You and your spouse have reach CPF Full Retirement Sum.
Probably have excess to top up to CPF Enhanced Retirement Sum, but not sure if that is a good idea. By right, that should provide a fair bit of income at 65 years old that would hedge your longevity risk.
You should need less from your investments to meet the rest of your spending needs.
But how much is this “lesser”?
Since I am in that age group where most are pondering this question, I will use roughly my own situation as an example.
To be fair, not everyone wants to do this sort of optimization.
Sometimes we all have to realize a question can be phrased in two ways:
- Given what I have can I have enough income to retire?
- How much capital do I need on a conservative level so that I can retire, considering CPF LIFE?
This optimization is to cover number 2 and less about 1. If I have $10 million and my spending is pretty reserved, I don’t think I need to worry about 1.
But does everyone wants to know 2?
I think there would be enough people who are curious and interested.
Timestamp
- 00:00 Start
- 00:00 What is the case study we are planning for
- 03:06 How does Kyith’s CPF numbers look like?
- 09:17 Setting up the initial cash flow plan of spending needs and CPF LIFE income
- 17:30 The most natural early retirement income strategy planning that folks would naturally think of.
- 23:50 What I have in mind as a feasible two-part way of planning considering when CPF LIFE comes online.
- 32:49 The complexity when CPF LIFE Basic and Standard does not provide natural inflation adjustment.
- 35:10 A plan to make your CPF LIFE Basic and Standard inflation adjust.
- 40:10 Adjusting your Investment Portfolio to compensate for a lower initial spending.
- 42:20 Working backwards to how much capital you need for the 2 buckets of income today at 47 years old.
Let me know if you have further questions, and maybe I would address them here, or maybe a video is in order.
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Kyith worked as an IT operations engineer from 2004 to 2019. Currently, he works as a Senior Solutions Specialist in Fee-only Wealth Advisory Firm Providend. All opinions on Investment Moats are his own and does not represent the views of Providend.
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