Price Increase
10 years ago, a bowl of fish ball noodle used to cost $2. Today I went to "Kopitiam" food court and saw the same fish ball noodle, cost $3.80. Not only the price of food increase; price of goods and services from Utilities, transports to every of our daily little necessity have gone up almost double.

As the price of raw material and labor increase yearly, the price hike of goods are most likely to continue in future. With better healthcare, we all can have a longer lifespan.




Let calculate the use of retirement fund needed in the most ideal scenario
Let do a simple calculation, Let say cost of living double every 10 years. For someone who retire at age of 55 and is expected to live till 83. Today, At a age of 25, Joe Smith work as a investment banker with a good salary. He work hard everyday to acquires a saving of 1 million dollars for retirement.

A break-down of Current Monthly expenses for Smith
Food (breakfast, lunch, dinner and supper) - $400
Groceries - $ 200
Utilities and phone Bill - $300
Transport and car loan- $ 1000
Miscellanous fees - $600
Total per month: $2500
Total per year: $30,000

When he retires,although He trim down and spend a third of his current expenses. but after 30 years, price of goods have gone up 3 times thus his month expenses will still at $2500.

Joe retirement life
At Age 55 - Now Uncle Joe, retired with 1 million need spend $30k per year till 65. A total of 300k is needed for the 10 years.

At age 65 - He is left with 700k. Still healthy and growing strong but price gone up double. he need to spend 60k each year. That total up to 600k.

At age of 75. Grandpa Joe had used up 600k of his 700k and is left with 100k and cost of goods increase. He would have to part with 80k each year now.
With what he has left, he can only survive another 1 years to reach a age of 76.
In a ripe age of 76, rip of all his saving, he will need to apply for grant from social help center to continue his remaining year.


But here a question for everyone
The above concept is base on the ideology that Joe has a saving of 1 million dollars for retirement and during his retirement he is free from any major disease.

In reality, how many of us are able to save up to a million dollars before retirement?