Another interesting article on typical Singapore's retirees expenditures can be read at this URL...
To summarize, some interesting facts are:
* Retirees spend a few thousand dollars at the most each month; more typically, the amount is a moderate $1,000. Perhaps, needs are simpler when one is older. The statistics debunk a fashionable assertion that "even $1 million is not enough to retire on" or that you must target to have retirement income which is 70 per cent of your last drawn income.
* Even for the wealthiest who spend $2,000 a month, they do not need millions in the money pot - just a $600,000 blue-chip and bond portfolio giving a 4 per cent yield, for example.
* Whether future retirees can spend as little as the current batch is a question mark.
* In absolute terms, the typical retired person spends little, but is buffeted by considerable inflation.
* According to the report, individuals in typical retiree households spending $720 a month experienced a 5.3 per cent inflation rate in the last 10 years.
* CPF Life, assuming a full 2015 Minimum Sum of $161,000, provides a monthly income of about $1,300 a month for life from age 65. But at a 5.3 per cent inflation rate, a typical retiree's spending will balloon beyond $1,300 a month after just 12 years.
* The inflation rate of 5.3 per cent is also more than what most conventional insurance instruments can match, or even what the CPF itself provides.
* On average, retiree households in four-room flats spend $1,500 a month, but get $1,230. Those in five-room flats spend $2,000 a month, but get $1,800. Those in three-room flats, condominiums and landed properties spend less than what they get.
* Another interesting tidbit is that retirees living in three-, four- and five-room flats are earning about $200-300 a month in investment income.
* Thus, for the current batch of Singaporean retirees, the picture does not look grim by any means. They are likely to have some resources, in the form of their flat or investments. They are thrifty and do not spend much.
* Still, a large proportion of retiree households' support comes from relatives and friends not living with them, presumably their children; the social fabric is still strong. Contributions from relatives and friends not living in the same household amount to $300-700 a month for most retiree households.
Showing posts with label retirees. Show all posts
Showing posts with label retirees. Show all posts
Saturday, November 15, 2014
Thursday, October 9, 2014
New survey gives snapshot of typical retiree households
An interesting article I read recently on "New survey gives snapshot of typical retiree households" which you read at this URL...
shed interesting new facts and information retiree households in Singapore.
To summarize, some interesting facts are:
* A typical retired household here draws a monthly income of $1,735, half of which comes from investments and contributions from family members or friends.
* A retiree household living in a three-room flat spends an average of $1,000 every month, of which a third goes to food and another third to housing, utilities and health expenses.
* Retiree households are also spending more every month. They shelled out an average of $1,700 last year, compared to $1,300 five years ago. However, the bottom fifth of these households spent only $480 a month, compared to $4,120 for the top 20 per cent.
shed interesting new facts and information retiree households in Singapore.
To summarize, some interesting facts are:
* A typical retired household here draws a monthly income of $1,735, half of which comes from investments and contributions from family members or friends.
* A retiree household living in a three-room flat spends an average of $1,000 every month, of which a third goes to food and another third to housing, utilities and health expenses.
* Retiree households are also spending more every month. They shelled out an average of $1,700 last year, compared to $1,300 five years ago. However, the bottom fifth of these households spent only $480 a month, compared to $4,120 for the top 20 per cent.
Thursday, September 18, 2014
Most Retirees Manage by Adjusting Lifestyle to Reduced Income
Forget about those preaches about needing to have enough retirement fund to cover pre-retirement expenses during retirement! Latest findings, as reported in this following article on "Most Retirees Manage by Adjusting Lifestyle to Reduced Income" at this URL...
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Despite Curve Balls, Most Retirees Manage
The Key: Adjusting Lifestyle to Reduced Income
By TOM LAURICELLA CONNECT
Sept. 6, 2014 8:18 p.m. ET
Rob Shepperson
And now for a little good news.
Most of the stories we read about retirement planning tend to be dominated by "unpleasant realities" and savings goals that can seem like Mount Everest. And then … the brakes go out on the car again.
Indeed, many people head into retirement with little money and little planning. And life has a way of throwing financial or health-related curve balls even when we have planned ahead or think everything is under control.
But the reality is that most people simply find a way to adjust.
Roger Burdette, a married 67-year-old living in Great Falls, Va., is a retiree who didn't let planning go by the wayside. In his mid-50s, he started tracking how much he would need to live the lifestyle he wanted once he could walk away from the office.
But his investments took a beating during the financial crisis and have been slow to recover. When he retired a year ago from a job as a computer-systems engineer, he realized that if he wants to make his savings last, he needs to live on a tighter budget than he had hoped.
"You think back to when you go to college and you don't have a lot of money, so you've got to find ways to make it go farther," he says. "It's the same approach for retirement."
Mr. Burdette's views found their way into a recent sampling of retirees published by T. Rowe Price Group, TROW -0.28% the mutual-fund company. The survey focused on individuals who had stopped working in the past one to five years and who had a 401(k) plan or an individual retirement account that had been rolled over from a 401(k).
Fewer than one in five said their postretirement income matched their pre-retirement paycheck. Instead, on average, their retirement income was just 66% of what they had been making. "There's a focus on whether you should target 80% or 85% of your pre-retirement income," says Anne Coveney, a vice president at T. Rowe Price. But she says it was a "reality check" to see 52% of respondents say they were getting only 41% to 80% of pre-retirement income.
Along the way, 40% said they have discovered that they can adjust their lifestyle to match their income by a "great deal," and 37% agreed that the same term applied to the statement: "I don't need to spend as much as I did before I retired to be satisfied."
David Hartness, chief client officer at Iron Gate Partners in Wilmington, N.C., says that when clients have to make adjustments, he urges them to consider a big-picture question: "Take a step back and ask, 'What are the most important things in this new season of life?'
