Retire With ONLY $500,000? | Why Retirement Can Actually Be Achieved With Less...
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0:00 Introduction
1:14 Different retirement approach
4:00 Dividend only
5:30 4% rule
7:50 Using the capital
10:06 Modest retirement
11:30 $500k only
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Josh holds a degree in Accounting from NTU. In 2016, he co-founded the financial education website TheAstuteParent to provide detailed insurance plan analysis and financial planning tips.
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Hi Josh, I like how you do TH-cam on finance matters while weaving in settling with simple living for retirement. I like how you draw parallel to life experiences on adaptability etc. While most people think 1m or more is needed to retire, you don't push that agenda, instead you push certain form of lifestyle that is simpler and realistic. I personally feel like achieving 1M65 may be daunting, hence, having a mindset of living humbly is what we should strive to be contented with for retirement. Living should not always revolves around money. Living is life fulfilled with happiness through contentment - and this is not brought about by money, but by relationships, managing expectations, love and laughter.
Thanks for the video!
Thank you for the high praise 🙏 you’ve raised good points too
Live simply and simply live. Yes, retirement can be scary. I have 6 more years before retirement and my RA already maxed up. My most concern is my health. Someone told me I looked 10 younger than my actual age. Don't just plan your finance ahead of time. Do something for your health now. Don't wait for disease to come. But be 3-5 steps ahead of any disease before any one of them shows up at your door by eating wisely, regular exercise and maybe meditate, like me.
You don't need a lot to live. Take care of your health at your prime. Don't wait. Health costs at old age is like running water down the drain. If you good take care of your health while you are still young, you are already halfway to living well in your retirement. You don't need expensive health products. Some natural health foods are actually quite cheap.
Like this! "Don't just plan your finance ahead of time. Do something for your health now. " =)
@@joshconsultancy Most locals are too ignorant about health foods and health care. They don't bother to educate themselves on health products.
They just happy go lucky eat all your tasty treats like there is no tomorrow. Let the doctors take care of my health. When they fall sick, just go to the doctor and take some meds. They what they mean by taking care of health.
Steve Jobs who died of pancreatic cancer said something crucial : ' If you don't take food as your medicine, someday you will have to take medicine as your food.'
Take your health more seriously if you want to retire well. Good health is a discipline, it's not for free.
I completely agree with you. Not sure how many ppl are aware, health in my opinion should be the top priority. Without investing in it, even if you have all the wealth in the world, u can't take a penny along when u passed on. Just simply invest time in exercise, control alittle on diet and scheduled health screening. I m in my 50 and there are still ppl think that I am in my late 30s or early 40s. I am glad that I achieved my goal in semi-retirement at 45yrs old and I chose to live in Tokyo for 2 years just to fulfill my buketlist. Been back in SG and working for the last 3 yrs and accumulated again some money. Targetting to retire by this year and perhaps travel to more countries. So, we can only do this if we have a good health condition to appreciate life.
Yes, health is a major advice I received when I was young along with remaining debt free
I am 48. I've achieved the prevailing CPF full retirement sum. I've paid off my hdb mortgage. And i can do 50 push-ups.
I can’t do 50, you’re good 👊🏻
Retirement is all about planning early. May I share here that I planned for my retirement (at age 50) when I was in my late twenties. Due to early planning (investing, insurance, wealth accumulation, never overstretching your finance etc but without sacrificing my family lifestyle), I am fortunate to be able to retire at 50 as planned. Since then, I have been able to live very comfortably based on my dividend / interest only which is well above S$100K p.a. without touching my investment pot. So, the key to retirement is to PLAN, PLAN & PLAN as early as possible! One biggest problem here is that too many Singaporeans over stretch / invest in their homes. Think carefully, people should buy a house (especially their first homes) base on 5X their total annual household income, maybe up to 6X, and that should be the maximum.
Good sharing and congrats 🙂👍
Yes early planning is key, i started planning in my early 30s. Am able to retire comfortably now at 50 with easily $250k passive and zero debt. But i am gonna push it till 55.
I already plan. Downgrade housing as I don't want to live with tenants. Passive through dividends, CPF. Just try to max up CPF while still young. And live simple life. No car, no fancy clothes. Minimalism is OK. Spend time by volunteering, not by spending money on fancy meals.
At what age u retiring? And how much dividend u bought?
