How Much Money Do I Need Upon Retirement?

How Much Money Do I Need Upon Retirement?

Anyone can invest asA friend asked me one time how does she know the amount of money she needs upon retirement.

I answered her, I am not an expert but it is really based on assumptions and then we came up with the scenario below.

Assuming,

  • I will retire by age of 65
  • I will spend 2,000S$ (roughly 66k Php) monthly or 24,000S$ (~ 792k Php) annually
  • I will live until the age of 85
  • I don’t have any investment and no source of money when I retire

I will need 480,000S$ (estimated 15.84M Php) not taking in consideration inflation.  It is just a simple math of multiplying 24,000 by 20.  But my first reaction is where to get this amount of money?

So, my friend and I started to think and compute, if I start at the age of 40, I need to save 1,600S$ per month or 19,200S$ per year.

The questions running in my mind are:

  • Is saving 1,600 per month or 19,200 per year doable and realistic?
  • Is 2,000S$ enough given that based on my current circumstances, I don’t have my own house and I will live in the city?
  • Is this money enough given that as we age, we spend more for medicines and hospitalization?
  • Will my savings be enough given that life goes on, I will still need to eat and wear clothes, basically ensuring we address our basic needs and as a social being I still want to travel, spend time with the family and meet up with my friends.
  • What if I live longer than 85, where will I get the money as I only factored 20 years? Does this mean I need to get a job at the age of 85?  As if, someone will employ me hahaha.  By that time, I am sure I am super duper slow already.

Good thing I got introduced to investing 4 years ago and I also saw this wealth calculator in FB one time (though this is in pesos).  I just want to share this wealth calculator I created in Excel which can serve us a guide and compass for us investors.

Wealth Calculator

One thought on “How Much Money Do I Need Upon Retirement?

  1. This is where Simple Living and Minimalism take route. While I am investing I am also paying off my mortgage. Retirement won’t come until the home is payed in full. This will give me the best advantage of achieving a lifestyle in retirement where I can either sell the home and buy either another home without the struggle of paying for housing.

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