The range I've gotten was between $1,500 - $2,000 if you don't own a car, and between $3,000 - $4,000 if you intend to own a car.
As what I've written in my "About Me", I plan to retire at 45. This gives me a total of 20 years to accumulate my wealth. Yes, now you know my age *intense revelation music*.
From the above range on how much is necessary to live comfortably, what would that value be in 20 years?
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| Source: Trading Economics |
Based on Singapore's inflation rate taken from Trading Economics, inflation rate average at 2.63% from 1962 to 2017. We can note from the graph above that there is an exceptional spike between 1973 to 1975, reaching a peak of 34% in March of 1974. As Singapore is now a developed country, it is very difficult for such occurrence to happen. Besides that, because our average inflation rate takes into account this spike, we can assume that is now on the higher end of the spectrum. And this can be proven by noting that majority of data points since 1962 has been below this average.
However, to be further on the safe side, we will multiply this by a safety factor of 1.1, giving us a buffer of 10% safety. The inflation rate (after safety factor of 1.1) turns out to be 2.89%.
Now, rewinding to our initial ranges, if we were to account for 20 years of inflation, this is how much a month we need to survive comfortably:
1) Not intending to own a car: $2,652 - $3,536
2) Intending to own a car: $5,304 - $7,072
Of course, I do not have any experience owning a car, and do not know how much it costs to own one today, however, the true intent of this post is for you to work out how much you need in future, based on today's cost of living.
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