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Chitchat How much do you need to retire?

Discussion in 'The Courtyard Café' started by johnny333, Apr 17, 2017.

  1. johnny333

    johnny333 Alfrescian (Inf)

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    I remember reading somewhere that you need about a million $ in your CPF if you want to retire comfortably. I doubt that the PAP will ever let you you touch your CPF even if you have the money because Ho Ching is losing the money faster than you can save.

    So better save some money outside your CPF. The big question is how much do you need:confused:

    Below I've included a US article to get a better idea about how much an american should be planning for. However Spore is a very expensive place with all kinds of taxes, so you will need more $$$. Otherwise you should be planning to spend your retirement in cheaper countries like Malaysia, Thailand, Indonesia, ...


    http://www.cnbc.com/2017/04/16/how-...ly-in-their-40s-has-saved-for-retirement.html

    Here's how much the average family in their 40s has saved for retirement

    By the time you've hit 40, you should have a solid handle on your finances. This is especially true for matters related to retirement, since your golden years are fast approaching.

    To be financially ready to retire by 67, retirement-plan provider Fidelity Investments says you should aim to have six times your salary saved by age 50.

    Are Americans on track?

    According to a report from the Economic Policy Institute (EPI), the mean retirement savings of a family between 44 and 49 years old is $81,347:



    To get closer to Fidelity's recommendation of having six times your salary saved by 50, follow these four steps so your money can grow over time:

    1. Contribute as much of your income as possible. Most experts recommend setting aside 10% or more in a tax-advantaged retirement savings account, such as a 401(k) plan.

    2. Automate your contributions. Have your employer do a payroll deduction or have your money taken out of your checking account and sent straight to your retirement account. You'll never see the money and will learn to live without it.

    3. Get in the habit of upping your savings consistently, either every six months, at the end of each year or whenever you get a raise. Again, if you make this automatic by setting up "auto-increase," you won't forget to up your contributions (or talk yourself out of setting aside a larger chunk).

    4. Invest in something other than your retirement-savings plan. Enrolling in your employer's 401(k) plan is a good start, but experts say that it may not provide enough to fund your future. It's smart to consider alternate retirement savings accounts, such as a Roth IRA, traditional IRA and/or health savings account.

    You can also research low-cost index funds, which Warren Buffett recommends, and online-investment platforms known as robo-advisers.


    But that number doesn't tell the whole story. Since so many families have zero savings and since super-savers can pull up the average, the median savings, or those at the 50th percentile, may be a better gauge. The median for families between 44 and 49 is only $6,200.
     
  2. AhNehs

    AhNehs Alfrescian Old Timer

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    It all depends on the quality of life you want to have. If you want to have 4 holidays a year, then you need more. If you want to eat at fine restaurants every week, of course even more.

    If you want a basic quality life of simple food and enjoyment, then you need lesser than those who crave for material life.

    Of course if you are gambler, you should just die and stop burdening others. :D
     
  3. johnny333

    johnny333 Alfrescian (Inf)

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    To maximise your savings avoid mutual funds(unit trusts) because you will be paying management fees.

    For passive investors you can consider investing into some kind of index funds. The popularity of these finds are increasing.



    http://www.cnbc.com/2017/04/16/vanguard-is-growing-faster-than-everybody-else-combined.html
    Vanguard Is Growing Faster Than Everybody Else Combined

    In the last three calendar years, investors sank $823 billion into Vanguard funds, the company says.
    Vanguard's traders funnel as much as $2 billion a day into stocks like Apple, Microsoft and Amazon

    MALVERN, Pa. — The Vanguard trading floor is the epicenter of one of the great financial revolutions of modern times, yet it is a surprisingly relaxed place.

    A few men and women gaze at Bloomberg terminals. There is a muted television or two and a view of verdant suburban Philadelphia. No one is barking orders to buy or sell stock. For a $4.2 trillion mutual fund giant that is still growing rapidly, it occupies a small fraction of the space of a typical Wall Street trading hub.

    You can barely hear the quiet hum of money being invested — money in scarcely imaginable quantities, pouring into low-cost index mutual funds and exchange-traded funds (E.T.F.s) that track financial markets.

    In the last three calendar years, investors sank $823 billion into Vanguard funds, the company says. The scale of that inflow becomes clear when it is compared with the rest of the mutual fund industry — more than 4,000 firms in total. All of them combined took in just a net $97 billion during that period, Morningstar data shows. Vanguard, in other words, scooped up about 8.5 times as much money as all of its competitors.

    "Flows of this magnitude into one company are unprecedented," said Alina Lamy, an expert on fund flows at Morningstar. "Since the crisis, investors have been saying, 'I may not be able to control the market, but I can control how much I pay in mutual fund expenses.' And when they look for quality funds with low fees, the first answer is Vanguard."

