I find it hard to prepare for retirement and/or save up like what my peers or people on this community are doing, when I am trying to support my parents' retirement on top of everything. Any advice? - Seedly
Seedly logo
Seedly logo
 

Retirement

Savings

Lifestyle

Family

Anonymous

Asked 2w ago

I find it hard to prepare for retirement and/or save up like what my peers or people on this community are doing, when I am trying to support my parents' retirement on top of everything. Any advice?

Personally, my expenses (food, transport, insurance, non-existence entertainment) add up to around below $700 each month. I had seen how some of you mentioned that you are able to save up and invest $1.5k per month, and I realised that I am unable to achieve that without compromising on something, like either family's allowance, or making the choice to buy a bicycle to cycle from jurong to amk for work, meals, etc.

0 comments

10 answers

Answer Now

Answers (10)

Sort By

You do not have to follow and invest $1,500 each month. Everyone has their own financial commitments.

What you can do is to draw a concrete picture of your income/cash flow. Remaining spare and disposable cash can be your investment budget.

If you have difficulty setting aside a retirement budget to your satisfaction, you will need to assess the following in whatever order you wish:

  1. Insurance. Are you maximising your coverage for the premiums you are paying? Are you overprotected?

  2. Transport. I assume you are taking only public transport at all times. Otherwise, consider cutting down private transport where possible.

  3. Food. If you have been eating out, you may want to consider packing your own food.

  4. Family allowance. Is this too large a percent of your income? If so, you need to voice this out to your family. I presume you are still rather young and it is important for you to build your personal and retirement savings. Can your parents derive some income through a relaxed part-time job to offset your burdens?

  5. Your expectations of retirement. You may need to adjust this, depending on your financial commitments and situation. Not everyone has to follow the $1,500 per month thing.

I wish you all the best.

2
👍
8
Question Poster

2w ago

Hi Jiayee, thank you for your input. Below are some comments to your input: 1. Insurance. Currently maximised my coverage without overprotected. Reviewed by a few FA friends who all felt that my coverage is optimised at this point of time. 2. Transport. You are right, I am currently only taking public transport, except for claimable trips due to work. 3. Food. Currently eating lunch out daily, with standard of 3 "veg" dish for caifan, to the point that my colleagues no longer question why no meat. I eat out for lunch only coz of my long working hours that deprived me of my sleeping time, let alone time to prep meals. I don't meet up with friends over meals even before Covid. 4. Family allowance. Yes, this is taking up a very large percentage of my income. My parents are currently working part time, but they barely have any savings, not because of their spending habits. I am perhaps the first generation in my family to make it out of the low income group, which is why I feel a bit more indebted to my parents than most. 5. Expectations of retirement. If I am frank with myself, I haven't got much solid directions for my retirement, or even what I expect for my own retirement. Just kind of feeling a bit overwhelmed trying to support my parents and wanting my next generation to not have to go through what I went through to even worry about myself.
Jiayee
Jiayee

2w ago

I believe you are doing well. You have optimised every dollar of your income. For retirement, you have your CPF and your savings. I do not recommend pouring your supposedly spare cash all into higher-risk investments (e.g. individual stocks, equity portfolios in robo-advisors) as every dollar means a whole lot to you. Do consider partitioning your spare cash such that part of it may go to higher-risk investments (at this point, I recommend robo-advisors because they lower the cost of doing dollar-cost averaging) and the other part of it may go to lower-risk financial instruments like bonds and endowments to prevent inflation from taking away the purchasing power of your savings.
Thank You!
Can you clarify
I wonder if
This is so helpful 👍
What about
Post

Don't use the 1500 as a reference or guide. Frankly I feel there is too much FOMO on the seedly community, and there seems to be a lot of privileged folks here who either don't need to support their family, pay student loans, or begin with moderately high net wealth.

I encourage you to do a spreadsheet to track net wealth. I do this on excel, update every quarter end (Mar / Jun / Sep / Dec) for how much I have in my bank, how much I owe (for property loan and credit card balances) and various assets eg stocks, cpf account. I measure how much more or less I have at that quarter end vs the last. I find it far more useful knowing whether I am doing better / worse or saving more / less.

Its a simple exercise that shouldn't take more than 2 hrs (don't need to make that excel super complicated).

Instead of spending your time comparing vs others, use it to think of how you can make your finances better than it is now. Now that is productivity.

