How To Plan For Your Retirement: Shockingly Simple Math For Retirement Planning In Singapore!
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- เผยแพร่เมื่อ 19 พ.ค. 2024
- Engage JOSH TAN on a FEE to build towards for your retirement, achieve your breakthrough TODAY: www.theastuteparent.com/josh-tan ✅
Key parts on this video on #retirement
1) Problems with retirement planning calculation
2) What you need to prepare before reaching retirement
Fear of running out of money is a problem I hear from retiree clients.
80% of retirees have their savings after 20years. Many hoard onto their cash. Some even grew their assets! Scarcity mindset is real
50% of Singaporeans feel they need to rely on children for their retirement
From studies, 70% of your current expenditure is a good projection for your retirement expenditure.
If you spend $3,000/m now, expect to spend about $2,100/m when you retire.
Check These Video Tutorials Out!!
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2) Tutorial on CPF escalating plan: • CPF Life Basic Plan su...
3) 3 buckets for your cash: • What If You've Sold Yo...
Sources
www.income.com.sg/blog/retire...
www.businessinsider.sg/almost...
am.jpmorgan.com/us/en/asset-m...
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About Josh:
Josh holds a degree in Accounting.
In 2016, he co-founded the financial education website TheAstuteParent to provide detailed insurance plan analysis and financial planning tips to help you kickstart your journey towards financial freedom.
As a ChFC charterholder, Josh has agreed to be bound by the ChFC®️/S Code of Ethics. This includes, among others, acting in a professional manner when it comes to conducting due diligence on primary and secondary sources of investment-related data, and articulating his investment opinions based on his research and beliefs. Based on his research and analysis, he highlighted his beliefs and opinions, and illustrated the concept of time value of money, as of the time of the video. No products were advertised.
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Thank u Josh. Starting my retirement financial planning post 40 YO. Ur videos are holistic, pragmatic and sound. Will continue to follow and do keep the content going. Thank u
Hi CS, welcome to the family =)
Thank you so much for your video. I've just started working and your video has helped me a lot in my future planning!
Glad it was helpful! Smash the subscribe and welcome to the family =)
Looking back at this 3 yrs later, all my replies in your videos ave been consistent, true and honest. All the best, keep going JT
Thank you for the support
Re-Subscribe to your channel. Amazing content. IMO honest and sincere sharing with factual information is crucial. Cheers
Welcome back H S! Any thoughts, questions or ideas on this topic of retirement do leave here too! =)
The scarcity mindset is so real and thanks for pointing this out to many people who are not aware of this. :-)
Sure, cya around more Hazel :)
Worked well - thanks Josh!
Glad it helped! =)
Thanks for the very educational video! Actually, another component that goes down after retirement is personal income tax, which would be quite substantial for a pair of working couples. Then selling the car to take public transport would be another cut off the monthly expenses. I have a feeling that inflation will be much higher in the future than current levels because rising sea levels and changing weather patterns affect food production and food prices increase will escalate. Water will also be increasingly more expensive when rising sea water contaminate fresh water supplies. Much hotter climate will mean more expenses on air-conditioning.
Agreed. Cya around more Edmund!
Watching your video is much more addictive and valuable than Tiktok
share with someone who should learn too
Hi Jose , this is Philip well I been following your clip n also gather all important point that you said that close to my actual lifestyle n expenses that I foresee going to happen in next 20 years to come . I am 50 next year n well been doing my planning in term of early retirement plan. Guess there could be more questions and advise that need from you from time to time . Thanks
Hi Philip, all the best. If you think there may be a need to personalize and official get advice, check ✅ ENGAGE Josh Tan on a fee for financial planning to build towards for your retirement!
► www.theastuteparent.com/josh-tan
Good point on listen to second authorise adviser for more professional advise
Thanks 老李小李, Ive actually had multiple enquiries from this sharing.
Hi Josh, could you do a video to explain the basic of bank's premium financing to purchase annuity insurance life plans. Seems like a good approach. Thank you.
Hi EFK, ok, ya it’s increasingly popular. Stay tuned :)
@@joshconsultancy thank you very much
Leveraging on the banks to purchase annuity plans. The necessary requirements, the pros and cons. Many people would be interested.
