Why hurry to retire ?

Indeed the work income usually constitutes the key contributor to our passive income.

When we started work past 35-year ago, say our salary was $1.8k p.m.

If our salary is now maybe $18k p.m, the compounded internal return (6.8%) would be:

$1,800×1.068^(35) = $18,000 p.m.

At older age whereby one is able to save the full annual salary, ($18,000 x  12) = $216,000;  assume bonuses n 13-mth pay the income taxes, CPF contributions n insurance premiums; whereby esp. that we have no dependents or loans.

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Just to work an extra year, would support your retirement @$3.5k p.m. for 5 years [=($18000 x 12) / (3,500 x 12)].

That's why retirement later, even postponing for one year, can buffer our retirement expenses for 5-years.

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One would ask; your pay so high ! where do you work ?

It can just be an example lah.  Scalable....

Earn more save more; earn less save less n work longer.

It can also be combined household income.

Comments

  1. Mr Ferrari6 February 2023 at 07:01

    Don't be upset. Scalable. Earn more, save more. If less, save less but work longer?

    ReplyDelete

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