Earlier this year, Straits Times published a report that generated much discussion with regards to the amount needed for a basic standard of living.

According to the report, a couple aged 65 and above would need $2,351 to cover their day to day expenses. 

Here’s how the team from NUS defined a basic standard of living:

A basic standard of living in Singapore is about, but more than just, housing, food, and clothing. It is about having opportunities to education, employment, and work-life balance, as well as access to healthcare. It enables a sense of belonging, respect, security, and independence. It also includes choices to participate in social activities, and the freedom to engage in one’s cultural and religious practices.

Here’s what the results found:

The line items are surprisingly very all encompassing. 

As part of our retirement planning, we charted out how much we’d need to build our retirement portfolio based on our projected annual expenses, and compare that to the findings.

For both Mrs Budget and myself now, here’s our current rough fixed expenses. We excluded other variable expenses such as mortgage, income tax, digital subscriptions out for now.

Meals	S$700
Transportation	S$200
Groceries / Household	S$200
Phone Bills	S$100
Utilities	S$200
Grooming	S$50
Entertainment	S$200
Provision for: insurance personal care Health care Others	S$1000
Total	S$2,630

Pretty close to the study results of S$2350.76 per elderly couple.

So in total, we will need S$2630 a month, or S$31,560 annually in order to maintain our current standard of living. This is of course assuming we have no other liabilities (mortgage, loans, credit cards etc) and our dependents are taking care of themselves.

Assuming we account for inflation, here’s what S$31,560 of annual expenses will look like for the next 50 years:

It is quite scary to know that S$31,560 of annual expenses now will be S$112,241.84 (S$9,353 per month) 50 years later!

Of course, the inflation rate we are using is of the higher end – 2.57%. If we were to use 2019’s inflation rate of 1.4%, the numbers will look way lower. However, there are studies that say that experts expects inflation to go up to 3.2% in the coming years, giving us reason to be alarmed and to use the historical 60 years inflation average.

So for our retirement planning purposes, we will be using the above table of expenses to do our planning and to see if we have enough to retire.

Of course, this figure is also the basis of all our calculation when we plan for our short, mid and long term goal. 🙂