Hi sir, just a suggestion, if you could put a timestamp on every topic you touch on! That would be helpful for us!
Good idea! Cya around Syazwan!
Hi Josh, thank you for your video. Just a qus, did you factor in old age ailments' treatment cost e.g doctor consultations and medications per month during retirement for your calculation.
Hi Zhi Hui, the survey in the video was on actual retirees in US. Medical cost does increase and is factored in. The rest of the expenses drop. Hence, 70% expenses now is a good estimate to be sufficient. In SG, our government is a lot more into universal healthcare benefits, like CHAS.... Hope it answers, cya around and smash the subs to get notified on new retirment topics =)
I think we need to do research on the spending of retiree. I do not think we have the same expenses as we do when we are working. I am not sure how much retiree needs.
Hi Catherine, theres a graph within the video. It shows in general about 70% of your current expenses. The breakdown is very interesting... check it out =)
Pls do a video on couple retirement planning .. as no point seaparte planning.
HI Madhavi, the targeted amounts will be largely numbers x2.
I did some similar calculations myself a couple of years back. Very glad to see that we came up with very similar figures (i.e. 800-900k). 👏
Hi CP, nice. Share the message to more =)
@@joshtan4417 mell
Subscribed cos great content and i support local
welcome on board siti!
perhaps can also include CPF life payout as a supplement to the $2100 draw down per month
Hi BLH, sure. Ive tutorials in retirement with CPF life factored in too =). CHeck around and cya around more!
Does the $2,100/mth include all your policy premiums that u need to service through your retirement? This amount of expenses could be fund by cpf life enhance retirement sum. Also not to forget about other expenses such as replacement of spoilt electronic stuffs and electrical appliance eg air cons, fridge, tv and travel expenses and medical expenses. My calculation end up with about $40k per year excluding policy premiums.
Hi P TH, if its life insurance, policies premiums should be FULLY PAID by then. If it's term insurance hopefully it has ended by then. Only premium could be integrated shield plan? It is true that ERS and standard plan may be sufficient for $2,100. But everyones strategy is slightly different. Happy to hear that you've taken the time to do your calculations. If you are ok, do leave some details of the breakdown here too, keen to hear. SUBSCRIBE AND see you around more k =)
Josh Tan - TheAstuteParent Yes those medical policy plan eg eldershield or CI plan will continue till the selected coverage age. For me till age 75. The 40k per annual is not consistent throughout the retirement period 60 yr till death. 60 to 70 will be higher and 85 onwards will be lower eg 35k. The retirement incomes are funded by cpf life ERS with std plan, 2 main annuity plans and 2 secondary annuity plans. And this is for one person, my spouse have similar setup as well. We based on the guaranteed payouts sum of each annuity plan for the above so any gain from non guaranteed portion will be bonus for us. Cash savings, cpf balance savings, any other assets are excluded.
As the required retirement sum is based on the life expectancy (average/mean), 50% will run out of money following the figure. Best to meet 99% confidence level, but that would make most to flip or give up.
I understand where you're coming from. There is a tough balance to strike, hence going with an average hopefully is a good motivating point for anyone
Tks so much for sharing! I have a question for U....
I am 47 and I have a fully paid HDB flat. I thought of topping up cash into my SA to earn 4%. My projection of my RA to be around +$160k when I reached age 55. Somehow short of full Retirement Sum...
Do you think is it a good idea to top cash into my SA? I am just worried that my top up cash(20k??) will get stuck and I am not able to draw them out at age 55.....
Hi Kean, "good idea to top cash into my SA" - it has tax relief and ok if its spare cash. But if your thoughts are "not able to draw them out at age 55....." perhaps it is a hint you feel the cash may be needed and not spare cash. Hope it helps. Speak to a qualified adviser.
Good tips
Thanks Gladis. Check the retirement series here
Quite freaked out by the healthcare cost and its corresponding insurance premiums between 60 to 90. Would like to be safe to protect that $800k. How to cope with the senseless insurance premium increases, fine print exclusions and aftercare ?
