02 August 2011

What is your desire retired age range?

In an online survey done recently in Jack Phang Investment Group, more than 50% of the voters would like to retire at the age 50 or below. The pool of the voters are in the age of 20s and 30s. In another survey, most of the voters require more than 500K and above to enjoy the retired life. Let us do some calculation on this:

Let's say you are 30 year old, and you are Single (without financial burden) and you require 500K for you to retired at the age of 50. From 30 years old to accumulate your wealth to 500K until the age of 50, you have about 20 years to do so, or in another word, you can save 25K a year until 50 years old. If you have a lifespan until age of 80, then you have 30 years to rely on 500K, means that the yearly expense for you is probably 16.7K or 1,389 a month. In today context, you are hardly to survive if you only have about 1.4K to spend a month, not to mention 20 years later. Inflation will eat up your purchasing power and you could probably have less than 1K to spend after deducting the inflation affect. Hence, my suggestion to you is to have at least 3M retirement fund.

How do we get 3M fund? It is impossible from the salary income alone. You have to set aside a large portion of your money to invest in the long term investment assets, so that you can achieve financial freedom at the age of 50 or earlier. I always believe that we can achieve that figures if we know how to invest in the correct asset classes in the correct way in the correct timing.

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