Looking forward to retirement in a few years

mummy1234January 8, 2014

Hi, I am new here and joined this forum as I am looking for a retirement forum.

I am currently 38 years old, a female locum GP Dr from Singapore and am looking forward to retirement in few years time. I am married with 2 young boys age 4 and 8 years old.

I would like to share my journey towards retirement and have advice from people who have already retired on life after retirement.

My husband and I were fortunate as we bought our current terrace house at the right time in 2010 with $300k profit from selling off our condominium. It was bought at $1.1 million and over these 3 years has doubled in value which enabled us to buy a semi detached house in Malaysia on full equity loan for $400 k (houses there are much cheaper than Singapore). In 2012, we also bought a small studio condo unit which will be completed soon by 2016 and then we can rent it out.

We hope to pay off our outstanding mortgage on our terrace in a few years time with Central Provident Fund savings and cash savings. Then, the rental from the condo can fund the semi-d in Malaysia and itself while the approx. $5000 rental income from our terrace can finance our monthly expenses when we move to live in Malaysia.

I am very excited at the thought that I will be able to retire or semi-retire soon and it is all made possible because of the good money we can make by investing in properties in Singapore.

Malaysia or Iskandar JB where our semi-d is has a much lower cost of living so we can survive with S$5K a month there. My expenses in Singapore monthly is twice that as the cost of car ownership is high here.

My children can study in an international school which is right outside my gated and guarded semi -d estate.

I will need to save also for a deposit to be made into Malaysia My 2nd Home scheme which mandates that we need to make a deposit of RM $300K which is equivalent to S$120K so prob can only retire in 5-6 years time when I am about 45years old.

Excited and looking forward to that day....

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Looks like spam for Central Provident Fund

    Bookmark   January 9, 2014 at 3:09PM
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I assure you this is definitely not a spam and all true. Anyway, the cpf we will use to pay off our remaining mortgage is only about 100k.
Rest are from savings mostly. I save about 30k per year and husband hopefully will be able to (his job is less stable). We have about 300k savings now and hope to save 200k in 3 to 4 years time. Then with the 100k from cpf we can pay off our mortgage.

    Bookmark   January 9, 2014 at 8:14PM
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Well, good for you. Are you looking for advice, is there a question here?

    Bookmark   January 10, 2014 at 5:15AM
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Just want to know how I should be preparing for retirement and the experiences of those who retired early. Problems that may surface and suggestions for things to do during retirement.

    Bookmark   January 10, 2014 at 7:57AM
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Just want to know how I should be preparing for retirement and the experiences of those who retired early. Problems that may surface and suggestions for things to do during retirement.

    Bookmark   January 10, 2014 at 7:58AM
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Most of us live in the US and our situations legally and financially are probably VERY different than yours.

I believe that Malaysia is currently the only country in the world that regulates financial advisors, requiring them to all be (fiduciary) CFPs.

Your best bet is to run your numbers past a good independent advisor (using software, a minimum of 10,000 Monte Carlo simulations should be done) and get some serious short- and medium-term planning advice.

Good luck to you. It sounds as if you're doing fine, but again, none of us are experts in your situation.

    Bookmark   January 12, 2014 at 1:27PM
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Most Americans associate "retirement" with more than just quitting work. It usually involves aging, a change in how medical costs are handled (Medicare), adult children and their children, new hobbies and activities, as well as money management.

Will your husband continue to work? Looks like you are looking forward to being a Stay-At-Home-Mom with school age children and you are fortunate to have enough income to not need to work.

    Bookmark   January 12, 2014 at 3:10PM
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My suggestion to 65-year-olds is that, as it's better to run out of days before one runs out of dollars ... they'd better plan to fund their lives till age 100.

A couple of months ago I (at 84) asked at an investment group of about 20 that I've attended for better than 10 years, when I was going to die?

After some laughter ... they asked the reason for my asking. Should I sell some investments whose value has appreciated, now, and pay tax at a low rate ... thus paying commission costs out and back in, plus taxes? Leaving me with a reduced amount to invest, but with part (lower rate) taxes paid.

Or leave various investments run, for now ... and at my death, the remaining (small) fund in my individual retirement account would all become income that year ... plus three pensions received monthly through the year (one should arrange to die early in the year, to reduce that amount). Which would leave the executor of my estate to sell off the investments which had appreciated in value, and pay tax on the various capital gains, some at a higher tax bracket ... but the tax liability wouldn't be incurred until then?

With our governments being darn near broke in this part of the world ... they may well raise the rates, or areas, of taxation, in coming years, as well.

The group members couldn't tell me, of course. But it did generate some discussion.

I suggest that from 65 to 100 is seven blocks of five years each, to fund one's retirement. And if one eats up all of the first one-seventh of the asset during the first five year period ... not penny of it remains to work to build more funds in any year after that. So it would be a good idea to stretch the expenditure of that first one-seventh of one's asset over the first ten years, rather than five.

