Instructions

1. Define the Desired Monthly Expense in Today’s Dollar

  • Description: Enter the monthly amount you’d need to cover your basic living expenses, hobbies, and other needs in retirement, based on today’s cost of living.
  • Note: Exclude expenses related to mortgage or loan repayments. The assumption is that by the time you retire, these debts will be fully settled.

2. Years Until Retirement

  • Description: Choose how many years from today you expect to retire.
  • Note: This is based on your personal timeline. Think about when you ideally want to stop working full-time.

3. Expected Retirement Duration (Years)

  • Description: Estimate how many years you plan to live in retirement.
  • Note: Since it’s difficult to predict, you can use your country’s life expectancy as a guideline. For example, you might plan for retirement to last until the average life expectancy for your gender in your country.

4. Inflation Rate (%)

  • Description: Enter the expected annual inflation rate. This will help adjust today’s expenses to what they might cost by the time you retire.
  • Note: Central banks typically target a certain inflation rate (e.g., 2%). Alternatively, you can research the historical average inflation rate for your country.

5. Current Savings

  • Description: Input the total value of your current savings and investments.
  • Note: Include all assets you expect to use for retirement, such as cash, stocks, bonds, CPF savings, and potential proceeds from property sales.

6. Investment Rate During Accumulation (%)

  • Description: Enter the expected average annual rate of return for your investments from now until retirement.
  • Note: This is an average figure, as actual returns will vary year to year. It reflects the growth rate you expect to achieve during your working years.

7. Investment Rate During Consumption (%)

  • Description: Enter the expected average annual rate of return during your retirement years.
  • Note: Similar to the accumulation phase, this is an estimated average rate of return. It reflects the growth rate you anticipate once you’ve retired, considering that your investment strategy might be more conservative during this period.

Define Your Retirement Goals & Set Up a Savings Plan