2021: Life expectancy of Singaporean males and females are 81 and 86 respectively. (as per Singstat Website )
Amos works hard for his money. He has two jobs and invests his money aggressively. He is frugal and eats cai peng only. He doesn't buy drinks when he eats out, always carrying a water bottle. He hacks credit cards deals and is so good at it that he is able to get some cashflow from UOB, standard chartered, citibank, DBS and CIMB monthly. He cycles to work and only spends on what is necessary.
One day, he had an epiphany. What the heck was he working so hard for? He saw his friends driving cars and going on holidays on facebook and instagram. He see pictures of his friends eating perfectly groomed food .They always looked so happy, as though they had a perfect life. Hence he flirted with the idea of some YOLO-ing. However, his parents taught him well. He had to be responsible to his family and not be a burden to them. at least, financially.
He wanted to know how much he needed to have at different checkpoints of his life for his own expenditure only during retirement without leaving anything behind so he knows he is on the right track.
He projected he needed $4,000 per month during retirement. He thinks he can save $24,000 annually till retirement. He believes inflation will be about 2%pa and that he will be able to get a rate of return of 5% pa. He doesn't know when he will die, so he just used 86 yo which is the expected life expectancy of a female in Singapore in 2021. He also doesn't know for sure when he should retire, so he used the retirement age of 63 yo based on the Ministry of manpower.
Based on the calculator below, he should have minimally $201,222 in networth now. This is assuming everything goes according to plan, which is a recipe for disaster.
Fortunately, Amos's Central Provident Fund (CPF) was not tapped for property usage so it is pretty sizeable. CPF funds are not included in the calculations. He has also bought hospitalization insurance to cover part of his medical bills during retirement.
But Amos plans that his plans will go wrong. So he decides to treat the calculated value of expected networth as the bare bones baseline. In addition this does not include any inheritance he would want to give to his dependents. This money is meant to be depleted to $0 when he passes away.