Many people are afraid of the stock market, but quality stocks have mainly done well, over the years. The main issue is volatility of price over the short term, but given ten years or more, there has usually been some growth in value of the asset, as well as the regular income that solid stocks pay, some of them every year, and quite a few an increasing amount over time.

I read some time ago that there hasn't been a twenty-year period in the last 150 or so in which the U.S. stock market averages have suffered losses ... don't know whether that was raw figures, or adjusted for inflation.

Average growth rates have often run about 7-8-10% per year, and in the U.S. many mutual fund managers take 1/5 - 1/6th or more of that as management fee ... in Canada (often charging 2.5% or more) it's more like 1/4 - 1/3.

I bought a stock (one of the recently lower-performing Canadian banks) 47 years ago for $4.17, paying about 10-12 cents per year. Price per share went up, down and sideways, over the years ... but the dividend kept rising in many of those years ... and it came to me at a lower rate of tax. In June of '07 I could have sold it for $107., and it was paying $3.08 per year, at an even lower tax rate, which was raised to $3.48 that fall, an increase of 40 cents ... which was almost 10% of my amount originally invested.

They were rather heavily involved in the U.S. financial fiasco a few years ago, resulting in the price per share skidding down to about $40.00 - but they maintained the dividend.

Since recovered to about $90.00, paying $3.84 per year. If I can arrange to live for a few more years ... maybe it'll pay me the $4.17 original cost, every year! How do you like them apples?

What did I have to pay a mutual fund management company over those years to manage that fund? Not one cent - I owned it directly, outright.

You have about what - 60 years or so, possibly, to provide funding for your retirement?

Learning how money works - an interesting hobby - that pays well.

Tax rules, as well.

Good wishes as you make your plans.

ole joyful

    Bookmark   January 23, 2014 at 3:58PM
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Thanks for yr advice. I understand what you r trying to say that money may run out especially since I have so many more years to go.

Thankfully my job as a locum GP is flexible and pays fairly well so in all likelihood since rental income is unstable, I will prob work partime ie semiretire.

Hopefully, the RTS link between Johor Malaysia and Singapore really gets built by 2019 as stated then my children and I can travel back for school and work cheaply ie without needing an expensive Sg car . My present car costs S$190k compared to a malaysian one which costs S$50k or less. We r not allowed to drive from johor to sg with a msian car unless driver is msian you see ....

Anyway, Johor is a more dangerous place to live compared to sg so it all really depends....perhaps retiring early may remain a pipe dream....though i hope not cause i feel a bit burned out at work...

    Bookmark   January 23, 2014 at 11:05PM
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Sorry to hear of your skating on the thin ice of possible burn-out (or burn-down), mummy ... hope that you can arrange things so that it works toward getting alleviated.

As jkom said, your situation is so different from ours that people in this area can offer little advice. Do you plan to retire in your area, or in this part of the world?

Some difference in the cost of cars in Singapore and Malaysia!

I found your story quite interesting, and hope that you can find the time ... and the inclination ... to continue.

Good wishes to you and yours.

ole joyful

    Bookmark   February 4, 2014 at 7:37PM
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My husband thinks depending on rental income is unpredictable and that we should work longer...sigh...
Anyway, still awaiting State consent from Malaysia pending a bumi release letter from the seller. In Malaysia, there are bumi houses which are cheaper and sold mostly to Malays only. If they cannot sell it to any Malay, then they will release it to Chinese buyers prob at a higher price....anyway, quite a tedious process buying a resale house...been waiting for state consent for months...
Just found out can bring my Sg employed Filipino maid into Malaysia without applying for MM2H so that will save us some money...
Was discussing with hubby last night our many options from retiring as soon as next year to many years later. If we retire next year, will only have about S$2300 to S$2800 passive income but as the exchange rate is 2.62 now, it translates to RM$6000 to RM$7300 which is higher than the average malaysian household income of RM$5000 so maybe we can still survive in Johor. Main thing is my hubby wants my children to continue schooling in Sg so that means we may have to keep our expensive Sg car. Hope to convince him to let them study in Johor international schools but the school fees are like S$700 compared to subsidised rate of about S$400 in Sg. And when my younger one attends primary school, it is only S$11.50 in Sg. Now his childcare fees are high...

Actually, when I first decided to buy JB malaysia house, intention was to rent out for passive income and sell it 10 years later for capital gains to fund my childrens' university. But many pple ssid rental and resale was difficult so we thought of retiring there...but there are many stories of house breakins and robberies too so that also makes me a bit fearful of living there...sigh....
However, many Singaporeans and expats have moved there esp Nusajaya over the last few years to take advantage of the lower cost of living and that has driven property prices up sharply...

