Retirement planning: How much do we need to retire Singapore
How much do we need to retire Singapore
Today, I’d like to address the two most commonly asked questions by soon-to-be retirees:
“How much money do we need to retire?” and “How much do We need to set aside for our retirement planning Singapore?”
This is something I get asked in almost every (if not all) my meetings with clients. And for good reason. Simply because most of them find it completely unpredictable.
Now, I understand that everyone has his or her own needs and expenses. All of you reading this will have a different definition of what is considered as “necessities”. Some of you may need to spend more; others may simply require less.
So let’s bring it down to a common denominator: the bare minimum so you can know how to plan for retirement in Singapore with all these figures for the expenses needed
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Here’s a breakdown of how much all of you will NEED, per month, in the very least:
As you can see, I’ve broken the budget down into 4 simple expenses:
#1. FOOD
At the bare minimum, which is to say most of your meals are home-cooked or bought from the coffeeshop, you will need to spend about $500 per month. That’s roughly $17 a day for 3 meals.
It could be more or it could be less, depending on what your eating habits or nutritional requirements, but I believe this will be the cheapest day-to-day solution you can find. Unless you opt for instant noodles for every meal (which is impractical and very unhealthy).
#2. TRANSPORT
If you don’t drive and take the bus and train everywhere you go, you should be spending no less than $200 a month. That amounts to be about maybe 3-4 trips per day. And again, this is also dependent on how much you need to travel.
Similarly, if you drive, it should be impossible for you to spend lesser than $200 per month unless you rarely leave the home (or if someone fetches you around).
#3. BILLS (UTILITY, PHONE, ETC.)
This is the straightforward part. Let’s assume you don’t use much water or electricity, and you’re on a standard phone data plan. That should cost you no less than $300 a month, give and take.
However, you should also be considering the fact that as mentioned above, you’ll be doing a lot of cooking. That may rack up a higher utility bill.
#4. ENTERTAINMENT
Finally, we have the trickiest part of your budget to consider: Entertainment.
Now, “entertainment” is a huge umbrella that may or may not encompass many things. Meeting up with friends for coffee… Taking your grandchildren out… Shopping with your family… Maybe even setting aside some money every month for an overseas trip or two a year…
To be honest, there’s no single way to accurately measure this as it can vary drastically from month to month.
But that’s where the danger comes in. When I discuss this portion with my clients, a lot of them feel that they can afford to put down a smaller figure under entertainment. But in reality, they end up spending way more than they intended to.
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So, there you have it. A realistic, conservative breakdown of what you will need to spend on a monthly basis.
But now that you know this, here’s a simple question for you:
Honestly, do you really want to live according to this budget in your golden years?
No, right? I mean, the budget I outlined above is really only covering the barest minimum. It’s not exactly a “comfortable” way of life. And some of you might even find this insufficient!
I came up with this breakdown not to encourage you to follow it. I drew this up to show you the REALITY of money. How small it can be. And most importantly, how dangerous it can be for you, if you don’t start planning your finances early on.
The key thing you SHOULD be focusing on, however, is this:
How to INCREASE your monthly budget. How to grow your finances. How to enlarge your wealth and cash flow, so you don’t have to live on such a tight budget, when you’re at the age to enjoy life!
Now, there are many ways for you to do that. For example, the government’s CPF Life scheme. It provides you with a certain sum you can draw out on a monthly basis. You should decide based on which of the 3 CPF life payout suits best for your retirement needs after you have meeting the Full retirement sum scheme.
But truthfully, it won’t be enough. Not if you want to live financially free.
If there’s anything you can take away from reading this, it’s that you can do MORE. You can start to plan your finances EARLY. You can take action TODAY, so that you are free to live without sweating your finances!
Ask yourself this: Do you want to be free of financial restraints in your golden years, and live comfortably in your retirement?
If your answer is yes, let me help. Put down your details in the form below, so that I’ll contact you shortly to discuss how you can do just that:
