All posts by Mickey J

Retiring overseas – where would you go?

As the world’s most expensive city to live in, Singapore is not an easy place to plan for your retirement. Retiring in a less developed country could easily accelerate your retirement plans as you would require much lower monthly expenses. If you could retire in another country, where would you go?

Having backpacked in many countries, there were many occasions when I felt that I could live there for the rest of my life. Here are some of the countries I have visited and my thoughts.

Thailand

Named as one of the world’s most popular countries around the world to retire to by Huffington Post, Thailand is one of the most popular destination for Singaporeans who are planning to retire overseas. It’s even easier with a Retirement Visa that is obtained from the Thai embassy as long as you meet their minimum requirements (which are not that difficult).

Staying in the country’s capital, Bangkok, remains largely affordable in terms of living expenses. Traffic is a little crazy at times during the peak periods just like Singapore but public transport is relatively decent that I don’t see a need to own a car if I were to retire here.

If you are one for the beaches, take your pick at Hua Hin, Krabi or Phuket for a quick getaway on the southern part of Thailand. The beaches and scenery are much better than Sentosa but  I wouldn’t choose to retire by the beach because all of them are hot spots for tourists so the cost of living is a lot higher.

The second largest city in Thailand, Chiang Mai is also worth considering as a retirement destination. At a much slower pace and lower population density compared to Bangkok, Chiang Mai allows one to enjoy a relaxed lifestyle while enjoying the rich culture that the city has to offer.

China

Most would perceive China to be an underdeveloped and dirty country that’s not typically considered as a place for retirement. I would say that this is largely true in Tier-1 cities like Beijing where it’s more crowded and bustling with life. The sky is in a constant haze due to pollution and the roads are dusty.

China’s Tier-2 cities are the diamond in the rough. They are less dense in population and life is much more slower. The Tier-2 cities that I have visited in particular are Chengdu and Xi’an, both of which I fell in love almost instantly. Cost of living is much more affordable and the locals are much more friendlier and apparently less inclined to rip me off.

As someone who is bilingual, the beauty of China is that there’s no language barrier for me in conversing with the locals and many English speaking job opportunities available in China’s growing tourist industry. Imagine working 3 days a week as an English speaking tour guide for foreign tourists to supplement monthly expenses.

Vietnam

I visited Ho Chi Minh City last year for a short trip and didn’t have the chance to visit Hoi An so my inputs are on my experience in Ho Chi Minh. Famous for its busy traffic on the roads, Ho Chi Minh is not exactly the ideal place to retire in if you are looking somewhere quiet and slow pace. Be prepared to learn basic Vietnamese because only the younger generation is able to converse in basic English. The general population that I’ve interacted with, prefer to use the Vietnamese language.

The local food in particular was a big selling point for me. Many local dishes such as Pho and Banh Mi uses fresh vegetables and meats with very little monosodium glutamate (MSG).

Transportation is probably my biggest problem here because I don’t have a driving licence (and don’t fancy getting one) and Ho Chi Minh’s public transportation infrastructure has not progressed beyond old public buses. Other ways of getting around the city is using taxis and motorcycle taxis. Cars and motorcycles are inexpensive compared to Singapore but I hate to be stuck in traffic.

Cambodia

I spent 10 days in Cambodia and the experience was mind-blowing. Though the country has a grim history, I can see its hardworking citizens moving out of its past and into a great future. Almost everyone has a motorcycle or a car so if you are walking along the streets, you are usually alone. That said, the traffic is still not as crazy as Vietnam.

If you plan to be actively working in a job or maybe start your own business, you need to stay in Phnom Penh. But if you are looking for a small town to relax, Cambodia’s second largest city, Battambang is the place to be. Despite being Cambodia’s second largest city, it really is a nice little town to be honest. I love the slow pace and how everyone is all chilled out. I still don’t understand how everyone makes a living here apart from a small flow of tourists every now and then. That said, Battambang has a nice local vibe that makes me want to stay in and chill out. It’s also easy to rent motorcycles and explore the town’s outskirts.

Myanmar

I have a love-hate relationship with Myanmar. When i first arrived in Yangon, the city was very busy and the infrastructure seem rather inadequate for the kind of pace. Accommodation wasn’t cheap by any standards but the street food was affordable. In the night, street hawkers roll out with their makeshift stalls with a few tables and chairs. For 2 USD, you can have a nice plate of rice with 2 dishes, complimentary hot tea and catch a live football match on television. To retire there, you would need to know Burmese language, the official language in Myanmar as I was basically communicating through finger pointing and gestures most of the time. Like most developing countries, you can always count on the young kids who are learning basic English in schools to help you communicate with the locals.

Getting out of the capital, I visited Bagan which was famous for their large number of pagodas. It’s a booming tourist attraction with the locals struggling to keep up with the demand. As such, cost of living is ridiculously priced for tourists while the standard of living are below par. While there is little value to retire in this town, I do see many business opportunities to set up a small cosy hostel, offer bicycle rentals and run guided tours. But how to get around to do it, remains a question as foreigners are not allowed to own land in Myanmar and the laws to lease a property are not very clear.

The gem in the country that I really love is a small town called Inle on top of Inle Lake. Outdoor lovers would be spoilt for choice from cycling out of town to trekking up the mountains, there are lots to do. The town is also not over-populated and the scenery is lovely. I can’t say for sure that I could live the rest of my life in Inle, but I think 3-6 months each year is definitely do-able.

Do you rely on your CPF for retirement?

Have you started planning for retirement?

In the Aviva Consumer Attitudes Survey that was recently conducted, 3 in 10 Singaporeans (31 per cent) over the age of 55 have not yet begun saving for retirement and for those who have started planning for retirement, there was a heavy reliance on their Central Provident Fund (CPF) savings for their retirement funds.

A total of 44 percent of the 1,000 respondents to the survey said that they have not begun building a retirement fund. Of these, 55 per cent were under the age of 34. This means almost half of my peers may not have even thought about retirement. Of those who have not started saving for retirement, 41 percent said they “cannot afford to do so”, while a quarter said they were saving for other priorities, such as their children’s education.

In another survey, the AIA Survey on Middle Class Hopes and Aspirations showed that almost half of their respondents (44%) are worried that their family will not be able to save for a comfortable retirement, including a majority in Singapore (55%), followed by Malaysia (53%) and Thailand (53%).

The low-down on your CPF money

As of 2014, the Minimum Sum that CPF requires you to set aside for your Retirement Account is $155,000. This amount is expected to rise accordingly through the years to account for inflation. If you think about it, what can you do with $155,000 if you had the amount in cash? A major operation in the hospital due to an accident or illness could easily wipe out a significant amount. Even if nothing bad happens to you, just living off $155,000 for your expenses with an estimate of $30,000  per year would only last you a little more than 5 years.

With CPF Life that was implemented a few years ago, the $155,000 in your Retirement Account would be placed in the CPF Life plan in exchange for a projected monthly payout of $1,200 per month for the rest of your life once you reach the drawdown age of 65.

Should I depend on my CPF savings for retirement?

The problem with relying heavily on your CPF savings for retirement is that there are too many variables in play that can mess up your retirement plan. Here are some examples:

  • Minimum Sum increases over time so you need to buffer with more money in your CPF Ordinary Account and Special Account.
  • Monthly payout from CPF Life plan could decrease due to an increase in the population’s mortality age
  • Drawdown age to receive monthly payout from CPF Life is expected to rise to 67

With so many variables that are not within your control, it’s safe to say that relying on CPF savings for retirement is a big n0-no. However, the monthly payout from CPF Life plan is a good complement to your retirement plan because I have yet to find an annuity plan that is able to provide a payout equivalent to CPF Life plan with $155,000.

How much is enough?

I feel that in order to determine how much one needs to retire, there is a need to determine how much expenses one would incur in a year. As with the name of this blog, I intend to retire by the age of 50. As a single individual, it is very easy to calculate my own expenses and make concessions to lower certain expenses. But once you have a family, there are many factors to think about and include into your retirement planning.

But a fact still remains. No matter how your slice it, $155,000 is definitely insufficient for one’s retirement. Instead of relying on the government to provide you a solution, I would rather depend on myself to build a retirement nest that suit my needs.

How would I plan my retirement nest? Look out for future posts where I share more about building my retirement portfolio.

Expense Report: October 2014

I’m so glad that I made it through a full month of expense tracking. Taking a leaf from Mr 15HWW, I started tracking my monthly expenses on an app in my phone. It wasn’t all that difficult to do as opposed to being tedious. It’s all about taking my phone out each time I make a purchase and entering details of the purchase into the phone. If I were to procrastinate and not enter any data for a day, I would have to spend at least an hour the next day, trying to remember what I had done and spent the previous day (age is definitely catching up on me).

Total expenses this month chalked up to $3868.23 (including fixed expenses of $1900.99). The ambitious me would like to reduce the expenses by half, considering half of my variable expenses were one-time spends. With no prior data in hand, this month’s expense report will act as base data for next month’s analysis in order to determine how to improve my expenses.

November’s Cost Management Challenges: Reduce the costs of eating in restaurants to $200 and limit shopping costs to $150.

Transportation: $49

I don’t own a car so this is just a log of my commuting charges on the B.M.W (bus, MRT, walk). Most of the costs this month is from my daily commute on the train, along with a single taxi ride.

Food: $526.19

Like most Singaporeans, my largest variable expense is food. I love good food and tend to spend quite a bit in restaurants. More than half goes into Japanese food ($283.86).

Groceries: $68.25

While my mother cooks most of the time and usually shops for our groceries, I still buy some of the groceries that I need, like fruits and vegetables for juices and salads, yogurt and nuts for snacks, etc.

Shopping: $374

Clothes ($79.90) – I bought a vest from Zara earlier this month. Admittedly, it’s not exactly the best use of money considering that Zara’s clothes are neither cheap nor of the best quality for their prices.

21 year-old single malt whiskey ($215.30) – On the way out of the airport from my business trip in Sydney, I bought a bottle of whiskey from the Duty Free Shop.

Slow juicer ($75) and a glass bottle ($3.80) – A visit to Coles in Sydney made me realised that the packaged juices in Singapore were sold at exuberantly high prices. I had the opportunity to buy a second hand slow juicer (made in China) that was only used twice from a friend of a friend for 25% off the price it was sold on Taobao.

Miscellaneous: $412.70

Charity auction ($400) – My company held a small charity auction and I made a successful bid for a bottle of double barrel whiskey and a bottle of Japanese sake. The prices were high but it’s all for a good cause.

Google app purchase ($12.70) – I paid for an Android app to track my expenses. I could have used it for free but I want the additional features of cloud syncing and database export. It’s pricey but there are other apps that use a monthly subscription model which would cost much more in the long run.

Australia Business Trip: $537.10

I went on a business trip in Sydney, Australia for 10 days this month. Fortunately, most of the expenses on basic items like accomodation and melas were claimed under corporate expenses. For the extra days I have extended for my stay, I stayed in Sydney Central Youth Hostel which costs next to nothing compared to hotels and Airbnb apartments. The only splurge in this trip was having drinks with my colleagues at The Victoria Room but the live performances made it all worthwhile!