[To: 'Adam' - Give me a shout out if prefer to be called by another name?]
It looks like Adam's household is made up of a couple, an elderly and a maid. Not sure if there are any children? In contrast, my situation (B) is that of a couple and two children. While the specifics are not the same, there are high similarities - i.e. four persons in the household, close to retirement.
I took the liberty of regrouping Adam's data so that I could make reasonable comparisons.
| Expenditure Item | A | B | |
| Condo maintenance | $ 330 | $ 295 | |
| Car/transport related | $ 670 | $ 594 | |
| Property tax | $ 280 | $ 33 | A's is for 2 condos |
| Utility, broadband, phone | $ 350 | $ 474 | B's includes replacements |
| Insurance | $ 300 | $ 40 | B's exclude Medishield using CPF-MA |
| Food/meals, groceries, households | $ 1,500 | $ 2,392 | |
| Medical | $ 100 | $ 750 | |
| Gifts, clothings, misc | $ 1,750 | $ 2,286 | B's include contributions to parent |
| Donations | $ 150 | $ 53 | |
| Condo maintenance (investment property) | $ 350 | ||
| Maid (to look after elderly parent) | $ 650 | ||
| Maid levy and medical | $ 150 | ||
| Travel | $ 1,500 | $ 2,110 | |
| TOTAL | $ 8,080 | $ 9,027 |
One key difference is that Adam has a second property, an investment property, from which he is earning rental income. And he has a maid to look after an elderly folk.
Adam also mentioned that he owns a car, which he views as essential to ferry the elderly. And he is concerned whether there is enough money to buy a replacement in time to come. This is clearly something he needs to prepare for. Buying a replacement car is a hefty investment, perhaps $100,000? This is an expense that is going to happen once every 9 to 10 years. But as one age, perhaps we would reach a point where it is no longer safe to even drive one? But the removal of car-related expenses (road tax, car inspection, insurance, maintenance, fuel, parking - they really add up!) would be substituted by other public transportation expenses.
Going through the data, I was wondering if I might have missed out something in my insurance. Wifey and I do have Integrated Shield plans, ElderCare plans, and property insurance. But nothing else. With the income stream from our investment portfolios, there didn't seem any reason to need anything else for retirement. With most of it paid via CPF-MA (and therefore not reflected in above), there is little cash involved, for now.
Our medical expenses are higher, as both wifey and I have certain conditions that require regular treatment. That explains the much higher medical expenses compared to Adam's.
My family is probably spending a lot more on food (groceries and meals out) and household expenses. That is something of a lifestyle desire. Or perhaps we are just eating too much and growing fat!? Hah.
Adam's family has been fortunate, investing early in their career in property and shares, and that has paid off. My family started investing late, much of that only in our 40's, in shares and some unit trusts. It was too late to go into properties, but we were lucky to have gotten a decent condo at a fairly low price.
Adam's family is also comparatively more generous with tithing/donations. This is an area I am prepared to contribute more on if my investments pay off.
My family's travel expenses are higher. Perhaps Adam's family travel expenses do not include one or two persons in the household? This is probably seen as a major luxury item. But it is certainly something meaningful to my family, exploring the world around us. For sure, this is an item that some flexibility can be exercised on if financial circumstances vary - especially, during market downturns.
In time to come, my family's expenses will drop significantly once the children are working and eventually, moved out.
In summary, neither hit $120,000 a year, although close to. But with inflation, both surely will soon.
