Budgeting post-retirement medical expenses

That y doc profession in sg is so profitable.
Even simple medication, need to pay doc fee b4 they allow u to buy

Perhaps most people here will have to continue to work in old age, simply the inflation w always be one step ahead. Whether this is a natural progression or a controlled inflation, there is no simple answer. It could be specially made such a way that more people stay in the work force. In any case, with this amount of money, u can retire comfortably in many other neighbouring countries. Or on the other hand, try to make in excess of $2mil to have a comfortable cushion, and join the top 10% wealthy.

Based on my simple estimation,
Per pax need at least 500k cash to generate dividend of abt 3+k.
1k for medical, 2+k for personal expenses.
Hse hv to be fully paid up.
If nt achievable, better prepare to wk till u "hand in ic"

(06-05-2014, 02:25 PM)funman168 Wrote: Based on my simple estimation,
Per pax need at least 500k cash to generate dividend of abt 3+k.
1k for medical, 2+k for personal expenses.
Hse hv to be fully paid up.
If nt achievable, better prepare to wk till u "hand in ic"

500k cash to generate 3+k dividend. That means the shares must be giving in excess of 7+% per year. In hindsight yes there are a few reits counters that give that for now. But over the long term, is that sustainable? For planning purpose, its better to assume 5% dividend from shares.

(06-05-2014, 12:34 PM)funman168 Wrote: That y doc profession in sg is so profitable.
Even simple medication, need to pay doc fee b4 they allow u to buy

I personally think the docs are the most fortunately group here. Their supply is limited, and the demand ever-increasing. After serving the bond in the polynic, they w switch to private and start getting the fat pay cheque. The young dentist i do my checkup drives a Mercs CLK. A 15min job easily costs $85. No wonder he keeps smiling to the patients.

Yeah, smmore they do nt hv to fear the dreadful retrenchment. Not like the typical corporate job

Thank you for all the useful information. Looks like I need to set aside more money for long term medication.

I think expenses increase drastically when a person can no longer take care of him/herself and need a maid or hospice care. Difficult for a person of average means to general enough passive income to pay for long term care, on top of the normal expenses.
Perhaps the last resort is to do a reverse mortgage or downgrade to one of those 30-year studio HDB.
I also budgeted some money for annual travels. In the late stage of life, I can divert this money for long term care since I probably will be in no condition to travel by then...

I'm no insurance salesman but for contingency planning, you should hedge it with insurance. Like all contingencies, they are events that you pay for and hope that it does NOT happen, just like a nation's armed forces. There are top up plans for elder shield currently.

Some expenses will be diverted to provide for medical treatments. As you mentioned, vacations will be curtailed and even owning a car, memberships in health clubs, SAFRA etc.

Eventually it may balance out. Surrendering life insurance policies after 30 years may be an option too, since the premiums may be too much to pay. Insurance is one part of financial planning that many people miss. If buying policies, know what you want and need, plan with a timeline in mind and stagger each policy to mature at different times. It is risk management with return of capital. The return ( at this time ) is terrible but it is a different instrument not designed for high returns.

It takes about 30 to 40 years of regular savings, investing in shares, and along the way, seizing opportunities that meet your risk profile. The overall time may be 40 years but have 3 to 5 year horizons for course adjustments. Getting married, having kids, buying a home, buying a car, deaths in the family, personal health issues, loss of employment are quiet predictable.

Yet the risks of these events can be managed, planned for. Always plan for unemployment and alternative incomes all the time, balanced with risk management.

Once you have this as guiding principles, most things will fall into place.All the best.

(07-05-2014, 10:17 AM)specuvestor Wrote: I'm no insurance salesman but for contingency planning, you should hedge it with insurance. Like all contingencies, they are events that you pay for and hope that it does NOT happen, just like a nation's armed forces. There are top up plans for elder shield currently.

Yes, insurance is a good hedge against the uncertainties. The link of NTUC Basic ElderShield 400 and PrimeShield 1000 plans below

http://www.income.com.sg/forms/brochure/PrimeShield.pdf