What will it take to retire at the age of...

I believe for a lot of us, we have a goal to plan for our retirement, or even achieve FIRE at some point in life. A starting point to decide the amount of wealth is to base it off:

• Amount of wealth to accumulate
• Drawdown amount/rate (that is, how much are you drawing to live off the accumulated wealth)
• Our life expectancy (as morbid as it sounds)

The typical drawdown rate seems to be based off 3-4% drawdown annually. This brings us to being able to live on this sum for 25 years - 33 years, not taking into account inflation or unexpected spending.



I'll explore the wealth to be accumulated for retirement based off:

• Drawdown amount of $12,000 annually.
• Effective drawdown amount (at 3% inflation) equivalent to $12,000 annual drawdown.

In Singapore, the typical retirement age is 65. So shall we see how much wealth to accumulate (per person) to survive our golden years? For the sake of us who is hopeful in living past 100, I have included the age of 105 and 110.

Live Till Age of	Drawdown rate	Wealth to Accumulate
		No inflation	Include 3% inflation
80	6.67%	180000	280434.13
85	5.00%	240000	433466.70
90	4.00%	300000	628133.38
95	3.33%	360000	873814.49
100	2.86%	420000	1181822.23
105	2.50%	480000	1565778.14
110	2.22%	540000	2042061.75

Without inflation considered, the amount you need to accumulate seems quite achievable doesn't it? But once you factor inflation in - for those of us expecting to live older, that becomes quite an incredible sum!

If one was intending to retire by 45 by accumulating wealth then live off this sum:

Live Till Age of	Drawdown rate	Wealth to Accumulate
		No inflation	Include 3% inflation
80	2.86%	420000	1181822.23
85	2.50%	480000	1565778.14
90	2.22%	540000	2042061.75
95	2.00%	600000	2630343.61
100	1.82%	660000	3354218.07
105	1.67%	720000	4241954.23
110	1.54%	780000	5327386.53

Now... what if one were to aim for retirement as early as the age of 35?

Live Till Age of	Drawdown rate	Wealth to Accumulate
		No inflation	Include 3% inflation
80	2.22%	540000	2042061.75
85	2.00%	600000	2630343.61
90	1.82%	660000	3354218.07
95	1.67%	720000	4241954.23
100	1.54%	780000	5327386.53
105	1.43%	840000	6650970.41
110	1.33%	900000	8261033.10

Have your eyes popped out looking at the sum if you were to live past 100?

When planning your retirement, however, there are contingencies that need to be considered for these scenarios:

• Life expectancy - If you outlived your accumulated wealth
• Emergencies requiring a sudden larger drawdown to be withdrawn
• Your expected standards of living - This directly influences your wealth to be accumulated and the drawdown amount. If you plan to live a simple minimalistic life post-retirement, then you do not need to accumulate as much. Consequently, if you plan to live a luxurious life, then you need to accumulate a larger amount.

 Have you started on planning out your retirement?

Portfolio Update - 07 April 2018

Wow, it's already April this year, how time flies!

I realise I have gone almost a couple without updating my portfolio!

	Income Portfolio
	Counters	Units	Market Price (SGD)	Overall Value based on market price (SGD)	Allocation
1	Cache Logistic Trust	7500	0.84	6300	23.85%
2	Cromwell European REIT	1000	0.91	910	3.45%
	Growth Portfolio
	Counters	Units	Market Price (SGD)	Overall Value based on market price (SGD)	Allocation
3	Alliance Mineral Assets (AMAL)	40000	0.34	13600	51.50%
	Cash and other Assets
	Counters	Units	Market Price (SGD)	Overall Value based on market price (SGD)	Allocation
4	Warchest	1	5600	5600	21.20%
	Total SGD			26410	100.00%

Due to my impending home purchase, my plan towards my stock portfolios needs to take a detour and I have decidedly sold off the following shares:

• Sold Capitamall Trust at 2.080
• Realised Capital Gain of $958
• Earned overall distribution of $1258
• This represents a realised gain of 23.5% after factoring in commission.
• Sold Frasers Logistics and Industrial Trust at 1.090
• Realised Capital Gain of $170
• Earned overall distribution $88.5
• This represents a realised gain of 28% after factoring in commission (ho boy how I wish I add to my position in the first week of IPO)
• Sold Singtel off my CPF Account with a minor loss of $160.
• My initial plan was to hold Singtel for a few years as I am confident in spite of the gloom that surrounds Telcos, Singtel was sufficiently diversed to outside Singapore and Temasek will not let it go down so easily. If I had not need to liquidate my position, I would stay vested until I meet my target gain.

I guess sometimes in life, there are unexpected curve balls thrown at you and you have to make a decision to let go for different reasons, be it new opportunities, rebalancing and/or other personal reasons. This also shifts my attention to plan for rebuilding my portfolio in a few years.

The good news? In spite of selling off these shares, I'm well on my way to achieve some of my milestones! :D More on that later.

Proposed Merger of Equals between Alliance Mineral and Tawana Resources

Announcements can be found here.

Key takeaway:

• Under the proposed merger of equals between Alliance Minerals (SGX: 40F) and Tawana Resources (ASX: TAW), Tawana will become a subsidary of Alliance Minerals, with proforma ownership split 51/49 between Alliance/Tawana shareholders.
•  The proforma Market Cap post-merger is expected to be ~A$446m and this will place the merged entity in the position of a Mid-Cap producer.
• Capital raising to take place.
• In an earlier news, 85% of non-Bald Hill assets such as Cowan will be spun off in a Spinco (no actual name yet), with ownership by existing Tawana shareholders. There will still be a 15% stake by Tawana thereafter prior to the merger. This also translates to the merged entity having ~7.5% stake in these assets.
• Mark Calderwood (Managing Director of Tawana) will be the Managing Director of the merged entity.
• Existing Tawana shareholders will receive 1.1 Alliance Mineral shares for every 1 Tawana share exchanged post-merger. Thereafter Tawana will delist.
• Alliance Mineral to look to listing on ASX as well.
• The merger is subject to an independent expert concluding the merger is in the best interest of Tawana shareholders.
• The merger, if successful, is scheduled to complete on October 2018.

My reaction:

 

The current reaction over at HotCopper forums seems mixed. Let's see what happens over there after a few days. If Tawana shares really plunges on resumption of trading, it could be a good opportunity to accumulate.

As an Alliance Mineral shareholder, this is a pleasant surprise, especially given that we will earn in ownership to the spun-off properties. I guess in a sense, this also answers my previous question about the business directions of Alliance Mineral going forward. Staying vested.

Previously I have talked specifically about Alliance Minerals here:

• Why I am bullish on Alliance Mineral Assets Limited
• Afterthoughts - Alliance Mineral's CEO getting sacked, and commencement of production

Disclaimer: The above should not be used as a decision to solicit buy/sell activity. Use all information at your own discretion and DYODD

Random Musing - When a union of two is more than just +100%

When one gets attached to his or her significant other and settles down, it's not merely a union of two person. They love each other, double their joy, share their sorrow, and offer comfort in each others' company. It is also a synergistic link where the couple is able to compliments each other's quantities and bring out the best in themselves.

Just like how when you work in a partnership over a project with another person, where there is opportunity to bounce ideas between each other, and their ideas may just be the missing piece(s) (and vice versa) to a blockbuster of an idea, just as how mixing blue and yellow paint gives you different shades of green.

On a more tangible level, it could be a simple thing, such as pooling up resources to invest in stocks with a lower commission, as opposed to buying twice. It may give you the opportunity to purchase at a better valuation instead of averaging up as well. It could even allow you access to means of generating passive income at an earlier age if even at all.

A union of two person grants the opportunity to prosper together, achieving much bigger targets than if they had not been together, and pursued their own goals separately, and enjoying the fruits of their labour earlier.

A union of two is more than just +100%. A union of two is exponential.