Your Comments – My Replies #1
Here is my first attempt dedicating a single post (my replies) to the comments that you have posted in this blog. Also big thanks for taking the time to read the posts and spending some time on this site! Hope this blog has helped you in some manner of Financial Planning and most importantly – Make You Want To Plan Today!
Special Thanks To Andre Of Beginning With Finance For The 4 Comments!
Today, I am lucky enough to have Andre Of Beginning With Finance to contribute 4 of his personal comments to some of my posts and in the comments, he actually raised some good questions (this guy is serious about Planning His Finances) which I intend to post my replies through this post.
Meanwhile do click over to his Blog and read up some tips on managing your Finances!
Answering His Comments…
1. My Post: Have You Started Your Retirement Planning? His Comment: Hey Dexter, 2% for Inflation Is Actually Low? Is It Better To Over-State The Inflation Rate While Planning For Retirement?
My Reply: 2% for inflation is seriously low. The actual inflation rate is on the average of 4 – 5%. To over-state the inflation rate while planning for retirement would definitely be better and you would get more realistic results.
But if you have done the calculations yourself (which I have did), I would need to set aside $600/month for the next 37 years in order to achieve a comfortable retirement income of $2000/month. If I have done up a higher inflation rate, it would only mean that I have to set aside a much higher (than $600/month) which may be beyond my means and also that I may not be that committed to do so.
My personal feel is that if you are able to and are actually setting aside more than $600/month as an average Singaporean (earning around $2500/month) despite having to succumb to temptation of life – entertainment, gadgets, good food, holiday trips, handphone bills and parents’ allowances, is actually a remarkable feat in reality!
Therefore there’s nothing wrong to plan with inflation rate of 2%, as long as you know the fact that you need to really save is most important! Also do note that when stuffs are actually becoming more expensive over the years, there are still some lucky breaks e.g. Chicken Rice are mostly selling for $3 per plate (due to inflation) now, there are some outlets that are still willing to sell for $1.50 to $2.50. Lesser Meat but still fills your tummy!
Key Pointers: Do know that there’s inflation in reality. And you need to save no matter what! Be comfortable with your committed and regular savings!
