How much must you be earning every month to survive in Singapore, and be able to retire comfortably?

As long as your monthly income is greater than your monthly expenses, and the difference is enough for you to grow your wealth via investments, then you will be able to retire comfortably.

I am going to quote an article that our writer Ming Feng wrote before. You can read the full story here.

Conclusion: It's not about how much you earn, but more importantly how much you save and even more crucial - invest and at what %.

According to a survey done in the year 2014, 4 in 10 Singaporeans will retire by age 55, but majority knows that they will have to work until at least the age of 60. While there may be doubts when it comes to retiring early, it is not entirely impossible.

To illustrate how manageable it is to retire by 55, we would like to demonstrate the magic of compounding interest:

Investor A:

• Age 30
• No initial savings
• Annual interest rate/ return on investments of about 2% (eg. the safest SG Savings Bonds)

With 25 years ahead to save up S$642,816, one will have to save up $2,143 each month as shown above. However, simply with 2% of compounding returns from investments each year, one can save up S$666,487 by age 55 with only $1,800 each month.

Investor B

• Age 35
• No initial savings
• Annual interest rate/ return on investments of about 5% (eg. A diversified researched portfolio of bonds and stocks)

With 20 years ahead to save up S$586,570, one will need to set aside $2,444 each month. With an annual return of 5% on investments, he only needs $1,500 each month to obtain S$624,946 in 20 years, exceeding his target.