A recent survey by DBS showed that there is potential disconnect between targeted retirement goals and the retirement income they expect to live off. According to the survey, 73% of the people planned to retire between 55 and 65 with an average savings of $571,715. More than 85% of them expect to live on a retirement income of $3,500 for the next 15 years or more.
When I look at the numbers, instantly I knew that there is a disconnect between the targeted savings $570k and the $3,500 income. The savings required are definitely not enough. Let’s look at the factors involved.
Assuming that $3,500 is the targeted present value of expenses required during retirement, inflation will make the number a lot higher by the time you retire. Assuming a 3% inflation rate, and that you are 30 this year and you intend to retire at 60, …