to the retirement expenses for EVERY year of the retirement.

Once.you have churned these numbers, you will know the palatable or unpalatable hard truths of when you can retire.

QED
 
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JuniorLion

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Anytime now.

The thread is going to degenerate into yet another property/useless hubby/JB property discussion, and that yyhwin is gonna join in.

Watch.
 
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Mummy1234, how much expenditure per month do you and your husband plan for post retirement?
 
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mummy1234

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My hubby wants me to sell our house to invest in business. It is his dream to do business. I am so tired being a girl, father say be dr, I be dr, now after married, have to be good wife and support hubby...sigh, it's tiring really.
 
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