Retirement Savings + CPF Life (+ Inflation + Bequest) Calculator Online

In my previous post, I had made demonstrated how to use my online calculator, which you can find it here:
    http://make-money-secrets.blogspot.sg/p/retirement-savings-online-calculator.html
to calculate how much you need to have saved by the time you retire.

I had illustrated for this example using my online calculator, where you need to key in the following:

Amount you would like to withdraw each month in retirement ($):  6000
Annual Interest Rate you expect to earn on savings (in dec., eg 0.03 for 3%):  0.01
Number of years you would like to make monthly withdrawals:  35 

Then, you can click on “Calculate” and the online calculator will give you the output as:
This is how much you need to have saved by the time you retire ($):   $2,125,506.18

I had concluded that: “So in conclusion, if a couple is able to accumulate $2.12 Millions dollars, they would be able to retire at 50 years old with pretty comfortable life-style!
Note that I have not taken CPF Life payout (starting at 65 years old) into account, so in practise a couple need less than $2.12M to retire comfortably if you take into consideration that they will be receiving $1300 pm for man and $1200 pm for women starting from the age of 65 years old!”

Ok, so the issue here is now regarding CPF Life payout.
I have friends enquiring about whether I can also factor CPF Life payout into account in my retirement savings calculator, since CPF Life (which is a form of life-time annuity scheme) is now part and parcel of every retirees in Singapore!

I am glad to say that I had managed to include not only CPF Life payout but also effect of inflation and also considering bequest (i.e. the amount you want to leave to your heirs) into my Retirement Savings online calculator!  You can access my Retirement Savings + CPF Life (+ Inflation + Bequest) Online Calculator here:
    https://make-money-secrets.blogspot.sg/p/retirement-savingscpf-life-calculator.html

Let’s just try my Retirement Savings + CPF Life (+ Inflation + Bequest) Online Calculator by keying in the following parameters:


Amount you would like to withdraw each month in retirement ($): 6,000.00
Annual Interest Rate you expect to earn on your savings (eg key in "3" for 3%): 1.0
Age you would like to retire (Years Old): 50
Amount you want to leave to your heirs (bequest) ($): 0.00
Annual living Inflation Rate you expect (eg key in "2" for 2%): 1.0
CPF Life Payout Amount per mth ($): 2,500.00
CPF Life Payout starting Age (Years Old): 65
Age you expect to live until (Years Old): 85

Then, you can click on “Calculate” and the online calculator will give you the output as:

This is how much you need to have saved by the time you retire (before inflation) ($): Calc.  
$1,525,506.18
This is how much you need to have saved by the time you retire (inflation-adjusted) ($): Calc.  
$2,064,000.00

So, we can see that in order for a couple to retire at 50 years old and to have $6000 per month for retirement (for both’s expenses), you need to save $1.525M (before inflation) and if you factor in inflation (assuming just 1%), you would need to save $1.920M!

Note that I had made following assumptions:
• Assume that both the couple retiring at 50 years old will live only till 85 years old.
• Assume that CPF Life payout for the couple is $2500 per month (being $1300 pm for men and $1200 pm for women if both have the Full Retirement Sum of $161,000 at 55 years old) and that these figures (hopefully) will not be lowered in future.
• Assume that inflation is only 1% (which is on the low side, a more realistic figure should be 2% as used in CPF Escalating Payout plan).
• Assume that the interest/return you would get for your pot of savings to have an average of 1% (which is also on the low side, and I think a more realistic figure can be 2% and above if you have >$1M to invest).

You can play around and change the parameters to those values that suit your situation and you can then plan your own retirement!

With my Retirement Savings + CPF Life (+ Inflation + Bequest) Online Calculator, now you can plan your own finances independently without needing the help of financial planners! (Beware of financial planners! – because some are all out to sell their products rather than to help you plan your finances and advise you appropriately for your retirement!)

