Skip to main content

My Retirement Goal

Retirement is  hot topic these days.

silver age; savings; piggy bank; retirement fund


With people living longer these days, having not enough money is a serious issue for many. It saddens me to see old people, who are frail, clearing the plates at hawker centres, cleaning the toliets in Singapore and so on. So much about our high GDP.

I want to make sure that I am well prepared to retirement, as such, I did a calculation on what I would need if I were to retire.

Honestly, I am looking at retiring at the age of 45. Then I am still young enough to enjoy life, and yet, have worked for more than 20 years. Also, I would have finished paying for my life policies, and as such, living the health insurances to pay for.

I am also aiming to get a place of my home way before 45 (preferably by 35), and completely pay for it by 45.

So, with that, I am looking at $3000 per year for health insurance, and $2,000 per month for other expenditures. This will be $27,000 per annum. To be conservative, I'll take it as $30,000 per year, based on today's money.

I am currently 31 years old, so 45 years old is about 14 years from now! With inflation assumed to be 3% per year, this means I will need $30,000 x 1.03^14 or $45,380 per year. I also assume that the money will need to last till I am 100 years old.

I did an analysis on earning an interest of 2% and 3% on my retirement funds,

I will need:

  •  $2.55 million dollars @ 3% interest
  • $3.40 million dollars @ 2% interest


Retirement fund = $2,550,000; Interest per annum on fund = 3%
Age
Amount Required
Amount left
45
 $              45,377.69
 $                2,579,760.98
46
 $              46,739.02
 $                2,609,012.61
47
 $              48,141.19
 $                2,637,697.56
48
 $              49,585.43
 $                2,665,755.50
49
 $              51,072.99
 $                2,693,122.98
50
 $              52,605.18
 $                2,719,733.33
51
 $              54,183.34
 $                2,745,516.50
52
 $              55,808.84
 $                2,770,398.89
53
 $              57,483.10
 $                2,794,303.26
54
 $              59,207.60
 $                2,817,148.54
55
 $              60,983.82
 $                2,838,849.65
56
 $              62,813.34
 $                2,859,317.41
57
 $              64,697.74
 $                2,878,458.26
58
 $              66,638.67
 $                2,896,174.17
59
 $              68,637.83
 $                2,912,362.43
60
 $              70,696.97
 $                2,926,915.43
61
 $              72,817.87
 $                2,939,720.49
62
 $              75,002.41
 $                2,950,659.62
63
 $              77,252.48
 $                2,959,609.35
64
 $              79,570.06
 $                2,966,440.47
65
 $              81,957.16
 $                2,971,017.81
66
 $              84,415.87
 $                2,973,200.00
67
 $              86,948.35
 $                2,972,839.20
68
 $              89,556.80
 $                2,969,780.87
69
 $              92,243.50
 $                2,963,863.48
70
 $              95,010.81
 $                2,954,918.25
71
 $              97,861.13
 $                2,942,768.83
72
 $            100,796.97
 $                2,927,231.02
73
 $            103,820.88
 $                2,908,112.45
74
 $            106,935.50
 $                2,885,212.26
75
 $            110,143.57
 $                2,858,320.75
76
 $            113,447.88
 $                2,827,219.06
77
 $            116,851.31
 $                2,791,678.78
78
 $            120,356.85
 $                2,751,461.59
79
 $            123,967.56
 $                2,706,318.85
80
 $            127,686.58
 $                2,655,991.24
81
 $            131,517.18
 $                2,600,208.28
82
 $            135,462.70
 $                2,538,687.95
83
 $            139,526.58
 $                2,471,136.21
84
 $            143,712.37
 $                2,397,246.55
85
 $            148,023.75
 $                2,316,699.49
86
 $            152,464.46
 $                2,229,162.09
87
 $            157,038.39
 $                2,134,287.41
88
 $            161,749.54
 $                2,031,714.00
89
 $            166,602.03
 $                1,921,065.33
90
 $            171,600.09
 $                1,801,949.19
91
 $            176,748.09
 $                1,673,957.13
92
 $            182,050.54
 $                1,536,663.80
93
 $            187,512.05
 $                1,389,626.30
94
 $            193,137.41
 $                1,232,383.55
95
 $            198,931.54
 $                1,064,455.57
96
 $            204,899.48
 $                   885,342.77
97
 $            211,046.47
 $                   694,525.20
98
 $            217,377.86
 $                   491,461.76
99
 $            223,899.20
 $                   275,589.44
100
 $            230,616.17
 $                      46,322.46


Retirement fund = $3,400,000; Interest per annum on fund = 2%
Age
Amount Required
Amount left
45
 $              45,377.69
 $                3,421,714.75
46
 $              46,739.02
 $                3,442,475.25
47
 $              48,141.19
 $                3,462,220.73
48
 $              49,585.43
 $                3,480,888.01
49
 $              51,072.99
 $                3,498,411.32
50
 $              52,605.18
 $                3,514,722.26
51
 $              54,183.34
 $                3,529,749.70
52
 $              55,808.84
 $                3,543,419.68
53
 $              57,483.10
 $                3,555,655.31
54
 $              59,207.60
 $                3,566,376.67
55
 $              60,983.82
 $                3,575,500.71
56
 $              62,813.34
 $                3,582,941.11
57
 $              64,697.74
 $                3,588,608.24
58
 $              66,638.67
 $                3,592,408.97
59
 $              68,637.83
 $                3,594,246.56
60
 $              70,696.97
 $                3,594,020.58
61
 $              72,817.87
 $                3,591,626.76
62
 $              75,002.41
 $                3,586,956.84
63
 $              77,252.48
 $                3,579,898.45
64
 $              79,570.06
 $                3,570,334.96
65
 $              81,957.16
 $                3,558,145.35
66
 $              84,415.87
 $                3,543,204.07
67
 $              86,948.35
 $                3,525,380.83
68
 $              89,556.80
 $                3,504,540.51
69
 $              92,243.50
 $                3,480,542.95
70
 $              95,010.81
 $                3,453,242.78
71
 $              97,861.13
 $                3,422,489.28
72
 $            100,796.97
 $                3,388,126.16
73
 $            103,820.88
 $                3,349,991.39
74
 $            106,935.50
 $                3,307,917.00
75
 $            110,143.57
 $                3,261,728.91
76
 $            113,447.88
 $                3,211,246.65
77
 $            116,851.31
 $                3,156,283.25
78
 $            120,356.85
 $                3,096,644.92
79
 $            123,967.56
 $                3,032,130.91
80
 $            127,686.58
 $                2,962,533.22
81
 $            131,517.18
 $                2,887,636.36
82
 $            135,462.70
 $                2,807,217.13
83
 $            139,526.58
 $                2,721,044.37
84
 $            143,712.37
 $                2,628,878.63
85
 $            148,023.75
 $                2,530,471.99
86
 $            152,464.46
 $                2,425,567.68
87
 $            157,038.39
 $                2,313,899.87
88
 $            161,749.54
 $                2,195,193.34
89
 $            166,602.03
 $                2,069,163.13
90
 $            171,600.09
 $                1,935,514.30
91
 $            176,748.09
 $                1,793,941.54
92
 $            182,050.54
 $                1,644,128.82
93
 $            187,512.05
 $                1,485,749.10
94
 $            193,137.41
 $                1,318,463.92
95
 $            198,931.54
 $                1,141,923.04
96
 $            204,899.48
 $                   955,764.02
97
 $            211,046.47
 $                   759,611.91
98
 $            217,377.86
 $                   553,078.73
99
 $            223,899.20
 $                   335,763.12
100
 $            230,616.17
 $                   107,249.89

To be on the conservative side, I am looking at having a retirement fund of $3,400,000 (when I'm 45), and all of which must be earning at least 2% interest. That's a very large amount of money to accumulate over 14 years, without forgetting that I still need to fully pay for a house + renovation before 45.

I'm not even 10% near the fund amount! To reach that amount, I will need $250,000 per year. For your information, I earn only a fraction of $250,000. Seems tough arh?

Time to think of ways to achieve this hard goal by 45 years old.

Any suggestions?


Comments

Popular posts from this blog

After 2 years of Sabbatical from Work, THIS IS IT!

I took a sabbatical from the corporate work back in end 2021. It's going to be my 2-year anniversary for my sabbatical. But , it's time to get serious earning money full-time. Here's why... Meeting Passive Income Objective I haven't been working, and my income was mainly contributed by my passive income from dividends/stocks . If it goes as it is, my passive income this year should be about $2000/ month , or about $24,000 a year. This is $6000 up from last year. Going at this rate, I should grow at $6000/ year. Just like GDP which is always reported as an increment rather than at absolute amount, so does passive income growth, doesn't it? The amount of cash that I have, has slowly been used for invested. And to meet the growth target, it's basically increasing the returns, putting more into the investments, or both. At my comfort level, I'm going with increasing the amount invested. This means finding fresh funds. A full-time job should solve this problem

I worked NOT in 2022 - Here's my income report and lessons learnt

It's late January of 2023, and while it seems a bit late to talk about 2022, it's probably a year where I should pen down because it's different from the rest.  2022 was a year where I worked not at all since I graduated, and I wanted to pen my thoughts. For curiosity sake, I typed in my topic into the chatGPT, and this was what it gave: Well, how do you find ChatGPT's year? I would rate ChatGPT's response as highly excellent. If I were some student writing some journal entry just to submit for as homework, I'll probably submit this. But while AI can help us with general task, it cannot be us, unless we feed in enough inputs for it.  So below is my version, of how 2022 was, a year where I worked NOT. My Income For 2022 Below is a chart showing my income for 2022. And they are broadly divided into 3 sources: Interest from bonds (including the Singapore saving bonds, but excluding T bills), dividends and T- bills. My Income for 2022  The 6 months T-bills become

Passive Income Report YTD and Plans forward

I worked not this year, and here's my income for the first 3 quarters of 2023: My income comes from 3 sources: Interest income from T bills,  Interest income from bonds (which includes Singapore Saving bonds and other retail bonds), and  Dividends (mainly from STI ETFs, with some other stocks). This year was an improvement from last year's income ( read here ), not because of what I've done this year, but from what I've  done last year - delayed gratification. Even more delayed gratification, was from the saving I accumulated since I started working.  Grateful to myself for having few material desires.  If $2000 is the minimum survival sum, I probably survived 62.5% of the time. If I average out the 8 months, I met the minimum survival sum on a monthly basis. My goal for this year is to hit $24,000 passive income, and with 66.7% of the year passed, I'm 70% there. June has been the best month to date, and as you can see, it's contributed mainly through intere