Today I have come across an interesting blog which talks about the price of Retirement. Price of Retirement. Understand that there are many blog are talking about how much money or should I say how much passive income should we go for before we can retire comfortably. 

Retirement can be very costly because when you officially declare yourself as a retiree, not only that your source of income will be gone but also you will have ample of time thinking of what to do. I understand that many people will not think the latter as a problem. Really, why should I complain if I can slack at home watch TV, wake up late and go for a good breakfast while others are rushing for work.

So each of us has a price for our retirement, so what is mine? and what is yours? 

Mine is basically very simple, I would need 2.5 times the amount that I intent to spend per year, in other words, if I spend around 1.1k per month, plus my family expenses around 1.5k per month and house installment 2k per month (if I manage to purchase condo), so I will need at least 4.6k and we round up to 5k per month. 2.5 times for me will be around 12.5k per month, so per year is around 150k. That is quite a lot!

So how much do I really need to generate such a huge amount of income?

If lets say my Dividend Yield is around 4.5% then I would need around 3.334mil to reach my retirement price!

If lets say my dividend Yield is around 5% then I would need around 3 mil to reach my retirement price!

If lets say my dividend yield is around 5.5% then I would need around 2.728 mil to reach my retirement price!

Now I am 28 years old, so lets say I work for 22 years. So 22 years from now I should at least have 3 mil, so each year I would need to save around $150,000.... I must be dreaming, $150K is not a small sum to save per year. My yearly income didn't even reach 6 digit!

But as I say, this is a progressive goal, $150k might seems to be a huge figure, but if I start to earn a small passive income now, it will certainly make a difference! 

As I am going to get married soon, so I will most probably start from 0, after my wedding and down payment for my 2 bedroom condo next year. I will be getting allowance from my wife instead when I get married so that she can monitor the finance for the family. I will probably guide her on where to save and which instrument is better for getting good yield with low risk.

As for me, I will go for shares with the little savings from my allowance and dividends from my shares. 

I assume myself getting around $900 per month (for travel and food during weekday and weekend), and I think I will save around $350 per month. With that amount, I will set myself to purchase STI EFT every half a year so that I can gain stable dividends from 29 years old onward. So If this works lets do a calculation

For 20 years, with compound interest, I will be able to achieve $115K, when I reach 49 years old. Not bad from my portion and the main account with my wife, would have been much much more than what I have! Probably 15 to 20 times more than mine when I am 49 years old. So with a little bit more push, we will be able to attain financial freedom if we let it roll for 5 to 6 more years. 

So, this is my retirement price, what about yours?