S’poreans’ retirement funds enough for only 13 years: DBS survey

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#1
New survey finding from DBS. The "perceived" retirement fund is slightly more than half a million, and monthly retirement income of S$3,500 a month. The retirement sum is insufficient, as concluded by the survey. It seems the "safer" amount should be close to 1 million, as always advocated by financial advisers. Big Grin

S’poreans’ retirement funds enough for only 13 years: DBS survey

SINGAPORE — The amount of money that emerging affluent (EA) individuals in Singapore intend to set aside for their retirement will last them only about 13 years, based on their expected expenditure after they leave the workforce, a new survey by DBS has revealed.

The survey released yesterday showed that 73 per cent of respondents planned to retire at between 55 and 65 years old with savings of S$571,715, on average. More than 85 per cent said they expected to live on a retirement income of S$3,500 a month for the next 15 to 20 years or more.
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http://www.todayonline.com/singapore/spo...dbs-survey
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
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#2
Using CPF Life as an example. If $155,000 is able to generate $1,200 per month from 65 onwards for life, simply multiplying by 3 will get me $465,000 and $3,600 respectively. So why is $571,715 insufficient?
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#3
Is not surprising but still understated as it does not considered inflation. I added this in another thread. If your expense hits 4K monthly, even a million dollar can only last roughly 15 years. This is due to inflation that requires increasing monthly amount over the years. And without much investment or gains.

Just my Diary
corylogics.blogspot.com/


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#4
The survey targeted at the emerging affluent (EA) individuals, not the ordinary man in the street. IMO, to live on a retirement income of $3500 per month per person is pretty comfortable. That works out to an average of about $116.6 per day. So if these EA individuals can spend wisely, and perhaps do away with some luxurious, I think the money will last them much longer.
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#5
(03-07-2014, 10:02 AM)Ben Wrote: The survey targeted at the emerging affluent (EA) individuals, not the ordinary man in the street. IMO, to live on a retirement income of $3500 per month per person is pretty comfortable. That works out to an average of about $116.6 per day. So if these EA individuals can spend wisely, and perhaps do away with some luxurious, I think the money will last them much longer.

3.5K for emerging affluent ? Maybe just enough for condo installments.

Just my Diary
corylogics.blogspot.com/


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#6
(03-07-2014, 09:59 AM)egghead Wrote: Using CPF Life as an example. If $155,000 is able to generate $1,200 per month from 65 onwards for life, simply multiplying by 3 will get me $465,000 and $3,600 respectively. So why is $571,715 insufficient?

believe it or not, CPF life is cheap and more efficient because it is a national scheme(the scale) and stable premiums. However, it can only provide a very low initial value for such return, or it is not sustainable.

No other annuity insurance can have such scale. Just as MediShield is cheap, no other health insurance can have such stable premium or the scale.
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#7
(03-07-2014, 10:09 AM)freedom Wrote:
(03-07-2014, 09:59 AM)egghead Wrote: Using CPF Life as an example. If $155,000 is able to generate $1,200 per month from 65 onwards for life, simply multiplying by 3 will get me $465,000 and $3,600 respectively. So why is $571,715 insufficient?

believe it or not, CPF life is cheap and more efficient because it is a national scheme(the scale) and stable premiums. However, it can only provide a very low initial value for such return, or it is not sustainable.

No other annuity insurance can have such scale. Just as MediShield is cheap, no other health insurance can have such stable premium or the scale.

I concur. There are few major differences

CPF life will start with 10 years of accumulation, before the claiming, IIRC. Furthermore, the larger scale and the "subsidies" from those pass away earlier, help to reduce the initial sum.
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
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#8
Simply put, de-accumulation phase of life is not easy to manage if you have not collected your $$$booty enough to be "rich" during your accumulation phase.
If your booty at "Chiat Kaki" time can't generate income more than your annual expenses + inflation, you have to do belt tightening. Your principle will be eaten into.
There is no 2 ways about it if you don't want to run out of money before running out your life.
WB:-

1) Rule # 1, do not lose money.
2) Rule # 2, refer to # 1.
3) Not until you can manage your emotions, you can manage your money.

Truism of Investments.
A) Buying a security is buying RISK not Return
B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return.

NB:-
My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore.
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#9
Many of the rising cost is under control/partial control by the gov. Eg medical, housing (which the gov realise the rising hdb is doing more harm than good, and thus not removing the curb), transport. So we have to be mindful how the future government want to manage the cost structure, when determining the retirement funds. Of cos gov will likely be in favour of inflation rather than deflation.
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#10
(03-07-2014, 10:23 AM)CityFarmer Wrote:
(03-07-2014, 10:09 AM)freedom Wrote:
(03-07-2014, 09:59 AM)egghead Wrote: Using CPF Life as an example. If $155,000 is able to generate $1,200 per month from 65 onwards for life, simply multiplying by 3 will get me $465,000 and $3,600 respectively. So why is $571,715 insufficient?

believe it or not, CPF life is cheap and more efficient because it is a national scheme(the scale) and stable premiums. However, it can only provide a very low initial value for such return, or it is not sustainable.

No other annuity insurance can have such scale. Just as MediShield is cheap, no other health insurance can have such stable premium or the scale.

I concur. There are few major differences

CPF life will start with 10 years of accumulation, before the claiming, IIRC. Furthermore, the larger scale and the "subsidies" from those pass away earlier, help to reduce the initial sum.

Understand. The DBS survey simply took $571,715 divide by $3,500 to arrive at the number of years without adjustment for any return, etc. I would expect a bank to put more considerations into such calculations before making statements about adequacy.
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