Officially, I will retired at the age of 62 years old and that is still a long way to go for me. I am approached by many wealth advisor, relation manager, financial consultant and whatever you call them. The story is always the same and will tell me that I will need this "X" amount of sum for retirement. Then they will always say that bank interest is low and that I will likely not be able to retire if I don't invest or start planning and etc.
Yes, the fear of unable to retire is true and can apply to some people. In the past, having more kids are suppose to support you into your retirement. They are like your passive income. Imagine someone who is 70 years old today and have 5 children with each of them giving him 200 SGD per month. Although, it is only 200 SGD, it will be 1000 SGD because it is 5 kids. Furthermore, if the 70 years old is living alone in own HDB, he will be able to rent out a room for extra income. In a way this person will be able to survive post retirement maybe even without touching his saving. Nowadays with many couple only having only about 1 - 2 children, it may difficult to depend on kids for retirement. Furthermore, not all kids are the same and there are instances that the parents have to support their kids even after they retire. With Singaporean getting married later, the kids are likely gonna stay in the parent's house till late and thus the rental income from HDB will come in later.
This is why I have started planning for retirement. I have mentioned previously that F.I.R.E movement is not easy to achieve and thus it will not be my short term goal. On top of that, I do not want to save and save till I am left with money and no memory of life. Thus, per month, I put 20 % into a joint account with my Wife, 5 % for my parents and 25 % for spending. The remaining 50 % will enter my war chest for investment. As for bonus, I will pump 20 % into the joint account, 5 % fo parents and 75 % into war chest. Based on this, I have calculated that if I have salary increment steadily and investment grow at 5 % per year, I will only reach the 1 million mark in Investment after 15 years. The 1 million mark in investment should give me a safe 3 - 4 K passive income per month based on 5 % return per annum. This is not something I expected as 5 % is actually quite an ambitious aim and my contribution to war chest may change depending on situation moving forward.
Thus, I believed this current framework of working and investing will not get me anywhere. I should be looking at other alternative income. Investing is simply not enough. I will require income from another avenue. I have also been tracking my expenses closely for the past 10 months. I will be sharing the break down next year once Nov 2020 and Dec 2020 are over. It will show me how much I have spent and what were they for. From there, I will need to plan the road for subsequent year and toward retirement.