16 May 2019

How Much Do We Need in Retirement?

When you start getting old (older), you start thinking about this kind of question. But really, should start thinking early. The trick is to start early. Very early. I've been thinking about this a lot more. And it's a pity I started late.

Anecdotally, it seems like a comfortable retirement lifestyle will require $3,000 per month.  That's a number I came across a couple of times.

Of course, if I'm going to live a retirement drinking only tap water, living on a remote isolated kampung on a distant island, and eating fish fished from the sea everyday cooked any number of ways, maybe I need a lot less. But that's not the kind of lifestyle I'm thinking of.

For a couple, that works out to $6,000.  And for each additional dependent, a.k.a. kid, that's $1,000 each. I've been tracking our expenses down to the last cent, and it is surprisingly accurate.

BTW, it is quite easy to keep track of expenses when all your spending either appear in your bank accounts or credit card bills. I use very little cash. That's the trick. Go SMART NATION!

So, for a family of four, that works out to $8,000 monthly, or $96,000 annually. Circa 2019.

DOES NOT INCLUDE EXPENSIVE HOLIDAYS OVERSEAS and other loan commitments (e.g. housing, car, etc).

Stacking on $24,000 for holiday expenses, that's $120,000 per year.  Those are numbers for my family at least. 

What works for you?


Anonymous said...

You must be kidding.

Do you really think that it is common for a Singaporean family to have a nett income (cold hard cash) of $96,000 per year today ?

You sounds like someone telling me, I have a car, my wife has car, everybody has a car .... out of touch with the real world.

Createwealth8888 said...

Median household income in 2018 excluding CPF is about $8K

Edwin Dai said...


You are describing FATFIRE, which I calculated requires about 3M in AUM to sustain.

Lizardo said...

For a typical family, especially one that is still in the early years, clearly no. But for a family unit with the husband and wife nearing retirement, that has spent years working hard, consciously building up, ready to FIRE, maybe? Is this for an average family? Not sure.

So if a median monthly household income is $8k, would your sense be that it also suggests a retirement income need of the same amount?

And yes, definitely FAT FIRE in this instance.

Createwealth8888 said...

I still prefer to base on past household expenses and estimate how much is enough and also factoring future inflation rate.

Anonymous said...

You are living a high life. Ok if you can afford but I think its way too much. My family of 4 can live on $3K a month quite comfortably, with no debts no car.

Anonymous said...

This post will not be very useful to the average Singaporean family. This is FAT FIRE as mentioned by others. If you are able to earned that much and maintained that lifestyle so far, i do not think you need much advice from the online community. It sounds more like boasting your FAT FIRE lifestyle than you truely needed any advice.

Anonymous said...

I believe that it is always wise to plan for more than you actually need in retirement to handle the unknowns that life sometimes throws at us. Retirement can be a long journey with many unknown unknowns. If you retire at 60 and live till 85, that is a good 25 years to plan for!

When planning for my retirement, the numbers can be scary, but the maths dont lie. I am currently in my late 50s and staring at retirement in 2 years time.

I am planning for a budget of $7K pm for wife and I in retirement. In a year, that would be $84K
Over 25 years and with just a 2.5% inflation rate per year, I would be spending over $2.87M

And that amount should not include my home! Otherwise we would have to sell our home and downgrade to the elderly flat.

Is $7K a month expense a luxurious (high life) lifestyle? I see it as a comfortable lifestyle but certainly not a high life. When travelling, still have to fly budget or economy. Cannot afford a car. If want to own car, have to add $150,000 or more to the $2.87M

And at the end of it, only left the house to bequeath to next generation.

Lizardo said...


Thanks for sharing that view.


Nice to hear that your family is comfortable and well living off $3k a month, with no debts to worry about. Nice!


Guess the targets would be different for families with different needs and wants. There are different assumptions in each case. Not about boasting, but only sharing a point of view and seeking to hear how others do it. There's always something to be learnt.


Better to be safe than sorry. I'm with you on that thought process. Interesting that your targets are similar - i.e. your target of $7k/mth for husband and wife. While mine is $8k/mth for FIRE (or FAT FIRE), it would only be $6k+/mth as a baseline need once the 'kids' move out, or $8k/mth if I include budget overseas holidays. Figures are today's value before inflation. What is comfortable for one could be viewed as luxury by another though.

temperament said...

It all depends U are born with a silver spoon or just a spade.

If born with silver spoon will be very hard to learn how to use a spade, ever.

I only need 1 to 1and1/2 half meals now to keep a normal health at 71.

Hmm.... What else do i need since I am born with a spade?

Don't compare to what others have, U just live to what U have, can be sleeping soundly nightly Liu.

Lizardo said...


Fascinating that you're going with 1.5 meals. I have a few colleagues in their 50's who go with only two meals a day. It does keep the calorie count down to maintain weight.

I presume you are retired. How does a typical week/day for a retiree look like?

temperament said...

I actually had stopped working at 53.

Has been "following" the market since 1987or88.

Now growing lazier and lazier tracking my Barang, Barang. As I grow older not so keen in doing it as before. Maybe i know subconsciously when i leave here, everything have to be left behind. Yet I am still the same. Aka still only spend if value for money. Maybe habits die heart.

I don't know about others, I find time passes very fast day to day. i suppose i feel the other side of life nearer than this side, say the Chinese.

Maybe because I am blessed and can sleep well, every night though i do have something to worry for life, i learn to accept it in my faith..

Because there are a lot of things in my faith beyond human understanding one.


Lizardo said...


Fascinating to say the least. Nice to be able to sleep well.