Target networth

[revhappy]

That’s true. However, if you have a fixed monthly salary of at least $12,000/month, you could apply for a Personalised Employment Pass. You’re allowed a maximum of one PEP per lifetime, and a PEP is good for 3 years. At the end of the PEP you have three options: (a) drop down to a EP, (b) rise up to PR, or (c) leave Singapore.

PEP holders are effectively self-sponsored EP holders, and a PEP holder can stay in Singapore for up to 6 months after cessation of employment. (Although a bout of unemployment that long would likely trigger an eventual early loss of your PEP, with the three options listed above.) PEP holders can also sponsor dependents for DPs.

It’s a quirky immigration status that’s somewhere in between an EP and PR. In practice, if you meet the income qualification (which could change, although probably not for people holding PEPs), you could try to apply for a PEP if your current employment seems wobbly. You have to be in employment to apply and to pick up your PEP, though, so it cannot be too wobbly. But if your goal is to stay in Singapore for at least another 5 to 7 years, you want to be a little careful about when you apply.

I think you have up to 6 months to pick up a PEP after approval, so you can stretch the total anti-wobble protection out to roughly 3 years and 7 months, figuring 1 month for the application decision, 6 months before you pick up the PEP, then 3 years once you do pick it up.

If you’re successfully on a PEP then I suppose you could attempt one more PR application, at about month 20 of your PEP. Maybe the PEP counts for a tenth of a point or whatever. Who knows.

If you’re not at $12K/month or above then please ignore all the above, at least for now.

Thanks, but no, not in the PEP range. More like 8k per month. I have already used up the PEP btw, back in 2013 and before, people on EP P2 pass(about 3.5K salary) and who have completed 2 years in SG, could apply for PEP and it used to be for 5 years. I got laid off from Credit Suisse in 2014 and had applied for PEP in 2013. I had almost given up on Singapore and decided to go back to India, but luckily found another job here and I am still here, miraculously.

 

[revhappy]

That’s not quite what happened or is being forecast.

There are many possible scenarios, but as one example if you start with $800,000, save $2,800/month, and achieve 7%/year total returns (compounded annually in this example, and net of all costs), then after 7 years you’d end up with just over $1.6 million. $2,800/month for 7 years is $235,200.

Is this scenario possible? Sure, possible. Likely, maybe not, but possible. A higher monthly savings figure would be helpful, of course.

There is a major challenge here. If you’re trying to assure retirement from age 45, which is somewhere around 5 to 7 years from now, that’s well within the recommended adjustment period when a portfolio should be in the process of adjusting from an aggressive accumulation posture to a more conservative drawdown posture. But a progressively more conservative portfolio tends to reduce yields — and volatility, which is why you do it. I assume Revhappy is hoping he would be able to retire at age 45, but he’s not banking on that happening. In other words, he’s going to stay in an accumulation-oriented investment posture and see what happens.

My portfolio was always fixed income heavy. Recently I have ramped up my equity allocation, but even now, it is 45%. 55% is still fixed income. So there isnt much adjustment to do.

 

[BBCWatcher]

I got laid off from Credit Suisse in 2014 and had applied for PEP in 2013. I had almost given up on Singapore and decided to go back to India, but luckily found another job here and I am still here, miraculously.

Well then you already experienced the “wobble” and one-time PEP “shield,” so well done!

 

[ocs_woodlands]

Yes, I have been here since 2009 mid, so in about 9 years I saved that amount. My salary has been pretty stagnant at 100k since 2012. Before that about 80K. I have been saving about 50% of my salary and investing mostly in fixed income in India and party into equities, not a lot. So it has compounding and aggressive savings. My wife hasnt been working. We have rented full HDB throughout for around 1.8 to 2.4K max, we never rented out rooms. So rent has been our biggest cost. Other than that we are quite frugal. Now my daughter is going in a private school as we didnt even get a local school for our daughter so schooling costs about 1K a month.

Just the 2 fixed cost items alone is about 35k pa. If you save 50k, that leaves 15k for the other expenses.

I applaud you for your saving rate. Well done.
Many Singaporeans can't do that (me included)...

 

[Sinkie]

Just the 2 fixed cost items alone is about 35k pa. If you save 50k, that leaves 15k for the other expenses.

I applaud you for your saving rate. Well done.
Many Singaporeans can't do that (me included)...

That’s about $50,000 saving each year

Good job revhappy, but if you are singaporean or pr, that will be around $30,000 cash and $20,000 cpf ba

 

[Mephist0pheLes]

That’s about $50,000 saving each year

Good job revhappy, but if you are singaporean or pr, that will be around $30,000 cash and $20,000 cpf ba

30k cash 37k cpf

 

[Sinkie]

30k cash 37k cpf

I thought there is $6000 cap for cpf employer and cpf contribution from employer are additional from his cash saving?

 

[homer123]

Thot I read somewhere that one can retire like a king in India with 500K?

I did some calculations, my current networth of 800k SGD needs to about double to 1.6M SGD for me to retire comfortably in India. I am estimating it will take me another 5 to 7 years to achieve this level. By then I will be 45 years old. That should be perfect time to retire.

Sent from Dont Take Any Of My Statment As Investment Advice. Do Your Own Due Diligence. using GAGT

 

[revhappy]

Thot I read somewhere that one can retire like a king in India with 500K?