    Bookmark   February 5, 2014 at 7:48AM
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Just thought of selling everything now in Singapore and putting the money in a fixed deposit giving 4%pa in Malaysia. It can give me S$5000+ a month now and capital is protected! When time comes for kids university, we can use some of the capital and still have S$3000+ a month to survive.

    Bookmark   February 5, 2014 at 11:13AM
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>>bumi houses which are cheaper and sold mostly to Malays only. If they cannot sell it to any Malay, then they will release it to Chinese buyers prob at a higher price....anyway, quite a tedious process buying a resale house...been waiting for state consent for months... >>

Just curious - are you of Chinese descent? It was my impression from my (rather irregular) scans of Asian political news that Sinophobia is once again a growing problem in Malaysia.

At any rate, you will want to consider having a considerable "margin of error" built into your budget, or as we like to call it in the US, "wiggle room". Just the average rate of inflation cuts your income in half in 20 years. Malaysia has averaged 3.7% inflation over the period 1973-2012, and it's forecasted to be close to 4% again in 2014.

Good luck and hope we hear how you are doing as time passes by.

    Bookmark   February 10, 2014 at 3:49PM
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We just put our Singapore terrace house up for sale to test the market and had our first viewing by a middle aged couple today after we lowered our asking price to valuation which is about 2 million. They seem quite interested and are considering now.

Just had an idea to home school our boys if we retire to JB since we will be so free and can also save costs and assure a certain standard. My boys were thrilled with the idea but hubby was not. Ha ha...

Now cannot sleep thinking about all these. Don't know if I will regret it later if I do sell my Sg home...

    Bookmark   March 30, 2014 at 1:59PM
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Hi jkom51,

So ... it isn't only worms that need some "wiggle room"? Who woulda thunk!

It's a poor day in which one doesn't learn something!

Hi mummy,

Your circumstances are so different that I feel very incompetent about offering advice, for one substantial issue could have such a major v=bearing on the situation that the suggestion given would not be worthwhile ... in fact, detrimental to one's long-term benefit ... even security.

Though I never travelled over 30 miles from home, and helped on Dad's large farm after the hired hands went off to World War II, we later moved almost 2,000 miles for Dad to farm on the prairies, as he had some weakness of lungs and the drier climate on the prairies meant that he had 40 good years, there.

I spent a few years in Korea, mainly helping refugees get their lives re-started, so developed something of an international outlook.

Which I say should guide my investment horizons (I've never owned a home, as I lived in employer-owned homes for a number of years and have lived in 22 locations during my 85 years).

But my investments are about 80% in stocks/stock-based mutual funds, and a few years ago, on a province-wide phone-in asking whether we were better off then 4 years ago (late 2008), I said that I was - and entirely due to my having ignored the general advice that seniors should be heavily invested in bonds and other non-volatile dollar-denominated assets.

I must plead guilty to not eating my own cooking, however, when it comes to investing internationally, as I'm about 80% in Canada.

ole joyful ... library's closing ... 'bye

    Bookmark   May 10, 2014 at 4:46PM
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Got the keys last Saturday finally and brought my maid to clean up the house. Very dusty floor after left vacant for more than a year. Bought our cleaning equipment from nearby shopping centre Jusco Tebrau City where parking is only RM 1 or S$0.40 no matter how long you park. So cheap compared to Singapore where I pay S$10 for 3 hrs sometimes.

Luckily the water supply was not cut off so we could do some cleaning. Probably because water is cheap there too. But electricity is disconnected so we have to go down another day to the office to turn it on.

JB recently changed their weekends to Friday and Saturday so they work on Sundays which is good for me as I then do not have to take leave to go there.

Look forward to sprucing the place up and staying for the weekends once in a while. But will also try to look for tenants in the meantime.

Glad to find my immediate neighbours very friendly compared to Singapore. And even exchanged numbers. As residents are mostly Chinese, feel quite at home here.

    Bookmark   August 11, 2014 at 12:52AM
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This is all too complicated. I say, save your money in cash and live like a miser and be done with it. Then you don't need to pay people to manage your funds and taxes. Just make it as simple as possible. Especially if you really don't have kids to leave it too.

    Bookmark   August 18, 2014 at 6:09PM
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Rented out my 1 bedder condo for S$2200 a month and hoping to rent out my terrace for S$6000 soon, have to await news from my agent for 2 corporate tenants with that budget. Refinancing my loan so may have net passive income of S$4000 or rm$10 000 to retire in JB Malaysia soon...

I have 2 kids to leave my properties to. Doing this partly for them as hope to sell my Singapore terrace when it is time for them to go uni if they need to go overseas....hopefully can sell for over 2 million to finance their uni and my retirement.

    Bookmark   January 10, 2015 at 8:09AM
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