Expected Lifespan

Crossing 50 this year has given me a different perspective of life.

I have technically more than crossed my life journey’s halfway mark. My parents are still very healthy at 82/87 this year. Average life expectancy in my country is 82 now, versus 75 in 1990. People in my age group are more aware about health issues now and do generally take better care of ourselves. Baring any unforeseen situations plus new medical advancements, I could possibly live till at least 100.

This brings up another set of issues. Can our retirement funds last? Latest studies say that you need at least $1 million to retire. Assuming that you spend just 5% of this amount (50k/year) and given that interest rates are almost non-existent, your funds will run out in 20 years. This is just for basic living requirements and it does not include emergency medical needs which tend to increase in probability of happening as we age.

While the government is more aware that the number of seniors will increase dramatically and the population pyramid will invert in the future, they have started to introduce retirement planning schemes like CPF Life, SRS and health insurance coverage to help us prepare for old age.

An individual also has a responsibility to build up his own next egg, to look for more streams of passive income to supplement his expenses. These may be in the form of stock dividends, bond interest payments or rental income. Ideally, we should also aim to be free of any housing loans by the time we retire.

Family wise, I have also reminded my kids that we will financially support them till they graduate with a degree in hand. After that, they are expected to be independent. It would also be nice if they can help foot some of the household living expenses by then (assuming that they are still living with us), as we will be nearing retirement age then. We do not want to be a funancial burden to them and neither should they be on us after they start working.

The journey into the 2nd half of our lives will also be long. We need to be proactively planning it early and not assume that everything will take care of itself.