Millennials have been and will continue to be big spenders. But when contemplating your retirement fund, especially an expensive country like Singapore, consider toning down the lifestyle a little.
We are not talking about transforming into a minimalist; instead, our ideas will help you build up a healthy nest egg.
Spare a thought for your future. Here are 5 luxuries to give up in order to retire better
1. Domestic help
Domestic help is as much a necessity as it is a luxury, depending on how you look at it. But one thing remains constant – the cost of hiring a domestic helper. You could be a working couple, a wealthy family, or a family who needs elder-care, this is one luxury that eats away at a huge chunk of your income.
Factor these in:
- Most people across the world do not have domestic helpers. Even the high-income millennials in developed countries cannot afford a full-time helper. So, you will not be an exception.
- Using options like calling in a part-time helper few days in a month will be much kinder on your pocket.
- Managing your own home and doing your own work makes you less dependent. It will be easier for you to move countries and explore the world, should an opportunity arise.
Costs: A live-in domestic helper costs you about S$700 a month including salary, government levy, work permit, insurance, medical check-ups and travel expenses. Add food, toiletries and one-off costs like agency fee – which is about S$1,000 – and you are looking at spending upwards of S$10,000 annually. Put this money into a saving fund and it will take care of you later!
2. High-end cars
Even with the COE hitting an all-time low these couple of months, it’s hard to deny that owning a car in Singapore is still expensive. With the government going all out to de-incentivise car ownership in terms of making it cost the moon, giving up cars, especially high-end models, is a good move towards building up a healthy retirement fund.
The amount you will spend on fuel, maintenance, taxes, and certificates, along with the price of your wheels should be enough to see you through a large chunk of your retirement. With the universe conspiring against you owning a car, take a hint and hop onto the MRT or a cab instead.
Factor these in:
- Despite all the delays the MRT has seen in recent years, Singapore still ranks amongst the world’s best metro systems in the world.
- While taxis are expensive, they aren’t prohibitively so, especially when you compare it to other countries. In fact, our taxi fares are 20th cheapest in the world.
Costs: An Audi A6 is priced upwards of S$200,000, excluding the ERP, COE, VQS and road taxes. Looks like just the lump sum one would like to see in a retirement fund figure crunching list.
3. Designer brands
Designer brands are another factor that help the millennial commit retirement plan harakiri. Singaporean millennials are particularly partial to expensive clothes, watches, bags, and shoes.
It’s close to impossible to ignore the magnetic pull of a luxury handbag or timepiece, especially when we need an outlet for all the stress we face at work. But if we want to retire well, it’s high time we give up some luxuries.
Costs: Fendi’s Large Leather Logo Shopper, priced upwards of a whopping S$5,100, will be of less help while you shop and more if you kept the money intact for your old age!
And where do you flaunt these ridiculously priced clothes, watches, bags and shoes? At your next overpriced bubbly brunch of course. The ladies who lunch, and gentlemen too, may consider an invigorating conversation over a scrumptious international menu and free-flowing champagne a necessity.
But if saving for retirement is anywhere on the cards, these leisurely lunches, most often fueled by expensive alcohol, must be excluded or at least minimised in your weekly itinerary. Every Sunday cannot be champagne brunch Sunday!
Costs: The Line at Shangri la helps make a dent in your saving plans with an S$98++ Sunday brunch, which becomes an S$138++ affair with free-flowing champagne and wine. Make it one for the special occasion we say!
Condos are expensive. We may want to buy a fancy private condo, but for that, you can forget about any housing grants that may help you with the purchase. Instead, there will be the hefty mortgage that will greet you each month. In such a scenario, you can wave your retirement fund goodbye.
Costs: A re-sale condo almost anywhere in Singapore will cost you upwards of S$1,200,000. Whereas, a resale HDB flat in a similar vicinity could save you 50% of that.
What else would you give up or forgo in your thirties in order to retire with more?