Having S$100,000 by 55, every little step counts
It’s quite possible to save a six-figure-sum, whether you’re 30, 40 or even 50 years old.
Still, a big pile of cash isn’t going to materialise without planning, dedication, and some smart choices.
Set your mind to it and if you haven’t already, start keeping track of your spending to see where you can cut back.
Here’s how you can clock those zeroes even before you retire*:
Starting when you’re 30:
Assuming an annual interest rate of 3%, you’d only need to set aside S$225 a month to get to S$100,000 by the time you’re 55 years old.
That’s equivalent to:
- Another branded watch you could do without, since it’s your third or fourth spare
- Just 4 restaurant meals in a month to cut back on
- About 12 cocktails you can skip, and your liver will thank you too
- That daily latte, or two, on your way to work
Starting when you’re 40:
You might be thinking, there’s still time. But do begin sooner, rather than later. In any case, it’s just S$441 a month you’ll need to hit S$100,000 in the next 15 years.
Here are some suggestions on how:
- Exploring the heritage and unspoiled nature of neighbouring countries for your family holiday. You’ll avoid a gruelling long-haul flight too. Save: S$3,000 per person
- Indulging in meals at the hawker centres, which are also world-famous, instead of at expensive restaurants: Save S$200 a month
- Quitting the gym and appreciating the free greenery and running tracks around the neighbourhood instead: Save S$100 - S$200 a month
Or you could consider buying a 15-year savings term policy with these monthly savings.
Such a plan could even generate extra cash bonuses that, when re-invested, means more money in the bank at the end of the policy.
Starting when you’re 50:
It really isn’t too late. It just takes more fiscal discipline and simplifying your life.
Make your money really work for you to generate at least S$1,545 of savings every month.
With an annual interest rate of 3%, you’ll hit just over S$100,000 in five years.
What else can you do?
- Start paying off your loans to cut your interest burden. That bonus or dividend cheque could go towards paying off a hefty chunk of your home loan.
- Giving up the car (especially if you have no little kids to ferry around by this time) definitely saves you what you need.
- Live simpler and see how your choices help make you wealthier.