Financial Freedom

How Long Singaporeans Are Going To Spend in Retirement & Why Women May Be In Trouble

According to survey findings released by Manulife Asset Management's Aging Asia Research Series, many people in Singapore are underestimating the length of time that they will actually be spending in retirement.

Many Singapore individuals are expecting the retirement period as a married couple to be 19 years when it is actually closer to 24 years. The projected retirement duration was estimated by analysing the mortality rates from Singapore' Department of Statistics.

Elsewhere, other surveys done by other companies have also shown that 4 in 10 Singaporeans want to retire at 55. Four in 10 Singaporeans also have not started saving for retirement. These are all worrying figures. It shows that there is probably a general lack of good retirement planning amongst Singaporeans.

Expected length of Retirement

Retirement and life expectancy is something that is closely linked. Given the longer lifespan of women, women are also likely to outlive their male counterparts by another 11 years. That brings the typical male retirement length to be 24 years and females to 35 years. This assumes a retirement age of 62 years old.

This seems to be a worrying figure as it probably means that most people will have far less than sufficient money to afford an early retirement or even a comfortable retirement.

It also spells trouble for women as they will be spending a considerable portion of their retirement alone, as the sole survivor. And this has deeper implications as women often exit the workforce much earlier to their male counterparts and would thus have accumulated much less for their retirement spending.

The long life expectancy and the inflation rate is also probably some reasons why the CPF Minimum Sum needs to increase to cater for the changing needs of an ageing population.

Retirement Period Longer than Working Life?

Assuming an individual starts work at age 25 and retires at say age 55, they would have only worked a grand total of 30 years. For a male, it would mean he would have to save up enough money to spend for another 24 years while for a female, it would mean she would have to save up enough money to spend for another 35 years (which is even longer than the period of time she has spent in employment).

Many people are probably making all kinds of retirement planning mistakes by making wrong assumptions about their retirement age and the amount they need to save up. If the time spent in retirement is going to be almost as long as your entire working life, one better start planning early and carefully.

Basically, should not wait until they are only 40 or 50 years old before they start saving for retirement. They better start saving for retirement at age 30 or even much earlier. In my opinion, it is good that people start thinking about their desired retirement age and retirement planning as soon as they start working.

Time to Re-think Retirement?

So is it time to re-think retirement? My thoughts on retirement have changed over the years. When I first started working, I thought retirement was something to be desired. But after thinking about it, I have come to view retirement differently. Given the long life expectancy, it is perhaps one remains employed and continue to contribute to society. After all, spending 20 over years in retirement is not going to be fun when you have nothing to do.

For those who are interested, do check out the following links

Articles on retirement, savings, financial planning and investing:

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Commodities/Gold/Silver

Insurance

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Singapore's Best Chirashi-Don

Bara Chirashi Don @ Sushi Tei Vivocity

Chirashi Don or chirashizushi. Some call it diced or slivered sushi scattered in a bowl of vinegared short grain Japanese rice. Others call it "happiness in a bowl".

Basically, this is a dish that comprises slices or sometimes diced up cubes of the freshest raw seafood and which is served on vinegared rice.

To me, freshness is probably the key. The proportion of the various kinds of seafood as well as the portion (neither too big nor too small) also plays a crucial role. My personal preference is to have the seafood diced rather than sliced as it is much easier to eat with the rice. One also cannot help but make mention that the temperature that it is served at also plays a part in the enjoyment of the dish. Too warm and it doesn't really feel right. The rice is also another important factor. When all these come together nicely, what you get is an awesome bowl of indescribable goodness.

If you ask me, the best chirashi-don that I have tasted is probably at Sushi Tei@Vivocity. I have tried the one at Teppei before but I will like to think that I prefer the one at Sushi Tei. At $16 a bowl (see picture above), it is really good value for money.

Do You Earn More Than Singapore's Median Monthly Household Income?

A frequent topic of discussion amongst people in Singapore is whether their household income is more than the median household income.