India is cheap, you can expect a good lifestyle with 2k SGD per month. But inflation can go up to 8%. So you need to account for that. 500k is not enough to last 50 years. 1M will probably be enough. I am targeting 1.5 to 2M just to be safe.

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[NewInvestor]

When people starts a topic like "What is your target net worth", "what is your current networth", or anything remotely linked to the word "net worth", you bring out all the big cannon fairies and egomaniacs to participate.

Worth a spectacle the first time you read the posts, but that's about it.

Not many here have declared their targetted net worth. For those who have, their targets are not particularly ambitous. So, not up to EDMW standard so far lol.

 

[BBCWatcher]

India is cheap, you can expect a good lifestyle with 2k SGD per month. But inflation can go up to 8%. So you need to account for that. 500k is not enough to last 50 years. 1M will probably be enough....

There’s also some significant nation-level risk involved, so I’d advise keeping one financial foot outside India (and globally diversified, in a drawdown investment posture). I suppose it’s possible the rupee could spend the next 20+ years appreciating against the rest of the world’s currencies, but that doesn’t seem very likely right now, does it?

International retirement planning is a bit tricky in certain respects since the destination country matters a great deal. As an example, I have no idea whether India has a viable, reliable life annuity provider that can sell a policy with real rupee denominated payouts. But if the New York Life of India (as it were) doesn’t exist, then that’s one fewer important financial tool available in the retirement toolbag.

 

[revhappy]

There’s also some significant nation-level risk involved, so I’d advise keeping one financial foot outside India (and globally diversified, in a drawdown investment posture). I suppose it’s possible the rupee could spend the next 20+ years appreciating against the rest of the world’s currencies, but that doesn’t seem very likely right now, does it?

International retirement planning is a bit tricky in certain respects since the destination country matters a great deal. As an example, I have no idea whether India has a viable, reliable life annuity provider that can sell a policy with real rupee denominated payouts. But if the New York Life of India (as it were) doesn’t exist, then that’s one fewer important financial tool available in the retirement toolbag.

Yes, the rupee is a depreciating currency. It higher interest rates make up for lost value due to depreciation, but not much value appreciation, unless you invest in Indian equities. That is also risky, but it is a reasonable bet that a country growing at 8% GDP and a huge middle-class market, the stock markets should do reasonably well, if not outperform global markets. But I agree with international diversification. I have currently 35% if my networth outside India.

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[BBCWatcher]

I have currently 35% if my networth outside India.

That’s too Indian for my tastes if I were retiring in India, but I hope you’re right and I’m wrong.

 

[homer123]

You worry too much.. If you have 800K and can generate 5% return, you already have 40K pa.. which is much better than 2k pm required to live comfortably and your principal won't run out unless u bet on 1 stock and lose everything

India is cheap, you can expect a good lifestyle with 2k SGD per month. But inflation can go up to 8%. So you need to account for that. 500k is not enough to last 50 years. 1M will probably be enough. I am targeting 1.5 to 2M just to be safe.

Sent from Dont Take Any Of My Statment As Investment Advice. Do Your Own Due Diligence. using GAGT

 

[BBCWatcher]

You worry too much.. If you have 800K and can generate 5% return, you already have 40K pa.. which is much better than 2k pm required to live comfortably and your principal won't run out unless u bet on 1 stock and lose everything

Homer123, your math just doesn’t work once you even begin to think about the reality of inflation. I’m afraid it’s not that simple, and it seems Revhappy understands that inflation needs to be factored in.

 

[ocs_woodlands]

Not many here have declared their targetted net worth. For those who have, their targets are not particularly ambitous. So, not up to EDMW standard so far lol.

Yup... thats why we need to keep out the kids from EDMW and not let the sewage there seep into other forum....

 

[Toni90]

I thought there is $6000 cap for cpf employer and cpf contribution from employer are additional from his cash saving?

U forgot the bonus.

 

[Toni90]

Homer123, your math just doesn’t work once you even begin to think about the reality of inflation. I’m afraid it’s not that simple, and it seems Revhappy understands that inflation needs to be factored in.

We can make an assumption that stock will take care of inflation.

 

[BBCWatcher]

We can make an assumption that stock will take care of inflation.

No, not with a risk appropriate, drawdown-oriented portfolio with a circa 30:70 stocks:bonds split. (And have you checked out the extra volatility in Indian stocks lately?)

I'll repeat something I've said before. If you want to sanity check whether you enough for retirement, then simply get a quotation on a single premium, immediate, escalating, joint life annuity pegged to the consumer inflation rate, from the highest credit quality insurer you can find, in your chosen retirement currency zone, and with your desired level of retirement income for your desired lifestyle. If the premium is more than you have saved, then you're not ready.

 

[Toni90]

No, not with a risk appropriate, drawdown-oriented portfolio with a circa 30:70 stocks:bonds split. (And have you checked out the extra volatility in Indian stocks lately?)

I'll repeat something I've said before. If you want to sanity check whether you enough for retirement, then simply get a quotation on a single premium, immediate, escalating, joint life annuity pegged to the consumer inflation rate, from the highest credit quality insurer you can find, in your chosen retirement currency zone, and with your desired level of retirement income for your desired lifestyle. If the premium is more than you have saved, then you're not ready.

Sure or not? You can retire early this way?. Who sell u this kind of product for people Retiring at 40-45? Can trust them?