My brief conversation with a Sydney taxi driver on his retirement plans
On the way to the Sydney airport for my flight back to Singapore, I had an interesting conversation with the taxi driver who picked me up. Let’s call him, R.
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His life history
R is a 50 year old Australia who used to be a Russian military officer. When the Russian military ordered R to join the Soviet War in Afghanistan several decades ago, R refused and when he was facing corporal punishment for disobeying military orders, he escaped from Russia and seek asylum in various countries. Australia took him and his family in as refugees. The entire family were given Australian citizenship eventually. With no roots and connections, R became a taxi driver to make a living. After a few years, he bought a house near Bondi Beach for less than $30,000.
Present day
Fast forward to today. R has 3 children, all grown up and like most Australians, have moved out to live on their own. His house near Bondi Beach has exploded in value and is currently worth over $2,000,000. R still drives his taxi and earns enough for his expenses and saves a fraction of his earnings.
When we talked about retirement plans, R revealed that he does not plan to drive his taxi in the 3 years time. He plans to sell his house and relocate to a smaller town further away from the city. Houses are much cheaper in the outskirts and R would have more than $1,500,000 to sustain his expenses for the rest of his life.
What about us?
I’m happy for R because it looks like he has a good plan going. I wished him all the best when I bid him farewell after I paid the fare and rolled my luggage into the airport.
When I look at it from a Singaporean perspective, many people are doing the same things as R in Singapore. Selling their homes and downgrading to a smaller home in less central areas, pocketing part of the sales proceeds along the way. Some even relocated to another country with a lower cost of living.
But unlike R, the current generation of Singaporeans don’t have the good fortune of seeing their property values grow exponentially to the stage where they can live off the sales proceeds for the rest of their lives. At the end of the day, we need to think about is how are we going to sustain our living expenses when we retire.
Note: Price references are in Australian Dollars.