Again, you can access all the online calculators that I have developed from this web link URL:
    https://make-money-secrets.blogspot.sg/p/my-online-calculators.html

Retirement Savings Calculator Online - How much do you need to save before you can retire?

Ever thought of retiring early? (Yes, early, like at 50 years old, and not at 65 years old!)

Ever wonder how much you need to have before you can retire?

Have you started planning and figuring out what is the total amount of savings you will need before you can retire?

As a general guide, in order to calculate how much total amount of savings you will need before you can retire, you need to have an idea of how much you need to spend per month during retirement. Also, you would need to estimate how many years you will spend in retirement before you pass away and how much your accumulated capital can still grow while they are being draw-down.

In my previous post, as can be seen here,

http://make-money-secrets.blogspot.sg/2014/11/estimated-cost-of-basic-living-in.html

I estimated that a very basic no frail cost of living in Singapore for a couple would be about $1,348.00 per month, or $674 per person per month (I assume rental costs to be $0 because I assume the couple has a fully paid property).  

I have made available a “Retirement Savings Online Calculator“ here:

http://make-money-secrets.blogspot.sg/p/retirement-savings-online-calculator.html

where you can calculate how much total amount of savings you will need before you can afford to retire.

 Let’s start again with the couple who can survive with very basic no frail cost of living in Singapore for just $1,348.00 per month, so how much would the couple need if they wish to retire at 50 years old?

Ok, using my online calculator, you need to key in the following:

Amount you would like to withdraw each month in retirement ($):  1348

Annual Interest Rate you expect to earn on savings (in dec., eg 0.03 for 3%):  0.01

Number of years you would like to make monthly withdrawals:    35 

 

Then, you can click on “Calculate” and the online calculator will give you the output as:

This is how much you need to have saved by the time you retire ($):   $477,530.39 

So in conclusion, the couple would need about $477 Thousand dollars to be able to retire at 50 years old for a basic no frail cost of living!

Note that in the above, for erring on the safe side, I assume:

(a)    The interest rate you would expect to earn on your savings to be just 1% (something like just fixed deposit interest rate).

(b)    The age by which the last of the couple can live till passing away to be 85 years old (since average age of man is only 80 while average age of woman is 85), so the “Number of years you would like to make monthly withdrawals” = 85 – 50 = 35.

Next, let’s calculate for another scenario, this is the one which most Singaporeans would like to have, a comfortable retirement (not luxury) life-style which most Singaporeans would deem to be pretty good enough for them!

According to Singapore’s household income statistics 2014 (from http://www.singstat.gov.sg/), your household would be top 20% earners if your household income is about $14500 and above.

Also, according to Singapore’s household expenditure statistics 2013, household with that kind of income spends on average about $7000 per month. However, this $7000 pm figure includes spendings on kids and/or parents, so I would say a figure of $6000 per month for the couple’s retirement would allow them to maintain their comfortable life-style.

Ok, using my online calculator again, you need to key in the following:

Amount you would like to withdraw each month in retirement ($):  6000

Annual Interest Rate you expect to earn on savings (in dec., eg 0.03 for 3%):  0.01

Number of years you would like to make monthly withdrawals:  35 

 

Then, you can click on “Calculate” and the online calculator will give you the output as:

This is how much you need to have saved by the time you retire ($):   $2,125,506.18

So in conclusion, if a couple is able to accumulate $2.12 Millions dollars, they would be able to retire at 50 years old with pretty comfortable life-style!

Note that I have not taken CPF Life payout (starting at 65 years old) into account, so in practise a couple need less than $2.12M to retire comfortably if you take into consideration that they will be receiving $1300 pm for man and $1200 pm for women starting from the age of 65 years old!

Also, for somebody who has $2.12M, they can afford to invest diversely and probably can get much better return than 1% from fixed deposit!

I have also made available some other online calculators which you may find them useful, and you can access them at this webpage:

http://make-money-secrets.blogspot.sg/p/my-online-calculators.html