The Department of Statistics in Singapore publishes a report that is titled "Key Household Income Trends" every year. The latest report is dated 2013.

Some points to note first. The paper only highlights income from work received by all working members of the household from employment and business. This means that it does not include income from dividends, etc.

Some people often mistakenly assume that the figures are the median income of a worker employed in Singapore. It is not. It refers to the household income.

So here are the numbers:

Among resident employed households, median monthly household income increased from $7570 in 2012 to $7870 in 2013. This represents a 4.0% growth in nominal terms, or 1.6% in real terms (where the Consumer Price Index) is used as a deflator to compute real income changes.
Taking household size, median monthly household income from work per household member rose by 5.6 per cent in nominal terms, or 3.2 per cent in real terms.

I make three observations on the median monthly household income figures:

Firstly, we can see that the median household income amongst resident employed households is almost reaching $8,000. However, we also note that resident employed households does not equal to the resident households in Singapore. As many as 9.4% of the resident households in Singapore have no working persons with 6.1% of these considered as "Retiree" households. That means that the data on the median monthly household income is only representative of 90.6% of the resident households in Singapore. Granted that some of these households might be really poor, 6.1% of these households probably have accumulated more assets/wealth/passive income compared to a household that is earning $7870.

Secondly, the survey only relates to roughly 70% of the population in Singapore since the focus is only on households that are headed by Singaporeans and PRs (granted that some of the non-Singapore citizens or PRs might actually be under a household headed by a Singapore citizen or PR). This is because the analysis is only based on households headed by Singaporean and permanent resident (PR). In 2014, the total Singapore population was 5.469 million. The resident population (Singaporean and PR) was 3.87million. This means that t

Thirdly, we should also take note that the source of data is from a sample of households surveyed in the June Comprehensive Labour Force Surveys conducted by the Ministry of Manpower. Based on what I googled, it appears that 30,000 households were surveyed. So this is only a sample of survey results and might not indicate or depict the true picture of the state of affairs.

So if you think that having a household income of greater than $7870 puts you in the top 50% of the Singapore population, think again.

Dividends for October 2014

Another month has passed. Dividends collected for October 2014 was $513.

Main contributors were:
(i) distributions from bond fund
(ii) distribution from ETFs
(iii) OCBC 360 Account (which offers a neat 3%).

Besides that it was the usual from other monthly dividend paying stocks that I hold in my portfolio.

Is the bull market coming to an end?

Lately, after seeing the various stock indices hit their historical highs even amidst the news that the Fed's QE was coming to and end, I started wondering whether the bull market might possibly be coming to an end. One certain sign is the number of people who are probably interested in the stock markets again. We all know for a fact too that this bull run has gone on for some time now. So is this bull market coming to and end?

Some points I consider:

Unemployment rate in US has improved but is still worrying in Europe.
Federal Reserve stopping QE but ECB and BoJ are maintaining low interest rates.
China growth story seems intact.
Stock market still trading around historical P/E ratios.
Oil prices are low which ought to be good for businesses, no?
Investors' interest in stock market and their sentiments.
Low gold prices indicates fear of inflation or hyperinflation is probably low.
"THIS TIME IT IS DIFFERENT" syndrome has not appeared.

From a very rudimentary analysis, it will thus seem that the bull market still has some legs to go. How much longer is anybody's guess. Probably till 2015? What do you think?

Falcao's First Goal for Manchester United Against Everton

So Manchester United won 2-1 against Everton tonight even without the services of Rooney who is out on suspension. Here is Falcao's first goal scored as a Manchester United player:

Angel di Maria's first goal which gave Manchester United the lead is below:

I Didn't Know My Own Strength - Amazing X Factor Performance

Am a semi-fan of X Factor. I like how they spot raw talent. This is an amazing rendition of Whitney Houston's song by Andrea Faustini. I think he does a wonderful version of it. You can check out Whitney Houston's version in the subsequent video below. Which do you think is better?

Happy long weekends!!! (at least for my readers in Singapore)

You can check out other entertaining videos here or here: