I was looking at https://www.my15hourworkweek.com/2021/04/13/the-six-steps-of-the-wealth-ladder/ (again), and thinking that I have probably secured my family's financial security. The family's net worth have reached a point (currently about 10x annual expenses) where I think we will be able to maintain our current lifestyle (till the kids start working, and by then CPF Life will soon kick in) even if I got retrenched and forced to take a lower paying job.
This is a post that I constantly re-read to motivate/remind myself.
I am highlighting the most important paragraph to me here.
The trinity study assumes a retiree will:
- never earn any more money through part-time work or self-employment projects
- never collect a single dollar from social security or any other pension plan
- never adjust spending to account for economic reality like a huge recession
- never substitute goods to compensate for inflation or price fluctuation (vacation in a closer place one year during an oil price spike, or switch to almond milk in the event of a dairy milk embargo).
- never collect any inheritance from the passing of parents or other family members
- and never do what most old people tend to do according to studies – spend less as they age
It tells me that 25x annual expenses is very safe to retire on. Let's hope I will really dare to retire then!
*I have reached FRS for my CPF and working towards FRS for J. Upon the age of 55 (16 and 19 years away), I fully intend to top up both CPF to ERS such that we can each have a draw down of $2k (in today's money) when we hit 55.
Sad to say, 25X only works for the US or Canadian retiree and the Trinity study has a few conditions that are dangerous to extrapolate to Singapore's context without adaptation. 33X is probably a better figure to aim for.
ReplyDeleteVanguard's updated 4% rule: https://personal.vanguard.com/pdf/ISGFIRE.pdf
ReplyDeletethank you
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