Retirement planning in 6 steps
Put current spending, inflation, MPF, personal savings, a FIRE target and retirement income on one timeline instead of projecting decades from one return assumption.
Who this is for: For anyone asking when retirement is possible, how much to save or whether MPF is enough.
- 1
Measure one year of real spending
Retirement starts from spending, not income. Separate housing, healthcare, family support and irregular large expenses.
Remember: Separate annual essential and flexible spending.
Organise cash flow - 2
Carry inflation into future spending
Today's spending will not buy the same basket decades later, and healthcare or housing may not move with headline inflation.
Remember: Test at least two inflation assumptions.
Calculate purchasing power - 3
Separate MPF contributions from projected balance
Monthly contributions follow statutory income bands, while final balance also depends on time, returns and fees.
Remember: Verify current contributions, then project with a conservative return.
Project MPF balance - 4
Build a retirement target range
The 4% rule is a starting point; retirement length, allocation and sequence risk affect a sustainable withdrawal rate.
Remember: Use a range rather than one falsely precise target.
Build FIRE scenarios - 5
Work backwards to monthly saving
Turn the gap into an actionable monthly amount. If it is unrealistic, adjust timing, spending or risk rather than forcing a high return.
Remember: Recalculate after pay rises rather than freezing the amount for years.
Work backwards from the goal - 6
Assign roles to retirement income sources
Steadier sources can cover essentials while other assets handle flexible spending and growth. Liquidity and withdrawal restrictions matter.
Remember: Do not treat MPF, annuities and investments as interchangeable.
Separate income sources
Work through the chapters in order, but return whenever your income, rates or goals change.