Property Investors Don't Think About Retirement Age
I was glued to the TV last night listening to the PM’s National Day Rally speech. One thing caught my attention: government’s plan to raise the retirement age from 62 to 65, and re-employment age from 67-70 by 2030.
Will I want to work till I am 70?
I don’t foresee myself stop working in the near future. But I also don’t see myself as working right now. Huh? What do I mean?
Marc Anthony aptly puts it this way, “If you love what you do, you’ll never work a day in your life.”
I enjoy what I do right now. By the nature of my work, I have control over my time. I enjoy my family time. I go on family vacations. I am also actively involved in some religious works.
Raising the retirement and re-employment age may be good news for some people.
But I am thinking of many people who are working because they have to work. They need the money. They don’t get to enjoy their golden years. Or grand-parenthood. Or travel. Or doing the things they have always wanted to do.
Sad. Very sad indeed.
In contrast, others are enjoying the best time of their lives and doing the things they have always wanted to do.
Do You Have A Plan For Retirement?
How are they able to do it? Some enjoyed high incomes during their active working years and have good savings. But they are rare.
You can do the sum. Assuming you work from age 25 to 55. You get to live till 85-year-old. So you work for 30 years to save for another 30 years with no active income. Every year that you work, you have to save for 1 year of retirement. And you need to factor in inflation because $1 now is not worth $1 30 years from now.
If you want to retire with $3,000 to spend every month for 30 years, you need $1.08m. If you factor in 2% inflation rate a year, you will need $1.47m!
How many people have that much money to retire?
That is why most of us can’t stop working.
To retire, the only way is to make your money works hard for you.
The most common vehicle is property investment because it is the best hedge against inflation. The property is not the house you live in. It must be investment properties/properties that can give you passive rental income or capital gains.
One investor of Commonwealth Towers bought a 689sf unit in May 2014 for $992,849. In Dec 18, it was sold for $1,310,478 for a profit of $317,629.
Another seller of a unit at The Nexus made a whopping $1.22 million which was bought for $1.375 million in February 2007, and sold for $2.595 million on July 19.
How long does it take a person to save this much money? Imagine saving $1000 per month – how many months will it take to save even $100K?
The investor probably put in only 20-25% of the purchase price and paid the rest with a bank loan. If it is rented out, the rental helps to cover the loan. The smart investor uses other people’s money to make money. The investor’s language is return on equity.
That’s why private property owners never think about their retirement age.
Danny Han has always been in the people’s business, having spent 23 years as a church pastor, five years as an insurance agent, and the last 16 years as a property consultant.
Danny has a genuine interest in people and firmly believes in personal integrity. While helping homeowners with their property needs, their interest always takes precedence over his personal gains. Hence, Danny has consistently earned his clients’ complete trust and loyalty. Many of them have become his personal friends.
Danny received his Diploma in Mechanical Engineering from Singapore Polytechnics and Bachelor of Science from Oklahoma Christian University of Science and Arts in Bible & Psychology.
Besides keeping abreast of the property market trend and constantly equipping himself to better serve his clients, Danny is a passionate foodie, a weekend cyclist, and an avid hiker.