{"id":1094,"date":"2018-12-05T10:04:06","date_gmt":"2018-12-05T10:04:06","guid":{"rendered":"https:\/\/zestinlife.com\/?p=1094"},"modified":"2024-07-23T01:53:29","modified_gmt":"2024-07-23T01:53:29","slug":"a-million-dollars-for-retirement-anyone","status":"publish","type":"post","link":"https:\/\/www.reubenointernet.com\/index.php\/2018\/12\/05\/a-million-dollars-for-retirement-anyone\/","title":{"rendered":"A Million Dollars For Retirement, Anyone?"},"content":{"rendered":"<figure id=\"attachment_1910\" aria-describedby=\"caption-attachment-1910\" style=\"width: 120px\" class=\"wp-caption alignnone\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-1910\" src=\"https:\/\/www.reubenointernet.com\/wp-content\/uploads\/2018\/12\/EXPLN027.gif\" alt=\"Take Flight\" width=\"120\" height=\"46\" \/><figcaption id=\"caption-attachment-1910\" class=\"wp-caption-text\">Take Flight<\/figcaption><\/figure>\n<p><strong><em>How Much Do You Need to Retire Comfortably is a \u201cMillion Dollar Question\u201d?<\/em><\/strong><\/p>\n<p><em>Let assume you need to have 40,000 dollars a year for each retirement year from the return income of your capital fund.<\/em><\/p>\n<p>&nbsp;<\/p>\n<p>There&#8217;s a simple way to calculate how much you&#8217;ll need to save up, for creating an investment fund before you can retire.<\/p>\n<p>Take your desired annual retirement income, and divide it by 4% (the maximum amount you will withdraw from your investment \/savings fund each year to pay for your living expenses in retirement).<\/p>\n<p>For example: $40,000 \u00f7 4% = <strong>$1,000,000\/-<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p>You will need $1,000,000 Investment Capital to generate an annual income stream of $40,000, to finance your regular expenditure per retirement year.<\/p>\n<p>This expenditure includes food, transport, travel, loan repayments, insurance premiums etc. The average monthly expenditure is estimated\u00a0 to be around $3,333.<\/p>\n<p>Notes:- The following assumptions are made:<\/p>\n<ul>\n<li>Investment vehicle\u2019s dividend yield remains constant at 4% return rate, throughout your retirement years and<\/li>\n<li>Ignoring inflation rate effect on consumer prices.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p>The monthly expenditure of $3.3K is comparable to a person\u2019s income having the median salary of $3,467 (excluding CPF contribution by his\/her employer) in the latest stated median salary of $4,056 from the Ministry of Manpower (MOM).<\/p>\n<p>&nbsp;<\/p>\n<p><strong>The \u201cMillion Dollar\u201d figure will be used as a target amount, a person who wish to have for his\/her Investment Capital Fund prior to year of retirement (at the age of 65). If you could achieve it in a much shorter time, you could retire earlier!<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p><em>The following sections will cover the strategy of building an investment capital by a person in each stated age prior to his\/her retirement, at age of 65, taking into consideration the impact of inflation rate and the anticipated income return to finance his\/her retirement needs. <\/em><\/p>\n<p>&nbsp;<\/p>\n<p><em><strong><u>PLANNING AT AGE 25<\/u><\/strong><\/em><\/p>\n<p>I\u2019m 25 years old and I plan to retire at age 65 with about $1 Million in investment fund<\/p>\n<p>I make $36,000 a year or $3,000 a month<\/p>\n<p>I save $500 (16.67% of my salary) monthly for retirement<\/p>\n<p>I\u2019ve already saved $0 for retirement<\/p>\n<p>I\u2019ll need $3,333 income to fund\u00a0 expenditure each month in retirement<\/p>\n<p>I expect an annual return of 6.0% from my investment fund<\/p>\n<p>Assuming the following:- inflation rate remains at 2.0% throughout the retirement years<\/p>\n<p>I could contribute $500\/- every month without fail.<\/p>\n<p>In 40 years (480 months), the accumulated amount in<\/p>\n<p>retirement fund is $1,000,724<\/p>\n<p>&nbsp;<\/p>\n<p><em><strong><u>PLANNING AT AGE 35<\/u><\/strong><\/em><\/p>\n<p>I\u2019m 35 years old and I plan to retire at age 65 with about $1 Million in investment fund<\/p>\n<p>I make $60,000 a year or $5,000 a month<\/p>\n<p>I save $1,000 (20.00% of my salary) monthly for retirement<\/p>\n<p>I\u2019ve already saved $0 for retirement<\/p>\n<p>I\u2019ll need $3,333 income to fund expenditure each month in retirement<\/p>\n<p>I expect an annual return of 6.0% from my investment fund<\/p>\n<p>Assuming the following:-inflation rate remains at 2.0% throughout the retirement years<\/p>\n<p>I could contribute $1,000\/- every month without fail.<\/p>\n<p>In 30 years (360 months), the accumulated amount in<\/p>\n<p>retirement fund is $1,009,537<\/p>\n<p>&nbsp;<\/p>\n<p><em><strong><u>PLANNING AT AGE 45<\/u><\/strong><\/em><\/p>\n<p>I\u2019m 45 years old and I plan to retire at age 65 with about $1 Million in investment fund<\/p>\n<p>I make $84,000 a year or $7,000 a month<\/p>\n<p>I save $2,250 (32.14% of my salary) monthly for retirement<\/p>\n<p>I\u2019ve already saved $0 for retirement<\/p>\n<p>I\u2019ll need $3,333 income to fund expenditure each month in retirement<\/p>\n<p>I expect an annual return of 6.0% from my investment fund<\/p>\n<p>Assuming the following:-inflation rate remains at 2.0% throughout the retirement years<\/p>\n<p>I could contribute $2,250\/- every month without fail.<\/p>\n<p>In 20 years (240 months), the accumulated amount in<\/p>\n<p>retirement fund is $1,044,789<\/p>\n<p>&nbsp;<\/p>\n<p><em><strong><u>PLANNING AT AGE 55<\/u><\/strong><\/em><\/p>\n<p>I\u2019m 55 years old and I plan to retire at age 65 with about $1 Million in investment fund<\/p>\n<p>I make $108,000 a year or $9,000 a month<\/p>\n<p>I save $6,250 (69.44% of my salary) monthly for retirement<\/p>\n<p>I\u2019ve already saved $0 for retirement<\/p>\n<p>I\u2019ll need $3,333 income to fund expenditure each month in retirement<\/p>\n<p>I expect an annual return of 6.0% from my investment fund<\/p>\n<p>Assuming the following:-inflation rate remains at 2.0% throughout the retirement years<\/p>\n<p>I could contribute $6,250\/- every month without fail.<\/p>\n<p>In 10 years (120 months), the accumulated amount in<\/p>\n<p>retirement fund is $1,029,367<\/p>\n<p>&nbsp;<\/p>\n<p><strong>(The above illustrations are hypothetical and does not represent the return on any particular investment. All investing is subject to risk, including the possible loss of the money you invest.)<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p>Food for thought. Will you do it consistently as above?<\/p>\n<p>&nbsp;<\/p>\n<p>Reuben Ong<\/p>\n","protected":false},"excerpt":{"rendered":"<p>How Much Do You Need to Retire Comfortably is a \u201cMillion Dollar Question\u201d? Let assume you need to have 40,000 dollars a year for each retirement year from the return income of your capital fund. &nbsp; There&#8217;s a simple way to calculate how much you&#8217;ll need to save up, for creating an investment fund before [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":1910,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,11],"tags":[13],"class_list":["post-1094","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-singapore","category-zest-for-life","tag-retirement"],"jetpack_featured_media_url":"https:\/\/www.reubenointernet.com\/wp-content\/uploads\/2018\/12\/EXPLN027.gif","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.reubenointernet.com\/index.php\/wp-json\/wp\/v2\/posts\/1094","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.reubenointernet.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.reubenointernet.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.reubenointernet.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.reubenointernet.com\/index.php\/wp-json\/wp\/v2\/comments?post=1094"}],"version-history":[{"count":4,"href":"https:\/\/www.reubenointernet.com\/index.php\/wp-json\/wp\/v2\/posts\/1094\/revisions"}],"predecessor-version":[{"id":1912,"href":"https:\/\/www.reubenointernet.com\/index.php\/wp-json\/wp\/v2\/posts\/1094\/revisions\/1912"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.reubenointernet.com\/index.php\/wp-json\/wp\/v2\/media\/1910"}],"wp:attachment":[{"href":"https:\/\/www.reubenointernet.com\/index.php\/wp-json\/wp\/v2\/media?parent=1094"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.reubenointernet.com\/index.php\/wp-json\/wp\/v2\/categories?post=1094"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.reubenointernet.com\/index.php\/wp-json\/wp\/v2\/tags?post=1094"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}