According to Business Insider, Singapore is the 7th most expensive country to live in, and the 2nd most expensive in Asia, “losing out” to only Hong Kong. So, how much do we need to retire? 

Lets assume you are married with a spouse. 

You work until 65, and both retire until age 95, which is the projected standard life expectancy here. 

You should need $1000 each to cover for all costs, including utilities, meals, transport and all other day-to-day expenses. 

We conservative estimate GST in 20 years to be 12%. So 5% more from today, and we set what you need higher at $1050 per month. 

30 years x 2 persons x $1050 per months = $756,000

If you have 2 children, for example, the projected university fees for 3-4 years of education is roughly $50,000 per child, so that brings the sum total of $856,000. 

This $856,000 is an effective though simplistic calculation. A married couple with 2 kids will need this sum in their retirement years. 

It however does not take into account unexpected expense, medical or otherwise, or the need to go overseas for holidays, family vacations and the like. 

If you need help planning for your ideal retirement life, free from worry, chat with us for a thorough and precise calculation.

Disclaimer: Some of the content pertain to information or services from a person or company and is unrelated to Manulife Financial Advisers Pte Ltd (“Manulife FA”). For the avoidance of doubt, such information or services are not provided by Manulife FA and is accordingly indicated. The content does not represent the views or opinions of Manulife Financial Advisers Pte Ltd.

How does the interest rate affect your home mortgage? 

Each month, on top of the principal amount you have to pay off, you are charged a interest rate. There are 2 types; fixed rates and floating rates. 

Fixed rates offer stability, as you pay the same amount regardless of how interest rates fluctuate. It is better for individuals who like to keep their financial commitment consistent. It is also great when interest rates are near all-time lows, that way you can lock in low rates without worrying how interest rates will go in the future. 

Floating rates are pegged to certain specified benchmarks. Going forward, SORA (Singapore Overnight Rate Average) would be the only benchwork for the foreseeable future. You pay the floating rates on top of a fixed Spread, which differs for banks. When interest rates are low, you indeed pay lower, and you will have to pay more when interest rates are high. Individuals who have a positive outlook on interest rates would go for the Floating Rate. 

Not sure how to decide? 

We do offer consultancy services to help our clients choose their best interest rate offer. How do we help you calculate what’s best for you? 

We take these into consideration:

• All current offers from all banks
• Your risk appetite (fixed rate equals fixed commitment) 
• How long you plan to stay in that house
• How long is the lock-in period
• Market conditions and more

If you are not sure how to go about it, schedule an appointment with us. Our discussion is complimentary. We will be happy to help you choose a plan that best suits you.