We (the 39 year old DINK) did the above and discovered that for myself that working 7 to 9 more years will allow CPF SA meet FRS with annual voluntary SA top up at 7k. For mister it is approx 9 years to reach FRS with annual voluntary SA top up at 7k, not sure if he would like the idea because he does not like having liquid cash locked up, if so it would take 13 years for him to reach FRS.
Even without voluntary SA top up, with our current SA balance and continued employment, we can achieve BRS in 3 to 5 years time. It is an encouraging insight and consolation that we can meet the safety net of BRS at the very least and meet FRS within a decade if nothing goes wrong with employment.
Next we naturally did a projection on how early we can retire – in 10 years time probably age 50, provided we have passive income to cover expenses till age 65 for cpf life payout that will provide combined approx more than 3k SGD minimum monthly.
To achieve 15 years of passive income, 1 million portfolio with 5 percent annualized return is required to cover our expenses from 50 to 65. We are at 50% of our goal now.
Hopefully mm2h option is still available then and we have the choice to retire more than comfortably in Penang from age 51 onwards with potential annual passive income from portfolio and Singapore flat rental combined expected 74k SGD in today’s dollar.
So the short term goal is to :-
– voluntary top up SA 7k annually for as long as possible to enjoy tax relief and accelerate FRS in SA asap
– Continue working with aggressive cash savings of 100k SGD annually which in 6 years at age 46 or 47, the portfolio excluding CPF will reach 1 million, and concurrently investing in the market while keeping 20% cash liquid at all times.
– And it doesn’t harm to work as long as possible even if we reach 1 mill before age 50 coz no one will forgo opportunity to accumulate wealth. If possible we want to work beyond age 50 as long as health and conducive workplace is presented. But we doubt we want to retire at 65 because that is when expected health would spiral much to enjoy substantial amount of activity such as sports or travelling. 55 will be the ideal age, perhaps?
Life is of course not linear and anything can happen between now and then, deviation is probably expected but no planning is definitely a recipe for disaster.
What about you? What are your retirement plans? Do share.