    The triumph of index fund investing means Vanguard's traders funnel as much as $2 billion a day into stocks like Apple, Microsoft and Amazon, as well as thousands of smaller companies that the firm's fleet of funds track. That is 20 times the amount that Vanguard was investing on a daily basis in 2009. It is manageable, in large part, because no stock-picking is involved: The money simply flows into index funds and E.T.F.s, and through February of this year, nine out of every 10 dollars invested in a United States mutual fund or E.T.F. was absorbed by Vanguard.

    By any measure, these are staggering figures. Vanguard's assets under management have skyrocketed to $4.2 trillion from $1 trillion seven years ago, according to the company. About $3 trillion of this is invested in passive index-based strategies, with the rest in funds that rely on an active approach to picking stocks and bonds.

    More broadly, this deluge of money abandoning higher-price actively managed funds for Vanguard's plain vanilla cut-rate vehicles has come as an existential shock to a mutual industry that has long been resistant to change.

    What is being called the Vanguard effect was felt last month when the indexing giant's rival, BlackRock, announced that it would revamp its stock-picking operations, promoting instead a process that relies more on computer-driven methodologies.

    The effect within Vanguard has been no less profound. For decades, the firm has made the case that cheaper index funds will, over time, outperform more-expensive mutual funds that rely on brainy portfolio managers to pick stocks.

    The main advocate of this doctrine was the founder, John C. Bogle, who retired in 1999 but runs a research operation on the Vanguard campus. For years, the firm has relied more on his simple message and the passion of his devotees than on fancy advertising campaigns to spread the word.

    Unlike its peers, Vanguard is owned by its funds — and ultimately its investors — so as money rushes in, expenses are persistently reduced, resulting in perpetual savings for the legions of Vanguard clients. They number well over 20 million and include New York Times employees: Vanguard runs the company's 401(k) retirement plans.

    The model has been a powerful one: Since 1976, fees on Vanguard funds have fallen to about 0.12 percent from about 0.70 percent. By comparison, Lipper calculates that the average fee for all mutual funds is currently 1 percent, although it has been coming down rapidly.

    "Mr. Bogle used to say, 'This is not our money,' and I agree," said F. William McNabb III, Vanguard's chief executive, referring to the extraordinary inflows. "For many years, there has been a real move to our way of investing. And it's more than active versus passive — it's high cost versus low cost."

    This no-frills approach has come under some strain as cash flowing into Vanguard funds reaches new highs year after year, some people who follow Vanguard closely say. There have been reports of operational snarls, including website outages, longer-than-usual wait times on the phone and misdirected fund transfers.

    "All this growth has come at the same time that the company has been cutting costs," said Daniel P. Wiener, the editor of the Independent Adviser, a newsletter for Vanguard investors, who says he has received many complaints about the current state of customer service at Vanguard. "Most companies when they are growing spend more. Vanguard is trying to spend less. At some point, cutting costs will bite you."

    There is no doubt about Vanguard's commitment to pinching pennies. In touring the 287-acre campus of pathways, low-slung buildings and a commanding statue of Mr. Bogle, the sensibility is decidedly puritan.

    There are few flashy cars to be found in the parking lots. The walls are largely devoid of eye-catching art — with the exception of some musty paintings of the HMS Vanguard, a Napoleonic-era British warship that inspired the company's name.

    In sum, the look is slightly drab, certainly by Wall Street standards: rows of uniform cubicles, colorless carpets and an executive boardroom that seems more appropriate for a community college than one of the largest financial institutions in the land.

    Vanguard executives say they are disciplined in terms of plowing money back into people and technology, but not overly so. "Our true investment spending has doubled in the past five years," Mr. McNabb said.

    This tension between breakneck growth and spending restraint is most acutely felt in the firm's retail division — or the front lines, as they are referred to here — where 6,000 customer service representatives attend to the wishes, demands and whims of the close to eight million clients who purchase their mutual funds directly from Vanguard. In 2015 and 2016, this division added 350,000 new accounts each year, numbers never before seen at the firm.

    "The spotlight is on us, given the growth, and there have been operational challenges," said Karin A. Risi, who oversees Vanguard's retail investor group and is in the midst of an aggressive hiring push. "But it is not fair to say we are not investing. Bringing in 2,000 crew on a base of 6,000 is not insignificant."

    As with many executives at Vanguard, Ms. Risi gets a glint in her eye when she talks of the virtues of investing in low-cost index funds. Like the majority of her peers, she has spent the bulk of her career at the firm and, as a certified culture carrier, it is clear that she is taking the current growing pains to heart.
     
  4. johnny333

    johnny333 Alfrescian (Inf)

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    One does not know how expensive Spore will be in the future?

    So in my case I am planning for the worst e.g. I'm still monitoring the markets, re-investing my dividends, looking into diversifying into ETFs, index funds, .. etc.
     
