Money Matters

How much do I need to retire ?

Ms Lim's prudent attitude to handling money stems from her poor family background and her profession as a human resource practitioner, which requires her to interview job candidates.
Ms Lim's prudent attitude to handling money stems from her poor family background and her profession as a human resource practitioner, which requires her to interview job candidates.PHOTO: MIKE LEE FOR THE STRAITS TIMES

HR practitioner Lim Chiu Mei is a meticulous saver but worries that she may not have enough to fall back on should a debilitating illness strike

While many people remain pretty clueless about their financial situations, human resource practitioner Lim Chiu Mei, 53, has all the information about her money matters at her fingertips.

Not only is she meticulous in how her cash is invested, but also she has given much thought to her retirement lifestyle, although one aspect has eluded her.

Ms Lim wrote to Money Matters asking: How much would she need in her golden years and what if she were struck with a debilitating illness like cancer?

In an interview with The Sunday Times, Ms Lim, who plans to retire by 60, says it is easier to plan how much you need at retirement if you assume good health with the house fully paid up and no other major financial commitment.

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"But when one is sick, things change completely. You never know when you get sick so I plan for the worst case," she says.

"I have an integrated Shield (hospitalisation and surgical) plan, but once I'm discharged and still require nursing care, I will need a maid or move to a nursing home."

Outpatient care is typically not covered under hospitalisation insurance plans.

When it comes to her desired retirement lifestyle, Ms Lim says she wants a "comfortable life with good-quality food" like cod fish, salmon, tenderloin, cherries and blueberries, besides being able to dine at mid-price restaurants twice a week. She would also like to go on vacations to Asia, Europe and the United States two to three times a year, flying economy class on Singapore Airlines.

"My top financial goal is to live a more carefree life without having to worry about money.

"And if I am sick, I would like to stay in at least a B1 class in a restructured hospital, and engage a maid when I am recovering at home. Or go to a nursing home where they treat their patients well and with dignity," she adds.

Stoking her fear of contracting a life-threatening disease is her family medical history. Her father died of stomach cancer when he was 55 in 1990 and her mother was 74 when she passed away from breast and colon cancer in 2008.

A disciplined saver, Ms Lim says her prudent attitude towards handling money stems from her poor family background and her profession, which requires her to interview job candidates.

Some of these interviewees have lost their jobs in their prime due to company restructuring or an economic crisis.

To make matters worse, some had committed heavily to properties and are sole breadwinners.


This led Ms Lim to consciously limit her financial liabilities by not over-committing herself, and over the years, she cultivated a discipline in building a financial buffer, mostly in cash. A self-professed conservative investor, she tried investing in stocks and unit trusts but without much success.

Ms Lim has two annuities - bought using cash and her Supplementary Retirement Scheme funds - which will provide a total monthly payout of $1,200 when she reaches 65 years of age.

She plans to put aside about $250,000 to satisfy the Enhanced Retirement Sum (ERS) criteria - under the national annuity CPF Life scheme - when she reaches age 55. The ERS will be $241,500 next year.

Her annuities, together with CPF Life, will provide a monthly payout of about $3,000 from age 65 for life. She has a critical illness cover of about $150,000. Besides an integrated hospitalisation Shield plan for B1 ward with a full rider for deductible and co-insurance, she has a basic Eldershield plan.

A version of this article appeared in the print edition of The Sunday Times on July 26, 2015, with the headline 'How much do I need to retire ?'. Print Edition | Subscribe