STRUGGLING TO RETIRE! : They Have A Few Properties But What's Wrong In Their Retirement Numbers?

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Today we have a case of a elderly couple thinking who have retirement concerns. They have some wealth but the expenses right now are above the cash flows in. What is my advice to them in what to sell and how to plan their finances moving forward.
0:00 Introduction
0:45 Renting HDB vs Lease buyback
5:00 CPF balances
6:05 Income vs expenses
9:27 Malaysia property
11:53 Advice on old folks
12:33 Insurance premiums and suggestions
17:47 Can they retire
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About Josh Tan:
Josh holds a degree in Accounting from NTU. In 2016, he co-founded the financial education website TheAstuteParent to provide detailed insurance plan analysis and financial planning tips.
As a ChFC Charterholder, Josh has agreed to be bounded by the ChFC®/S Code of Ethics. This includes, among others, acting in a professional manner when it comes to conducting due diligence on primary and secondary sources of investment-related data, and articulating his investment opinions based on his research and beliefs. Based on his research and analysis, he highlighted his beliefs and opinions, and illustrated the concept of time value of money, as of the time of the video.
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[@joshconsultancy]

ENGAGE Josh Tan on a fee for full retirement planning NOW - Hear the IMPROVEMENTS you can make IMMEDIATELY! ►‌ www.theastuteparent.com/josh-tan

[@JRambonian]

Just downgrade to 4rm HDB can easily cash out 800k difference and continue to rent out 1-2 rooms. Max out 400k SSB for a couple and invest the rest in TBills, reits, bond etf. Can also top up RA to ERS if really duno what to do with the cash. They are so “rich” liao still worry not enough 😅

[@mattseto1054]

Accumulation of wealth but sadly don’t know how to spend it in retirement… cannot bring along when u are dead. As we plan for our retirement, also as important to learn how to spend the nest egg.

[@kevinho4504]

I am the opposite, HDB asset and a few millions in dividend stocks such that I go on vacations 3 times a year, dine out every weekend, enjoying my life to the fullest with sporting activities and not worrying about what tomorrow will bring. ❤

[@joshconsultancy]

Tsk you're too good!

[@kevinho4504]

@@joshconsultancy not that I am good Josh, I just know what I want and that is to enjoy my life without worrying about $, going yo restaurants without worrying how much the meal costs, maintaining a active lifestyle with my regular gym, running and wakeboarding activities. I still have another 6 more years to retirement and still having a good corporate career too, resulting in me not needing the dividends for living expenses. So I have been reinvesting dividends for compounding effect for 10 years with liquidating twice during this period due to covid and Ukraine war and buying back lower. I am preparing to liquidate everything again come next year once I hear about any impending military activities in China/Taiwan (if the storyline gets that far).

[@MaxGarmin]

Thanks Josh for the wonderful insights and advice!

[@joshconsultancy]

No probs. Share with someone who should hear it too 👌🏻

[@JS-ev4xc]

Frankly speaking, i don't know why there is even any concerns for planning at their age and no children to pass down the wealth. Just convert everything to cash and enjoy the remaining life time, they are considered filthy rich liao.

[@joshconsultancy]

Home convert needs a downgrade. And as shared, 4rm and below HDB to avoid cooling period

[@JS-ev4xc]

@@joshconsultancy I mean those items that can be monetized, those that deem too much hazzle just leave it as it is. Just the Life Insurance Policies alone, they can get back half mil, insane enough right? But downgrading to smaller housing I reckon is even a blessing being easier and cheaper to take care too. c",)

[@xiaoxin5689]

@@joshconsultancy Downgrade from their current condo to another HDB may not a good option, as they are still own a HDB with rental income. To downgrade, they need to sell out their current HDB which give them monthly income of 2.7k currently. They might review their bigger expenses on insurance premium first..

[@lynnchua1890]

The hdb is theirs or her mom’s?

[@Notsosmartyetnotsostupid]

Regardless how you plan or budget, there will always be unexpected spendings that resulted to insufficient savings. So the rule is save or generate more recurring passive income with surpluses even if you are retired. 😅

[@aave865]

Malaysian properties are never a good capital gain investment be it landed and condo. I would suggest to anybody who wish to retire in Johor to rent a whole house or condo on a yearly basis so that you could get a better rental rate. But since the couple has already purchased the units in Malaysia and have paid them in full, the best course of action would be to rent one of the propery out and retire in the other one. Do not be discouraged by the traffic jam because the RTS link will be ready in 2027 it could be a game changer for those people who already owns a property there by then. If lowering the daily living expenses is a top priority then owning a property there and retire or renting one there on a long term basis makes sense. But bear in mind though as I mentioned earlier forget about any capital gains. Any resale will 90% be a loss. But then property there are cheap get a 99 years condo for only SGD 100k, armostise it till you pass on...its a no brainer calculation it is very much more affordable than staying in our old folks home.

[@user-ff2kd8ex8g]

Makes good sense, the way I see it. Initially, I thought I could stay in a cheaper area of Malaysia further north. But with the RTS coming up soon, it is starting to make more sense now to remain closer to home.

[@money3ss]

1 condo pty, 2 Msia Pty, Several Insurance, equity, CPF, plus anything I missed with no debt - still need to downgrade... well I m not surprised cos my annual expenses is more than her but it wld be hard for most to fathom. Portfolio definitely more complicated than mine.