I can sit around all day and complain why I can't afford a car when all my peers do. But complaining doesn't change anything except makes me look like a whiner.

I can choose to use that time instead to think of what else I can change in my life to make it better. Some examples I already have in mind for 2021 include

  • change the payment frequency of some insurance policies from monthly to annually. I expect this change to maybe save at most $200 per year. But its only a couple of forms to mail, and I can enjoy this savings every year thereafter.

  • consider moving some of my emergency funds to Singlife (vs buying new SSB). Again I don't expect this to improve my situation greatly.

But a few hundred here and there, and over many years, I will probably save thousands or more. In making small changes every year for more than 10 years since graduation, I would guess I saved 20k or more already.

If you need suggestions on where or what to look at for extracting savings, feel free to ask!!

2
👍
5
Question Poster

2w ago

Thank you so much Takingstock for your input, and making me feel better for pointing out the FOMO & how everyone starts off at different starting line. I had started tracking my net wealth except CPF accounts around in May on excel, updated every mid- & end-month with graphs (coz I am more of a visual creature). Had also started tracking my expenses with an app and compiling onto another spreadsheet to customise my own categories for the past 3 months since July. Thank you once again, and will continue taking baby steps towards the end goal.
Takingstock @
Takingstock @

2w ago

I used to do monthly when I was in uni in 2003, but as I get busier, I find quarterly is good enough. My opinion, use the time saved to think about where you can get more value out of stuff vs measuring (but maybe it's more of I prefer action to really get those savings). Jia you!! Life is a long stretch, don't make it living in unhappiness. Instead try to make it better or happier. Every little step adds up over time.
Thank You!
Can you clarify
I wonder if
This is so helpful 👍
What about
Post
S

stan

Level 2. Rookie

Updated 2w ago

Hey! you're not alone! I'm in such similar situation too. (though my folks have retired but they barely have any savings) And yes, i'm also looking at around $700 per months for my own food and non existent entertainment.

Some of the things i've done:

  • made sure my insurance are annual premiums which saves me a few hundred ( i made it a point to set aside monthly deduction to another account so that when its time to come to pay the annual premium, it wont be a shocker)

  • I do have some endowment plans to form part of savings for myself but i spread them across 10 and 15 years. they arent much, but at least when they mature, the money could come in handy when i'm planning to get my own place as i turn 35

  • i did start on some POSB RSS and Stashaway but just $100/mth for each and keeping as it is (but these are stuff that i started late as it took a while for me to finally have some extra cash after ensuring that i'm well covered and all)

  • In terms of lunches, i learned to meal prep so in a way i eat healthier and its cheaper too (i do give myself a free weekday to eat non meal prep food) So in a sense i do meal prep for 4 lunch portions. There are weeks where i extend it to 4 lunches and 4 dinner. Does save quite a fair bit and got my interest up in cooking too

  • i do explore ways to give myself entertainment at a cheaper cost (eg. finding strangers to share netflix subscription so its like $5-$6 for an account) Enjoying straits time subscription at $1/mth for 2 devices (made use of the 9/9 promo so that it last for 6 months, i think it helps to stay in the know for new too)

  • Occasionally taking on some side hustles on parcel delivery on weekends (helps me to explore my neighbourhood too)

Of course, know that you're not alone in this, do remember to show some self love to yourself or head out for some walks to get some breather when things get too overwhelmed!​​​

2
👍
2
Question Poster

2w ago

Where are you doing your side hustle of parcel delivery? Like where do you find it
stan

5d ago

I actually googled "parcel delivery" which brought me to sign up with parcel walker. However, I've stopped my side hustle of delivering parcels as i realise it does take up a bit of my time and the being on standby dont seem to match my schedule well. So i'm spending my weekends on free courses online to upgrade myself into having more skills
Thank You!
Can you clarify
I wonder if
This is so helpful 👍
What about
Post

Privilege is a huge part of why some people can invest x dollar value, but it means nothing unless taken into consideration how much that dollar value is in relation to spending, saving, debt and commitment.

I have always found it hard to save enough to create a good enough safety net as I started out my career in a low paying role. At just $1.2k a month, it was too small an amount for me to consider investment.