Hi Tan, if cost is reined in better, insurance premiums should grow slower moving forward? Fingers crossed
5000 baht or 5000 ringgit also can.
I am aiming for ERS for CPF Life upon 65yo payout and it can already potentially cover 70% of the monthly expenses already. Just need some passive bond etf/index etf/Reits/Annuity to cover the other 30%...Sounds feasible right?
Yes it does =) congrats
@10:45.. Is the $2100/mth for retirement flat through out the 40yrs. How abt inflation?
Hi tgf, its a simplification of numbers. If better, agreed that some inflation should be factored in =). Cya around more ya
3% returns maybe today. 10 years later, It may go lower. 30 years later ... it can be even lower. There is no concrete science that it can maintains 3% for 40 years simply with ever lower rates that will push down more safe investment products.
Hi Cory, true. There are however, long term annuity plans with the guaranteed locked in. This article may interest you www.theastuteparent.com/2020/05/china-taiping-infinite-harvest-annuity-plan-for-monthly-cashflow/ . See you around more =)
Nothing mentioned on nav, net asset value that can easily hit off 40% off total investment value even for something safe. Let say unit trust.
40% of value? That has to be equity funds. IG/HY bonds and mixed funds data can be seen to 2008 as a stress test. Hope it answers
I am 61 and retired 3 yrs ago, I am interested to know what kind of bonds or annuity give u 3%?
Hi Astrid, there are retail bonds that have returns of 3%. like the SIA retail bond. But before buying it, please speak to a qualified adviser if you are unsure of the risk. For annuities, you may check my analysis here on NTUC VIVOWEALTH SOLITAIRE www.theastuteparent.com/2019/11/retirement-plan-vivowealth-solitaire/
Hi Josh, Thanks for the reply. Another question. Is it wise to top up my CPF retirement account? I was just watching the TH-cam video by this gentleman Roy Ngerng on the CPF and HDB trap. Share your opinion please. Thank you.
Hi, just curious if my sum is correct... I am 5o this year... I assuming IF I am still employed with same salary until 55...
Current OA and SA $248,473.07 (0A $49,119.17 SA $199,353.90)
Interest earn from SA for next 5 years $40,000.00
Monthly contribution for next 5 years $132,000.00
Pledge flat at 55 $104,500.00(assuming min sum is $209,000.00)
Total $524,973.07
RA limit $104,500.00
Estimated to withdraw at 55 is $420,473.07
Hi Steven, that’s BRS you’re thinking of? If yes then it seems correct. But why not go ERS?
@@joshconsultancy after working for so long, my plan is to cash our whatever pap allows to .... thanks Josh
You are saying here we need to save up to$833,000 plus for retirement of 40 yrs if we are spending less than $2,500+ per mth. I assumed that if we have cpf life of about $1,000+ at age of 65, and if we will to rent out a room of $600, then maybe $400,000 savings in hand at 65 will do, as a common folk?
Hi Ray, if age is already now at least age65, then from first glance is seems enough
The slide where it shows that 2million is required for retirement fund needs to be adjusted to monthly spending of $2,100 per month. That way the basis of comparison can be the same for the last slide where only $833,564 is required.
Hi Keng Seng, the $2m yes is for friends who assumed they want to maintain $5000/mth expenses. Cya around more ya =)
Thanks for prompt reply Josh.
Hi Josh, is the CPF RA part of this 833k you mentioned?
Not within Peter in this concept
@@joshconsultancy I see, thanks Josh, so it's quite conservative calculations because if I'm 65 above, and if I have CPF ERS payout of 2100 per month, plus your 2100 per month calculated from 833k invested, my expenses budget will be doubled.
The cpf actually solve part of our retirement worries. Thus, together w own investment portfolio one can retire comfortably.
Fully agree. CPF works as a strong safety net!
Why would a 80 to 70 years old need $5000/mth to spend. As you grow older spending power would be lower right. So have to take this to calculate it.
Hi Kelvin, depends. Evven though lifestyle spending may drop, medical needs for one increases
Simple math, a full retirement sum of $200k in RA will payout abt $1.6k monthly after 65 for the rest of your life.
SGD800k can retire like king in any South east Asia countries.