[@Star-008]

Many Singaporeans don't understand that Singapore is a city state and doesn't have a hinterland. In China, for example, people worked in first tier cities all their lives but return to their hometown countryside for retirement where the air is fresher and expenses are low. Retired Singaporeans do not have this option and can only retreat to developing countries. However, retirement visa cost is rising and their overall expenses much higher than the natives.

[@joshconsultancy]

Interesting perspective

[@andysaw9443]

Once investment made in oa and later I sell does the principal and profit goes back to oa

[@joshconsultancy]

yes

[@andysaw9443]

Is industrial properties a good investment? There are seminars promoting them for rental. Does it make sense and does industrial appreciate or they are flat

[@joshconsultancy]

Ive this tutorial "Investing Into Commercial Property BETTER Than Buying REIT???" - kzbin.info/www/bejne/lWLMh6d-qd6DmqMsi=0NOotv_-VDVjIt_9

[@AhWing89]

My parents are also hard to change. Whatever plan is better to plan it for current or next generation. JB traffic jam is not an issue if they plan to retire there because they can go back Singapore at non-peak hours.

[@joshconsultancy]

Think perhaps there is still semi/retirement work in real estate and elderly needs to come back

[@AhWing89]

@@joshconsultancy I see, if the elderly needs to adhere to some working hours rules, then there is a risk they may faced a jam.

[@joee2743]

Statistically. SG Men & Woman die around 80+ years old not 90 to 95. With men dying slightly earlier. Not sure what gives them the confidence they will beat the stats but all the best to them. Hope they're able to enjoy retirement... Many options for them. Let them pay for professional financial advise from Josh Tan.

[@joshconsultancy]

Got her permission to do this case hopefully to impact more retirees. =) If its a good fit, Id be happy to take on a fee based work.

[@kinboon3138]

Actually, I don’t know what issue are they facing. They have a lot of options. Yes, may be too many options.

[@joshconsultancy]

Question is what to liquidate to solve negative cashflow. Liquidating is hard

[@shawnang280]

I don’t see they have any issue. They are rich enough. Sell all Malaysia properties if possible. No loan already nothing to worry about

[@joshconsultancy]

They wanted to hear what should be considered for monetizing. On other hand in retirement, we need cashflow and not a pile of cash coming back that need reinvesting. If interest rates go back to 1%, there would be a dilemma because should they rebuy property for higher rent income again? Hope it explains k

[@MH-ob3pj]

How about they move to Malaysia and rent out their entire condo instead? I don't think their jobs require them to come into SG everyday. If I m the husband, I may quit the job when I stay in Malaysia. As for the wife, can you schedule your property transaction to avoid the traffic at causeway? No point leaving Malaysia house empty. The extra rental may be enough to last you for the next three years. After that, with cpf and private pension payout, your cashflow problem is resolved. The elderly will not move, so u move....😊

[@joshconsultancy]

Good points raised

[@JamesDean6133]

Move to JB, rent a newish home with enough rooms for mum and aunt. Rent out homes in SG and Iskander, live off the rental income Let cash in bank account deplete over next 3 years

[@joshconsultancy]

Feasible 👍

[@chia_william]

Can do reverse mortgage for their HDB. Since no children to pass on..

[@joshconsultancy]

Yes ive suggested reverse mortgage on own condo>

[@makwoon3635]

By right with a few properties and once fully paid, the money should be rolling in.

[@joshconsultancy]

If able to rent well. As in case, the rent is not sufficient

[@ocswoodlands]

over leveraged. iskandar PROPERTIES- not wise. Money losing

[@makwoon3635]

@@joshconsultancy at first I thought it was all Singapore properties. Iskandar properties CMI de...

[@Phonedumb]

I don't see any problems with retiring leh.... so much wealth already. Sounds like the typical sort that dun wanna liquidate anything accumulated... yet complain not enough to get by. So much in CPF too... these sorta people don't need advise (won't follow anyway). They need to go through their self inflicted deprivation and come to terms that they can't have their cake & eat it too. 😂

[@damyeuful]

As they have no kids, I think they should monetise some assets and start enjoying life and chalking up experiences before they become too old and health catches up. Unlike myself, where my wife and I are legacy planning for our kids future as well. My 2 cents worth.

[@damyeuful]

Have seen colleagues who become weak and health problems prevent them from holidaying and experiencing the joys of travel.

[@jamesl2590]

Bohua la...Can't even enjoy life in their prime years. The utility from spending for old age activities can't be compared to youth.

[@ignatiusee3564]

If one live beyond 80. It's a curse and not a blessing. Need to worry about living expenses, poor physical and mental health etc. Do focus on how to die ie: AMD, DNR etc

[@joshconsultancy]

No la, can be old and healthy =0

[@ignatiusee3564]

I work in healthcare. Old and healthy is rare.

[@joejoe6136]

I stayed in iskandar for 7 years already , I have 5 property here all rented out since took keys few years ago(year2017). Not sure why they can't rent out.

[@joshconsultancy]

Is it hard to find tenants? There seems oversupply with Country garden estate. How is yield roughly?

[@joejoe6136]

@@joshconsultancy if example, my sis in law looking for landed in Sunway iskandar, the selling price now is Rm 740k The market rental here now is Rm 3500

[@joejoe6136]

@@joshconsultancy country garden ? Means forest city ? That area is not a convenient area . Check jb town area , medini ,puteri harbour. Jb town like RnF ,skysuite rental yield is very high.

[@louth1770]

Its cruel to see the old folks placed on old folks place, like prisoners in their confirned spaces.