Looking back now, the biggest contributor to my ability to even consider investing was increasing my earning ability within and outside work. Just that confidence in creating value with my own hands and that being recognised by others who are willing to pay me for it, helped me accumulate a good safety net in a few years and I am only just starting to allocate my money to investments.

When I focused on increasing my value when it came to things I loved (e.g. photography, marketing, writing, learning and distilling information for others) I noticed they all centred around a similar theme, so instead of investing in the stock market, the small amount of money I had saved each month, I spent it on investing in myself.

The result is the period when I was super focused on that investment in myself reaped the most rewards for me in my career and personal life so far and allowed me to comfortably allocate $1.5k or more to saving for investments as this is money I am now willing to lose in the worst case scenario since I know I can find ways to create value that help me earn that money back.

0
👍
1
Thank You!
Can you clarify
I wonder if
This is so helpful 👍
What about
Post

You're probably still young. Tell yourself it's oky to start small. some people started from $200 a month, some start from $2000 a month.

but the important thing is, you started. It's never about how fast you get there. :)

0
👍
1
Thank You!
Can you clarify
I wonder if
This is so helpful 👍
What about
Post

I find consistency and where to invest in are more important considerations. Because investing doesn't have to be huge amount. You can even start now with USD 100.

On the US stock markets, you can get 1 share.

If your broker allows, you can even get fractional shares. For example, if you're interested in Apple stock (USD 124.40 for 1 share as of 13/10/20), you can get approx. 0.80 share on your USD 100.

Viola! You're a shareholder and owner of the company. 😊 You can dollar-cost average (DCA) - just buy a bit every month.

Remember, only DCA into high quality companies. I learned it the hard way - I DCA into mediocre company and index for three years...epic fail 🤦‍♀️

If picking individual stocks are too time consuming for you, you can consider Stashaway. Looks like they have a Monthly Investment Plan (SGD 100/month): https://www.stashaway.sg/r/earn-more-with-a-monthly-investment-plan

If there's a will, there's a way. Hope this helps to open up your options! ​​​

5
👍
1

3 more comments

Ridhwan Muzaki
Ridhwan Muzaki

2w ago

Hi Sharon. Why did it become an epic failure when you invested in index for 3 years? Is it because you feel that ~7% returns arent great enough?
Sharon
Sharon

2w ago

@Ridhwan Muzaki I didn't even get returns. I got major losses, even after including dividends. Haha. STI ETF performance has been lacklustre...too much sideway action. It's not a good ETF (due to its basket of stocks), as compared to other ETFs out there.
Thank You!
Can you clarify
I wonder if
This is so helpful 👍
What about
Post

Firstly, we need to have a complete understanding on our cashflow. Through this process, we will understand our earning ability and spending habit.

Here is a Guide:

Understanding Your Personal Cash Flow

Therafter, we will know the best way to manage your cashflow.

Next, create a budget that is capable of helping you to plan for the future. The best way to do this is via automation.

How I do My Budget:

How to create a Monthly Budget

By using a proper budget, there is no excuse for not saving money for a specific purpose. At the end of the day, it is all about cashflow management and discipline.

I share quality content on estate planning and financial planning here.

0
👍
1
Thank You!
Can you clarify
I wonder if
This is so helpful 👍
What about
Post

Giving a small sum of allowance to parents and bringing them out for a good meal once in a while can be the starters.

0
👍
0
Thank You!
Can you clarify
I wonder if
This is so helpful 👍
What about
Post

The only way is to increase your income quickly so that you can support your parents AND plan for yourself. Trying to make do with low income is a losing game

0
👍
0
Thank You!
Can you clarify
I wonder if
This is so helpful 👍
What about
Post

Hey Anon, instead of looking at specific dollar figures, try using percentages.

As a rule of thumb, try regularly investing 20% of your income every month without fail.

If you're trying to invest $1.5k, that's 2 X your expenses alone, and that's going to be close to impossible for many people to do.

To give some perspective (assume you don't have an increase of income).

If you can invest 20% of whatever you make at 6% p.a for 30 years, you'll end up with 15 years of your income saved up.

If you can bump that up to 30% of your income, that'll be 23 years of your income saved up.

If you can actively increase your income and not inflate your expenses by too much, you can expect to end up saving much much more.

Build strong financial habits and save/invest regularly a good percentage of your income.

0
👍
0
Thank You!
Can you clarify
I wonder if
This is so helpful 👍
What about
Post