Usually, the biggest drain on retirement budgets is housing. Mr. Hartness suggests to some clients that they look beyond just selling a big house and buying a smaller one, and consider renting.
"There are a lot of places where you can rent and have full amenities like a country club," he says, without having to be responsible for the upkeep of a house.
He also has found that many clients can drop the hefty bills that come with golf-club memberships and still get in plenty of tee time. He tells of one client who dropped her membership and has ended up playing more golf since, as friends have invited her to join them.
In the background, current retirees don't have to be as reliant on their savings as will likely be the case in years to come. Vanguard Group released a similar survey of retirees with investment accounts this year and found that 20% of household incomes in its sample were coming from pensions and 28% from Social Security.
"Everyone is talking about the new retirement," where retirees have to fund their lifestyles out of savings, "but it's not here yet," says Steve Utkus, director of Vanguard's Center for Retirement Research.
Mr. Burdette uses Social Security income as the base for his budgeting and has tried to adjust his fixed expenses down to match what he gets from the government.
Downsizing to a small house is central to his revised plan. "We're going to have to live a little more modestly," Mr. Burdette says.
He's also looking at holding on to his current car longer than might have otherwise been the case.
But all told, Mr. Burdette counts himself as satisfied in retirement, having turned a hobby of numismatic research into an area to which he can devote more time.
In the T. Rowe Price survey, some 90% of respondents said they are "very satisfied" or "somewhat satisfied" with their retirement. Of course, many people do struggle, especially when retirement is forced on them earlier than expected for health reasons. And the T. Rowe Price survey found that unmarried women among respondents tended to have a harder time making ends meet.
But for the most part, says Ms. Coveney, "retirees are making it work and being flexible with their spending in the early years of their retirement."
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Despite Curve Balls, Most Retirees Manage
The Key: Adjusting Lifestyle to Reduced Income
By TOM LAURICELLA CONNECT
Sept. 6, 2014 8:18 p.m. ET
Rob Shepperson
And now for a little good news.
Most of the stories we read about retirement planning tend to be dominated by "unpleasant realities" and savings goals that can seem like Mount Everest. And then … the brakes go out on the car again.
Indeed, many people head into retirement with little money and little planning. And life has a way of throwing financial or health-related curve balls even when we have planned ahead or think everything is under control.
But the reality is that most people simply find a way to adjust.
Roger Burdette, a married 67-year-old living in Great Falls, Va., is a retiree who didn't let planning go by the wayside. In his mid-50s, he started tracking how much he would need to live the lifestyle he wanted once he could walk away from the office.
But his investments took a beating during the financial crisis and have been slow to recover. When he retired a year ago from a job as a computer-systems engineer, he realized that if he wants to make his savings last, he needs to live on a tighter budget than he had hoped.
"You think back to when you go to college and you don't have a lot of money, so you've got to find ways to make it go farther," he says. "It's the same approach for retirement."
Mr. Burdette's views found their way into a recent sampling of retirees published by T. Rowe Price Group, TROW -0.28% the mutual-fund company. The survey focused on individuals who had stopped working in the past one to five years and who had a 401(k) plan or an individual retirement account that had been rolled over from a 401(k).
Fewer than one in five said their postretirement income matched their pre-retirement paycheck. Instead, on average, their retirement income was just 66% of what they had been making. "There's a focus on whether you should target 80% or 85% of your pre-retirement income," says Anne Coveney, a vice president at T. Rowe Price. But she says it was a "reality check" to see 52% of respondents say they were getting only 41% to 80% of pre-retirement income.
Along the way, 40% said they have discovered that they can adjust their lifestyle to match their income by a "great deal," and 37% agreed that the same term applied to the statement: "I don't need to spend as much as I did before I retired to be satisfied."
David Hartness, chief client officer at Iron Gate Partners in Wilmington, N.C., says that when clients have to make adjustments, he urges them to consider a big-picture question: "Take a step back and ask, 'What are the most important things in this new season of life?'
Usually, the biggest drain on retirement budgets is housing. Mr. Hartness suggests to some clients that they look beyond just selling a big house and buying a smaller one, and consider renting.
"There are a lot of places where you can rent and have full amenities like a country club," he says, without having to be responsible for the upkeep of a house.
He also has found that many clients can drop the hefty bills that come with golf-club memberships and still get in plenty of tee time. He tells of one client who dropped her membership and has ended up playing more golf since, as friends have invited her to join them.
In the background, current retirees don't have to be as reliant on their savings as will likely be the case in years to come. Vanguard Group released a similar survey of retirees with investment accounts this year and found that 20% of household incomes in its sample were coming from pensions and 28% from Social Security.
"Everyone is talking about the new retirement," where retirees have to fund their lifestyles out of savings, "but it's not here yet," says Steve Utkus, director of Vanguard's Center for Retirement Research.
Mr. Burdette uses Social Security income as the base for his budgeting and has tried to adjust his fixed expenses down to match what he gets from the government.
Downsizing to a small house is central to his revised plan. "We're going to have to live a little more modestly," Mr. Burdette says.
He's also looking at holding on to his current car longer than might have otherwise been the case.
But all told, Mr. Burdette counts himself as satisfied in retirement, having turned a hobby of numismatic research into an area to which he can devote more time.
In the T. Rowe Price survey, some 90% of respondents said they are "very satisfied" or "somewhat satisfied" with their retirement. Of course, many people do struggle, especially when retirement is forced on them earlier than expected for health reasons. And the T. Rowe Price survey found that unmarried women among respondents tended to have a harder time making ends meet.
But for the most part, says Ms. Coveney, "retirees are making it work and being flexible with their spending in the early years of their retirement."
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