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
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.
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 =)
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.
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 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 RU-vid video by this gentleman Roy Ngerng on the CPF and HDB trap. Share your opinion please. Thank you.
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
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 =)
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.
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, 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
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 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! ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-usaFnjDSX3M.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
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 =)
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.
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?
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
@@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.
$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 RU-vid 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 . 😂😂😂
@@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.