Having a plan is a key point from this video too. 👍
why suffer here ?? Go Batam island ...Paradise ./
@@tanjem not everyone can just pack & go leh...it will not b fun to just go there to retire alone without family and friends....
@@faythang2513 you can always make new friends over there .
The left side is known as asset preservation method n the right side us known as asset draw method. There is a formula can inflation adjusted return. all this is in CFP module 5, retirement planning. hope this helps.
Thanks Josh for this piece. A summary of the various schools of retirement tactics.
But more importantly, I find that it not only provides for info.... but somewhat serves as a motivational talk as well.... the way you put perspectives across. One of the main positive differences from the many other investment & retirement videos I've watched. Thank you once again
No probs and thank you for the high praise 🙏
commenting for the algorithm! good content
🙏thank you, appreciated
Retire with $500k possible, assuming one has a fully paid up home. Not possible if one needs to pay mortgage or rental out of the income derived from the $500k. Even so, it is not going to be a comfortable retirement, unless supplemented by payouts from CPF Life. $1m is a more realistic sum to retire on, for a couple. Speaking as someone who has already retired.
I'm working towards retirement and the last few years in the run up are really trying, although higher in terms of accumulation. Could you give some advise on how you decided when you finally pulled the plug. Thanks
@@Phonedumb I did so when my investment income more or less matched my current expenditure, home is fully paid for and no more commitments for children (ie they have finished tertiary education). Now living only on investment income. The key is managing lifestyle and expenses down to a level where you are still comfortable that can be safely paid for from passive income. And leave some margin for unexpected events, like Covid or recessions.
Thanks zhouly for your feedback
agreed. have to do the maths. varies from person to person. no debt, kids settled, CPF life, and dividend income from 500k portfolio is sufficient.
I have $250,000 of passive to consume per year currently but since i want a good retirement, i am not retiring yet. Sometimes its as hard to stop as it is to not
Tks for video. Probably suffice at age 65 with cpf life, fully paid house.
Thank you Josh, the point of this video is Adaptability. See you at the summit!
See you at the summit 👍
Im lucky to get a windfall from my enbloc. Just put in bank FD & insurance savings plan to get guaranteed returns to spend for life.
hi Josh, great video ! Can I have your thought should we max up cpf RA to FRS or ERS ?
I’m a supporter of topping up to Ers if you have spare cash post age55 :)
Thanks Josh for this video!
I think if there is no legacy planning involved its much easier. Eg no kids, only wife and husband
Minimumly if both hit FRS, the basic needs in future can be taken care of.
If a couple owns an hdb, can sell it in future and get back the OA spent back into cpf and if lucky can get back lump sum cash too. (Already abt $500k OA and Cash total for a simple 4 room flat)
Parents will eventually leave us, maybe it might be a good idea to shift back to parents place after u sold your own hdb. (Shouldn't hit the 99 yrs max)
Other than that, which ever left is your hard earn savings / safe investments like SSBs / insurance surrender / matured insurance policies to tide u over until 55 yrs old, then u can start withdrawing your SA and OA
If no need to withdraw SA and OA , can also let it compound until u need it then withdraw it as necessary.
Once reach 65, can depend on CPF life. Anything extra $ left from the above mentioned can be considered as another layer.
Leave no cash behind! 😂
#leavenocashbehind 🤣
Agree. Property left behind is worth something already
i can retire with just 50 k .. it is the needs ..I do not need so much material and goods.. I just need some good food and water to survive ..
Aiming for fully shielded SA intetest + ERS. Should be more than enough.
👍 cpf life part is from age65, what would be rough plan if retirement is before age65?
@@joshconsultancy If retiring at 55, only need to save 10 years equivalent of ERS payout in cash. Then can drawdown from this cash pile + SA interest for these 10 years.
Good idea. Personally, I'm aiming for 1 ERS in OA and 1 ERS in SA, then shield SA at age 55. From age 62, use SRS monies to supplement SA interest. For contingencies or if market is good, liquidate investments as extra layer.
Thanks. Been thinking 🤔- actually can we use the capital cash to use from 55 to 65 and start draw CPF. However if a person sick, then all money save will be burnt
Yes can use to fund some retirement needs from 55-65. Have adequate insurance, that will cap liabilities 👌🏻
Is more than enough.
Continue to work till 100 if u are healthy n able to. 😊
semi-retire =)
If you target to live beyond 100 than you better embark on the CPF life escalating plan.
