How much do you need to retire in Singapore?

The $1 million dollar truth- why you need $1 million?

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According to the CPF Retirement Calculator, you need $1.14 million. We calculated this based on the assumming that the person is now 25, who plans to retire by 62 and will live till 83.  We take into account for a 3% inflation rate yearly.

It is common that the living cost in Singapore is getting more and more expensive.  A plate of chicken rice used to be $2, but now $3, and some places even reach $5. Due to inflation, what costs $100 today would cost $300 in 37 years later. That’s  3 times the original price!

In other words, at the retirement age, our money would be 3 times less than what it is worth today.

value investingImagine you are a 25-year-old fresh grad earning $2,500 a month. You use 10% ($250) of your income to save in the bank. When you are 62 (after 37 years), you will have $115,000 (based on bank interest: 0.05%).

Taking $115,000 and dividing it into 21 years (retiring at 62 and living until 83) would give you only $456 every month to spend on things. That also means you only have a current value of $150 to spend per month.

Imagine surviving with $150 a month today. How many of you can honestly say you can do it?

It is even tough for a secondary school student, what more an adult with a family?!

With this figure in mind, do you now know why everyone is saying just saving in the bank is not enough to retire in Singapore?

The Way To Retire In Singapore

What is this way? It is simply to invest. With investing, you would definitely get more than the 0.05% interest rate the bank gives you.

Imagine for a moment that you are again the 25-year-old fresh graduate earning $2,500 a month. This time, you set aside 10% of it, or $250, to invest.

investingWhen you are 62, how much would you have in your bank? As it turns out, you will have $1.2 million?! (interest rate: 10%). That’s a whopping 10 times more!

Taking $1.2 million and dividing it into 21 years (retiring at 62 and living until 83) would give you only $4,700 every month to spend on things. That also means you only have a current value of $1,500 to spend per month.

Can you imagine living with $1,500 a month? It’s not a luxurious lifestyle, but at least you would not need to work and can enjoy your retirement thoroughly.

Look at the difference between what investing and not investing has on your lifestyle after you retire. Which lifestyle do you prefer now?

Disclaimer: Investing will only give positive results if you know how, use the right method, enter at the right time, etc.

Not all apples on the tree are ripe

Though you have to invest, knowing how to invest correctly is key. There are many investment products out there. How to choose the right one to invest in? There are stocks, property, bonds, forex and many more. However, which is right for you?

  • Do you want to generate passive income (cash flow you receive even while you are sleeping)?
  • Do you not want to spend your whole day looking at your computer screen studying data?
  • Do you want to retire much earlier than 65?

You Shall Start Your Investment Now! 

Reference & Credit To: AceProfitAcademy