  5. SNTCK

    SNTCK Alfrescian Old Timer

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    Money always not enough
    I pay for my own medical bill now, sgd 1k minimum
    My admission bill luckily can claim my Husband company insurance, else really going to bankrupt
    Some of the procedure cost also can claim.
     
  6. Bonut

    Bonut Alfrescian Old Timer

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    This one must consult our resident early retiree, Chairman of the Singapore Anti-Slave Movement, the Rt. Hon. Chootchiew.

    He gave up holding slim waist to attain nirvana and his profound 'Q' philosophy is not understood by many. He epitomizes the Scripture in the Bible that "a prophet is not welcome in his hometown."
     
  7. mojito

    mojito Alfrescian Old Timer

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    Depends where you want your three meals sir. Don't listen to all these fearmongers. All is well if you right size your life. We humans are very adaptable yes? :cool:
     
  8. AhNehs

    AhNehs Alfrescian Old Timer

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    1. MRT, Bus, Walk vs Owning a Car.
    2. Homecook vs Food Centre vs Fast Food vs Restaurants vs Fine Dining.
    3. HDB vs Condo vs Landed.
    4. No overseas holiday vs Simple Overseas holidays vs Luxurious Overseas holidays.

    It all depends on what you want.

    For me, I enjoy a simple home made congee with cheap small scallops, some mashed century egg, lots of chopped spring onions, a little tangchai and chilipadi :) I can eat this 4 times a week and I am happym
     
  9. desmondquek

    desmondquek Alfrescian Old Timer

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    Want invest, better not listen to news report for advice. No free lunch.
    They're paid for by financial companies. Content is skewed.

    Sometimes the news feature 'experts' like Jim Rogers, Schiff and Marc Faber. They're there to sell books or fear-monger.
    dunno how many people have been screwed by these perma bears and gold pumpers.
     
  10. johnny333

    johnny333 Alfrescian (Inf)

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    I have to disagree about being called fear mongering :D
    Just Look at LKY. He was probably worth billions of $$$ when he up the lorry. Why was he not satisfied with just millions:confused:

    In the words of the PAP, what's wrong with collecting MORE money?
    I'm comfortably off but that may change if I have a serious long term illness.

    Once you make your 1st million the rest is easier. Just don't blow it all & continue to save $. I'm not touching my principal, only using the surplus funds I have.
    My goal is to make my next million ;) I'd rather use the $ to invest then to waste it ona car or buying a new home. If I up the lorry tomorrow all the $$$ goes to my family, so all the effort is worth it.
     
  11. ginfreely

    ginfreely Alfrescian Old Timer

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    That's why buying medical insurance is very important part of retirement planning. Must buy as soon as graduate when in good health the highest class possible. That will take care of medical expenses as charged with no worries at all, just didn't cover screening and medical tests to detect illness.
     
  12. AhNehs

    AhNehs Alfrescian Old Timer

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    Sister gin is insurance agent ah? :D
     
  13. ginfreely

    ginfreely Alfrescian Old Timer

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    No i am unemployed. But i have no worries of my medical bill becos i bought maximum medical insurance.
     
  14. johnny333

    johnny333 Alfrescian (Inf)

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    Of course I've thought about getting health insurance BUT what guarantees do we have that the insurer will honor the terms of the insurance:confused:

    We've seen banks wriggle out of their responsibilities. Big business which have the backing of the PAP will definitely be given plenty of wiggle room.
     
  15. ginfreely

    ginfreely Alfrescian Old Timer

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    No guarantee indeed. Insurance companies also may bankrupt. I just make sure i have enough in my CPF medisave to pay the premium using the 4% interest.
     
  16. bart12

    bart12 Alfrescian Old Timer

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    My retirement plan rely on the passive income that I can generate from my investment.. As long the passive income is more than my expense, I am ready to retire
     
  17. Bad New Brown

    Bad New Brown Alfrescian Old Timer

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    I need 5 years of my current monthly take home pay for my retirement fund :p
     
  18. eatshitndie

    eatshitndie Alfrescian (Inf)

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    $6.9m in sillycon valley with $69m reserved for hospitalization and medical expenses at age 69 and above.
     
  19. Leongsam

    Leongsam Administrator Staff Member Old Timer Old Timer

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    I covered this issue extensively 4 years ago. It remains relevant today.

    https://www.sammyboy.com/showthread.php?151153-The-RETIREMENT-thread&p=1515996#post1515996

     
  20. JohnTan

    JohnTan Alfrescian (InfP) Old Timer

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    You should max out your CPF SA and stop emptying it to pay your HDB mortgage. Don't overpay for your heavy expenses like car, wedding and HDB flat. Take more WDA courses and upgrade your professional skills so that your salary can go up.
     

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