I am aiming for the dividend route + cpf got my retirement ...
No probs. Find what fits and enjoy the journey 🙂
I hit 55 in 1.5 years time. Aiming to do the shielding on SA, and let the OA take care of FRS. Intend to let the power of compounding interests to grow the SA account over a 10 years period. I have no investment knowledge and not intend to do any, but have passive income from rental. Debt free, not sure how much I need per month as I did not sit down to do my sum on my expenses. Just worry that the interests may not cover the inflation....
May need to change that expectation. Interest is not meant to cover inflation. If it does, there is no risk reward to take on risk
SA closing in 2025. Need to find another method to replace that approach. 😅
Is definitely enough provided you are debt free, you don’t have any one who is financially dependent on you, you have adequate medical insurance and most importantly you enjoy living simply. I am 55yo and I have decided to retire last year…not totally by choice but I am embracing it. I have quarterly budget where my goal is to spend within my passive income from the previous quarter. Been practicing this since 2020 and after 2 years I am convinced that I can retire. Now my focus is my physical and mental health, on the average I exercise 6 days and eat 10 meals weekly. Am leaving for a month long adventure in taiwan with a budget of $2000. I am a believer of die with zero, however I rather bequeath surpluses to my child at the right time.
Good sharing, happy for you =)
If have Cpf, Srs and Ssb then the basic living should be ok
I am 55 too. Currently still working, however, harbouring thoughts of an early retirement probably at 57.
I am a person who lives simply with no more loan to service and dependent(daughter's university study covered by maturing Education insurance) , what do you think of my plan, if I live on my OA+SA balance after putting away CPF life FRS. Base on current spending pattern(enough and with surplus of approx. 150K after 8 years) till age of 65. Then for CPF life to kick in thereafter. With a further saving of 400k(untouched) to generate passive income (interest/ return) to handle any shortfall from CPF life. What's your take on this? Thanks
If monthly expenses are low, which is the key variable, it can indeed work.
@@joshconsultancy
Thanks for your take on my plan and quick reply.
just thinking. if there is runaway inflation, prolong recession, another oil crisis, these will lead to higher prices everywhere. as we see now, even if i want to adapt by selling hdb and rent room, the rent will not be cheap.
have not done any calculations but gut tells me 500k can survive in singapore, but not able to retire meaningful (eg splurge on grandchildren, ocassion travels
“Prolong recession” brings down prices but ya in general our money game inflates everything.
At this amount splurging may need to be avoided but Meaningful really depends :)
Hence the adaptability and resourcefulness.
How about buy 1m dividend stocks... back up with growth stock ??
Think there’s some confusion, in retirement it’s about consumption. Sell some of the growth stock every year to add onto dividend income? When to sell? When to hold it until…
@@joshconsultancy still accumilating dividend stock (sale), once my growth (still growing) stock blows up then take a portion of it to put on dividend stock (too diversify from country and sector). I buy what i know and use stocks with good health, high dividend (controversial) also i watch my margin of safety (multiple computation from great investor).
Draw down on capital is more realistic and practical for most people. If Full Retirement Sum or even Basic Retirement Sum is attained, and with adaptability in mind, just tahan existing capital till 65 yo. This method can actually enable retirement much earlier.
Yes exactly
Inv in children MBBS if make the cut
Inv in children Dentistry degree if make the cut
500k is enough in today's dollars if one retires now. However one needs to factor in inflation at the time of their retirement.
Fixed income instruments (principal not guaranteed)after enhanced Cpf life
hi Josh, I am currently 39yo and expect a child next year. I have around 550k in stocks + savings. My household income combined with my wife is around 200k a year. My mortgage loan left about 620k. Both my wife and I have a combined CPF OA of 190k. Now the problem is I really hate my job but I am currently suffering a golden handcuff. I have considered quitting and starting a business and semi-retire. What will your advice in my situation?
Hi I cannot advice in your situation because I dont have context and I dont have a lot of details.
What I mention take w a grain of salt like a friend conversation
Quitting and starting a business because hate job is not ideal. Start a biz coz there is a genuine market problem and you're passionate to solve it. The work in entrepreneurship is likely to be worse. With debt semi-retirement is still very far. Plus your expenses will climb with new born.
If you hate your job, is there one that pays close to that and you may be happier? Would focusing on finding that be your actual solution?
