How much do you need in order to "retire" in Singapore
When I handed in my resignation letter in April, a few of my friends and colleagues asked if im jumping onboard the great resignation bandwagon. I just laughed because i dont really know what great resignation trend are they talking about until i read this article. I quit because of my own personal reasons and i am not actively looking for a job as well, though i am not completely against taking on interesting opportunities as mentioned in this post. In another words, i quit naked. Nobody seems to belive me on this.
It seems like there is a shift in perspective of what we seek for in life. It used to be work till you die, but now more people are looking at better quality of life vs career advancement. At least, i am 1 of them. I am all for getting out the rat race as soon as possible.
I recently read a post on the forum. The threadstarter was asking how much passive income is required per month in order to retire in Singapore. I replied saying there is no fixed number for it as it is up to the individuals and the type of lifestyle you want when you stop working. There is a alot of advice on this, for example the 25x rule. I quote from this article.
"The 25x rule is a savings guideline for retirement; it says that if you plan to maintain your current lifestyle in retirement, making 4% withdrawals each year for 30 years, you should save 25 times your current annual expenses in retirement accounts."
In a nut shell, if your passive income covers your monthly expenses without eating into your portfolio, you are theorithically good to go and no need to work for another day in the rest of your life. This is all good in theory and paper as it doesnt consider life changing events that will reduce the passive income( global economy issues) or increase monthly expenses.( health issues, new family member and etc).
So the first thing everyone should do before thinking of retirement is to calculate your monthly expenses and also what other good to have you want in your life, like going for holidays to europe twice a year or simply just 1 holiday in the region per year. Do you want to eat at atas restaurants every week or happy with eating at hawker centres all the time. For me, i am a hawker centre person, not that i want to save money, i just prefer the food from hawker centres.
I have personally tabulated my monthly expenses to be around 3-3.5k per month. I am a very low maintenance guy.
The table below shows the theorithical number (based on the 4% rule) for your portfolio if you are looking at retiring/stopping work for a prolonged period of time. Bear in mind, this is very much just a guideline. Depending on how your portfolio fares , you could theorithically make it a 5% rule or even a 6% rule and the quantum becomes lower. I personally wouldnt go higher than 5% to have a comfortable buffer in case of emergencies.
So, there you go, this can be a reference of when you can theorithically retire based on popular guideline on achieving FIRE. What is your yardstick for retirement or FIRE? Happy to know so we can learn from each other!
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