I agree. Question is $800k for retirement in SG. I guess it may be possible if expenses are shrunk...
Always keep your expenses low!
Hi, absolutely. I think for basic needs $1.5k is actually quite doable in Singapore somehow. Cya around more k!
Hi Josh what are your retirement plans?
Haha what are your retirement plans are more impt Rajesh. Hope the tutorial was helpful 👍
@@joshconsultancy it has been tremendously useful! The target is 50 years (may be idealistic but that's the goal). Been trying to grow my investment pot, get a side business started and continue saving.
@@rajeshrai3652 no probs. If you've family looking to understand retirement planning, do share my contacts or this tutorial with them 😉
@@joshconsultancy I have retired due to a Stroke. Can u advise me on what instrument can get me 5% return. Thank you.
Is this 70% factor still valid post Covid?
We would be post pandemic soon enough. What are your key concerns?
Not realistic to assume expenses stay the same for 40 years! The assumed expenses are also too low.
Hi Lay Ping, its understandable to feel concerns that it is too low. Inflation, rising medical cost etc... Studies have shown spending not only stays same BUT tails off actually in retirment. Cya around more and check this video on retirement too $1,200,000 ISN'T IT ENOUGH TO RETIRE 😱? HOW TO CALCULATE HOW MUCH FOR EARLY RETIREMENT! th-cam.com/video/usaFnjDSX3M/w-d-xo.html
@@joshconsultancy This one is more realistic and for quite basic living standard only: www.straitstimes.com/singapore/study-finds-1379-a-month-needed-to-meet-basic-living-standard-for-single-elderly
This is assuming no change of requirement by pap for next 5 years... I have paid off .y hdb flat
True true, smash the subs Steven and cya around more 👍
actually the way you spending is not much different from those retiree. You spend very very carefully as well. :-)
Hi Martin, true =) I hope my boys follow suit in future too. Cya around more
@@joshconsultancy yes, i hope the same for my kids
Hey about tax ... difference 1% with inflation..not real...
Most passive income streams are tax free FS. Cya around more ya! 🙂
Are you talking usd?
Hi Mary, Sgd. How did usd come about?
@@joshconsultancy just want to clarify. Tks
I don't think Annuity plan is a good investment.. Yes, they claim 3% or even 4%, but you should realize only 1% or max 2% is guaranteed part.. And you should be focusing on the guaranteed part more.. Beside most of them don't start right after you invest (if it's a lump sum). If it's start 5 years later, and assuming your capital growth at 5%, then this 3-4% is actually much lesser (more like 2.4 - 3.2%).. There is soo many oversimplification in this video to the point I think it's not very useful..
Hi jinsh, annuities have a place in planning. At a different life stage, priorities can be different. It is the only instrument that is fuss free with guarantees to add on to cpf life. Hope it answers
I need about $20k per month to retire although i spend only about $10k to $15k. Why? Kiasu mah.
Haha, what do you spend on the $15k/m DY?
$5k for the Wife, $5k split between two kids and $5k for myself. I have no loans, 100% debt free. Some months only $10k. This number is just standard household expense which is basically food, insurance, utilities, entertainment, medical, general activities, petrol, etc…. I have no intention to consciously downgrade lifestyle upon retirement at 55, but as we age, we naturally spend less. How do i do it? Watch my TH-cam channel, hahaha, joking
As of the time of this reply which is 2 yrs later from my original reply, i have raised my requirement to $30k per mth for retirement. This is to have a very decent retirement, travel as i wish and enjoy the remainder of my life. Again this doesnt mean i will spend $30k every month. Its simply the ability to do so….. just like how people buy 400hp car but only drive 90kmh . 😂😂😂
Get your financial adviser to help reduce your retirement funds.
Increase not reduce haha. Cya around EF
Your math makes lil sense. I think cpf life will give you $2100pm with FRS or ERS. That means max 200-300k in cpf
cpf life pays from age65. the cpf life calculator factors in compounding at 55 when it generates the 2100.
I rather retire now and then work for rest of life because i dont know when i die. So happiness come first. If not人在天堂 钱在银行 有屁用. Haha
V true! Cya around Mr man =)