Wishing you the best, hope the conversation points are useful food for thought
Hi Josh, may I ask that 50-30-20 savings rules is inclusive of CPF contributions both employer and employee? The reason being there are multiple strategies to deploy mortgage payments thru cash or CPF.
Secondly, on the topic of 6,000 expenses, it’s very real. I have 3 kids (10, 12, 15). I’m constantly hitting 8-10k monthly. I have parent to look after as well.
Lastly on housing, do we need to factor only mortgage interest as expense and the principal as investments.
Much appreciated.
Hi Daryl, 50-30-20 rule May suit a early career stage. With mortgage this formula may not help much because mortgage can be big. Is it really all needs category? Should it be by cpf or cash?
In the choice of property purchase the 3-3-5 format will save a lot of headaches.
Hope it has food for thought and cya around
Sad to hear that so many Singaporeans cant retire in Singapore, our birthplace. Who is responsible for that? Sigh…..
Actually I feel it may be own responsibility. 🙏
@@joshconsultancylargely so.
Is there a cap for CPF accounts ?
What if you maxed out your CPF accounts ?
There is a cap in RA which is ERS which affects the CPF life payout from age65
Sorry i am confused if the 500k is above their living cost? I tried to listen 2 times but i wasnt sure
I’m proposing $500k above cpf life as possibly enough for anyone who is willing to be frugal and adaptable In retirement 👌🏻😃
@@joshconsultancy thanks sorry i am wondering if this is above their rental expense, its like assumed he already fully paid a house at the first place
Great video Josh👍🏼 Agree, have a plan and start one early in life. Time flies fast and the next thing is you’re 55/65 yrs old.
Money has value only if you use it. I realised that we often have a fear of “money no enough” but if you adapt and live simply to stretch your dollars, it is possible. Some people may have $500k, $1million, $2m or $5m cash and they still think it is not enough. There’s this mindset that it is never enough. Human behaviour 😊
Thank you for the high praise. Agree with you too ^
if hyperinflation arrive and our SGD got chop ...... you need 10 Million or 50 Million ... Then i move to Batam island ..because no hope to stay here already ..
that’s taking it too far
We are living in extreme times .. the writing is on the wall .. inflation will be here to stay . Stay prepared
Definitely not enough. A health issue would wipe it off.
Insure adequately to prevent that
enough - $500k can give one about $40k - stop taking GRAB, food delivery, buying nonsense on Shoppee, and recognise value rather than price
If i have 2,million .put it in T bills .
Every six months i will get $50k ... perfect
Retirement
Actually Tbills have long existed but before 2019 no news talked about it because it yielded next to nothing
500k after CPF FRS Life and a fully paid home.
yes!
Die with zero theory … Hmm sell 2nd property at ‘appropriate’ time? Live life to the fullest where still possible 😅?
Actually why not? =)
Jai Hinduja. Need to retire with 1.9 million liquid assets to live comfortably as an ordinary atas bloke. Even medical costs can set you back by tens of millions if you are Super-rich or Royalty.
At least 10 millions needed.
Are you on course for this target of yours?
I may not even manage to get to 1 million. =(
Hey this video is to highlight what can be done. It will be ok 👌🏻
only 6.1% of SG's population are millionaires, so its totally fine and you do not need to be one to get by retirement if you live a modest life.
@@aiseh2924 Thanks for the advice.
@@joshconsultancy Thanks Josh.
👍👍👍👍👍👍👍👍👍👍👍👍
🙏🙂
syfe china looking up again. Hope it lasts this time round......
yes, been a long wait =)
Yes $5mil minimum to retire.
You may have inflated lifestyle 😅
@@joshconsultancylets just say i hv a good lifestyle.
I am hoping the new generation pay 1.5m to 2m for flats so that we the current generation can retire well. Fingers crossed. Our retirement depends on our children paying for our windfall. A successful model❤
Bear market? Buy more!
👍👍
Sometimes i think, how much $ is enough? Is it too much , is it too little?
Those who play RPG games will always try to level up until max level99 with 100 potions, 100 revives and upgrade whatever armour and weapons u can, everything maxed out
But in the end, u realised when u completed the game and defeat the final boss, u probably still have 99 potions left! 😂
Most important is to do within your means, be stress free, don't over stretch everything.
You will never going to know how much u ever need.
interesting analogy 😂
Wrong. Death is not a single path,
As the song goes - there are many dumb ways to die, dumb ways to die ...