How much is enough to retire?

In my previous blog post show here I talk about keeping track of your monthly expenses. Why is it so important to keep track of your expenses? By keeping track of your expenses, you will know how much is your "fixed expenses" and also roughly know what is your spending habit and how much you spend yearly.

Once you got the sums, if you got retrenched one day or you declare yourself financial independence, you will know how much you need in order to sustain your current lifestyles. Of course, if you are retrenched and do not have sustainable savings or passive income to tide over the period, you got to adjust your lifestyles accordingly.

Beside keeping track of your expenses, it is still not enough. Why? Our age will keep on incrementing year after year. We need more money for medical expenses when we grow old. Our medical policy premium will be more expensive as our age is catching up. The medical policy premium you paid now will not be the same year after year.

Recently there is misleading news by Rebecca Lim, saying she is retiring from showbiz. In fact it was a collaboration between NTUC Income and Rebecca to promote on retirement.

So how much is enough? We must invest to generate more income. We do investment as we want our money to work hard for our retirement. Once our investment portfolio income able to generate an amount equal or higher than the expenses we spent yearly, we can actually declare ourself financial independence. We do not need our day job income to sustain our current lifestyles anymore. Isn't good if we are able to achieve that?