S$500k (RM1.6M) can retire in MY?

How much to retire in MY?

Interestingly, the number is quite similar to retiring in SG, but in MY Ringgits.

A 'S$1.8M figure' was earlier asked in one of the large SG chatgroup if it is possible to retire in SG with this portfolio".

So I blogged on this S$1.8M portfolio, did some basic estimate calculation with 3% cost inflation. 

My conclusion is "Yes it seems very possible. 

Somehow it translates to S$3k per month, and of course RM10k p.m. in MY!"

RM10k! p.m. in MY sure can retire in MY. How many people in MY earns RM10k p.m. income?

~~~~~

Now, as I am taking a break in MY, I free free compute if RM1.8M possible to retire in MY. Not S$1.8M or RM6M hoh!

~~~~~~

Assume one owns a MY property, fully paid.

Annual Maintenance cost to cover Svc Charge, Sinking fund, water n electricity charges, quit rent, fire insurance, water tax, property tax.  

It works out to be RM4k ~ RM6k, depend on State n Development size.  

Yes. it is RM4k to RM6k per year.


If it is RENTAL home, its annual cost would be RM1,500 x 12 = RM18,000 p.a. for a 2-Bedroom annual property rental cost. Again it may vary with State and location.

Like SG private property, sinking fund n Service charge will rise gradually. Somehow the MBMB property n water Taxes are unchanged for past 4 years, according to my record.

~~~~~~

Two approaches to calculate retirement expenses; bottom up or top-down.

Bottom up derives expenses based on one's spending cost. While Top-down allocates a big number to see if it is possible to retire with it.

One thing for sure, don't live poorly but prudently.  

I like to use hybrid of both, know the Basic necessary cost, which is to first cover Home Basic cost (assume RM6k or RM18k p.m. - Home ownership or Rental respectively.

~~~~~

This case, I use RM20,000 per year as Fixed Basic Home expenses; as a home owner. More than the RM18,000, and which is x3 its annual cost of Private Condo maintenance cost !

At current RM3.3 to S$1 rate, a S$500k would be converted to RM1.65M. Instead of RM1.8M; The extra RM165,000 is buffered for car, extra spending... keep it as fats.

~~~~~

Assume we retire at age 60 and Standard Life of 85, 25-year Basic Home Annual expenses would work: RM20,000 × 25 = RM500,000! 

So, RM1,650,000 - RM500,000 = RM1,150,000.

Further put aside RM150,000 as loose-change. Don't be too lean.  

Add more fats. And also to make easy with RM1,000,000 to start with our calculations.

~~~~~

With RM1,000,000,

((1,000,000)÷25÷365) = RM110 per day; (over 25-years).

RM110 a day! Can retire?  Wow!  Can have a buffet meal everyday.

Not surprisingly, it works out to be the magic number RM110 x 30 = RM3,300 per month, quite similar to our SG retirement with S$3,500!

To factor in 3% compounded inflation rate, it works out to be RM52 per day in current value in 25-years time.

RM110 × (1.03^-25) = RM52.50.

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