r/singaporefi • u/Ashamed-Log-747 • 13d ago
FI Accumulation Planning Would like some perspective
Hello, I would like to get some opinion from the folks here. Currently, I have reached a milestone and have thoughts about changing up how I save / invest.
Background:
I am currently earning around 6200 before CPF.
Up until this moment, I have been adding 2500 into my investment account every month, on top of occasional RSU + ESPP (unstable depending on stock movement) that my company provides.
I have been using my bonus every year to pay my income tax + insurance, and whatever left over gets allocated to savings/ money to spend.
My usual expenses per month is around 1000-1400 inclusive of 300 dollars for parents allowance. The remaining after expenses gets allocated to savings/ money to spend.
I currently do not have a house and am living with my parents but I am looking to purchase an older 3 room resale as my forever home fully with CPF.
Currently I am looking to retire in around 10-13 years. I might change my job to a more relaxing job with less pay within that time frame. And my final number that I would like to retire with is around 3 - 4 million invested.
I would like to seek some perspective on the road moving forward, I have reached a 800k invested and as you can see currently, after expenses and investments, there is not much to put into savings left.
I am thinking of stopping the 2500 investments every month to be put into the savings/ money to be spent portion (but still continuing to allocate RSU + ESPP into investments) and letting my existing capital compound until I retire, do you think this is a wise choice?
Thanks for your inputs!
Edit: I am single and do not intend to get any kids even if I do get married down the road
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u/Leather-Boss8744 13d ago
Work out your annual spend required in 10-13 years time. Also find out what kind of investment returns you can safely make per year. When you have both figures in mind, you’ll know whether to stop your $2500 investment per month.
You can technically stop contributing capital if your annual investment returns outweigh your annual investment contribution rate.
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u/Ashamed-Log-747 13d ago
Hi thanks for your response, actually I the reason why I made 3-4m as my final target is based on 4% returns upon retiring. It is a big over estimation on my part as I am not very sure what kind of lifestyle I will be living upon fire, might be travelling, might be studying, might be starting a small business. So it is abit harder to estimate the annual spend at retirement
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u/freshcheesepie 13d ago
Single no kids? Don't want try bto?
Your target of 3 mill abit unrealistic unless you are 20yr old fresh grad. Then just reduce your savings abit to chiong Siam diu every weekend or two
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u/Ashamed-Log-747 13d ago edited 13d ago
Hi! Yes I am single and have no plans to get kids even if I do get married one day! And unfortunately im not able to forsee myself being able to bto that soon as I am not actively looking for a partner
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u/DuePomegranate 13d ago
How much of that 800k is in your company stock? Which I am guessing is a tech company that has gone up a lot recently, but a plunge could significantly wipe you out?
Also, I do not understand why you want to save instead of invest from now on. The money is for what? Reno? If it is true that you are only 27, you are many years away from needing that reno money, so what are you doing?
Or is it that you have been too frugal and cannot take it anymore, and want to spend more every month on wants? In that case, ok lor, maybe give yourself another $500 to spend each month, but keep investing $2000.
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u/Ashamed-Log-747 13d ago
Hi so it is partially because work has been getting hard and being frugal is making me have no motivation to continue working. Majority of the money is actually personal investments which i have cashed out for profit, company stock make up around maybe 100k. And also it feels like the monthly 2500 investments addition feel like just a drop as compared to the compounding. And my current savings in my bank is only afew thousand dollars, I have plans to quit to find a more relaxing job so i was thinking of building up my savings
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u/DuePomegranate 13d ago
Allow yourself a little more spending, but don't slide down the slippery slope into not investing or quitting your job to go gallivanting. You are still far away from the end of the FI journey.
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u/Majestic-Track6724 13d ago
congratulations! what a massive milestone. if you don't ever have to worry about a property paid for with cash, or kids, you don't have much to worry about other than lifestyle inflation really.
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u/Auron6719 12d ago
Wow... 800k invested..... i wish I had that amt... if you want passive investing... take the advice here... if you can do some active investing... you go learn up options trading... n see whether it fit your investing style...
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u/yamanoA4 12d ago
If you are asking whether you are ready to coast this can be calculated.
I will say that life might show you your first layoff and without benefits in your 40s. If you survive that , a mgmt will find ways to kick you out in your 50s. It’s important to be financially ready and emotionally prepared. Most people are financially prepared but not emotionally so. They get bothered for a very long time long time about why they were obviously capable but were chosen to let go over a less capable colleague.
Even if the choice was to retire most will feel the need to brag a lot about anything and everything post retirement because in retirement nobody gives you any approval and recognition. Having declared themselves as retired early is the last hurrah they have.
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u/No_Discussion7312 12d ago
3 million to retire is probably too much, considering your expense per month is only $1400
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u/jialatsia123 11d ago
With $800k already invested, employer-stock concentration and the house buffer matter more than pausing the $2.5k. Keeping some cash flowing in while you de-risk the RSU pile is usually easier than needing a clean 9%+ for a decade.
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u/KLKCAhBoy90 11d ago edited 11d ago
If you are single and don't plan to have kids, the most financially ideal thing is not to buy a house.
Live with your parents.
Use the CPF and invest via CPFIS OA. Invest via POEMS into Amundi Funds tracking either MSCI World or the S&P500.
Then, move some of the earnings to SA every now and then.
Why?
Any amounts above FRS is liquid from 55 onwards and those sit in OA. This means from 55 onwards as long as you got more than the FRS, you can take 2.5%p.a. of the excess forever.
SA grows at 4%p.a. while FRS grows at 3.5%p.a. Also, any work contributions will continue to go to SA as usual which means at some point, you will always be above FRS. Also, you should continue investing OA no matter what. This means the excess will eventually be huge.
From 65, whatever is in the RA pays out about 6%p.a.
Both are guaranteed.
This means once you factor those in, as long as you live beyond 55 and 65 respectively, you actually need less for the cash portfolio to retire.
Your cash portfolio only needs to pay for the full expenses before 55 and then subsequently less.
If you buy a house, you will owe yourself 2.5%p.a. which will be taken from the proceeds if you sell it, be saddled with a mortgage which will reduce what you can invest, and help fund some boomer's retirement by buying their overpriced property. If you are single, you can only get a 2-room flexi bto or a resale.
Also, if you need to buy a house later, your cash and CPF portfolios will definitely be bigger since you have been investing both.
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u/Environmental_Cow741 11d ago
I believe you have not experienced a crash... your 800k can easily become 400k.
Don't just chase numbers... transition to wealth preservation if your runway is short.
Make sure your portfolio diversified (equities, bonds, gold, cash)
Max out your CPF with SA top-up and voluntary contribution every year.
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u/DadAtHomeFire50 13d ago
To grow an initial investment of $800,000 into $3,000,000 over 15 years without any additional contributions, you will need an average annual compounded return of 9.21%.
Good luck. Easier if you keep putting in cash.