Wednesday 29 January 2014

Hope To Retire At 60?

This is extracted from a Q&A session in Sin Chew Finance.

It attracts my interest because Mr M is about the same age with me, also with 2 kids.


Mr & Mrs M, both 36 years old, with 2 kids age 8 & 5. Both are employees. They hope to retire at 60 years old with RM8,000 passive income a month.

I am wondering why they hope to retire at 60... may be they like their work very much?

Lets look at Mr M's current financial strength.


Net salary: RM17,000 per month
EPF: RM3,750 per month

Investment: RM4,395 per month

Property: RM200,000
Car 1: RM50,000

Bank savings: RM20,000
EPF: RM438,802
Private retirement scheme: RM12,600
Education plan: RM45,800
Unit trust (ASN): RM75,600
Unit trust: RM137,448
Shares: RM38,553
Insurance: RM59,302

Car loan: 15,000

Net current assets: RM813,105

After seeing Mr.M's wealth, there is one thing that comes into my mind: If Mr.M can't retire by the age of 60, then I don't need to think of retirement for the rest of my life!

To get RM8,000 a month during retirement, Mr.M needs to have RM2.4 million placed in an investment that generates 4% return annually when he retires.

If he continues to invest RM4,395 a month regularly, and if all his investment (RM813,105) yield an annual return of 5%, he will have RM2.67 million after 14 years (with interest compounded). This should be enough for his retirement and children's education needs.

This does not include any special one-off spending which may occur from time to time. However, there may be salary increment and more bonus as time goes by.

So, Mr.M should be able to retire at the age of 50.

If his investment gives 8% annually, then he will have RM2.55 million after 10 years.

For me, my household net salary & liquid assets are way below Mr.M's level. Can I achieve my early retirement dream in 10 years time?

Looks like mission impossible.


  1. With his household earnings, he should able to retire must earlier than he thought. What he need to do is just perhaps simplify his lifestyle, cut down expanses and do some proper investment especially his EPF money. Too much to be idle.

    My thought same as you, if he cannot achieve early retirement. My ideal early retirement may not be reality :(

  2. What i have is surprisingly he don't put much of their money into property and looks he is umder insured

    1. 对,要投资房屋! 风险比股票来得低.

    2. Hi Danny. I think that both are safe as well as risky, depends on how we invest :)

  3. Some people may not know the potential of property investment, or simply do not like the hassles & risk involved in it, though the risk is relatively low.