Tea with AK71: Breakfast and lunch for 96c.

What did I have for breakfast and lunch today?

Breafast: Oatmeal! My favourite!

A 1 kg pack of rolled oats costs less than S$5.00 and is enough for 20 servings or more. So, each serving costs 30c to prepare, perhaps. I would cook enough for 3 servings each time. Keep them in the fridge and bring 1 serving to work daily for the next 3 days.

Lunch: Cup noodles!

I used to eat instant noodles frequently but I have cut down on these a lot in the last few years. I bought some two nights ago when I went grocery shopping at NTUC Fairprice with my mother after taking a walk to the neighbourhood park together. Only $5.95 for 9 cups! That is 66c a cup! Cheap!

*Hot water courtesy of the office pantry.

Total cost of breakfast and lunch today: 96c.

Related post:
Inflation hits fried bee hoon.

Young working Singaporeans, you are OK. Really?

This was just in the news:

Young Singaporeans in the workforce today will have adequate savings in their Central Provident Fund (CPF) accounts by the time they retire, according to an independent study by the Ministry of Manpower.

A recent study using the Income Replacement Rate or IRR indicates that Singaporeans are adequately covered.

Pension economists measure retirement adequacy by using an IRR, which is the ratio of retirement monthly income to pre-retirement monthly earnings.

The study found that a median male earner who enters the workforce today will be able to achieve an IRR of over 70 per cent through his CPF savings.

For the female median earner, the equivalent IRR is 63 per cent.

These figures are similar to those of countries of the Organisation for Economic Co-operation and Development (OECD).

The IRR for the median OECD economies is 66 per cent. The World Bank recommends a range of between 53 and 78 per cent.

The rate is significantly higher in Singapore when it takes into account the fact that Singaporeans have their own homes when they retire.

Cash is freed for other living expenses as they do not have to pay rental fees.

With Workfare, which supplements the wages of low-income workers, the IRR is even higher -- at 93 per cent.

Read the full article: here

I find it impressive that a young Singaporean male who joins the workforce today would be able to have a retirement income equivalent to 70% of his pre-retirement earnings just by drawing on his CPF savings. I suppose this is assuming that he is gainfully employed without significant periods of unemployment till age 65.

I have always thought that it is impossible for us to retire and have a standard of living comparable to pre-retirement if we were to rely on our CPF money alone. Now, if someone is able to have an IRR of 70 to 93% at the official retirement age of 65, it comes rather close.

So, does this mean that people no longer have to make their savings work harder and learn how to invest their money to beat inflation? Ah, inflation!

I assume that upon retirement, our monthly withdrawal of our CPF money is a constant number. This is what CPF Life will do for us, if I understand it correctly. This means that our monthly "allowance" from our CPF would stay the same nominally till the day we bid farewell to this world or am I wrong? So, even though someone could have an IRR of 70%, that someone's standard of living could worsen with time due to inflation, could it not?

I would still encourage all Singaporeans to be more pro-active in managing their money and growing their wealth. It is risky to think that our CPF money will be enough, financially, to provide for our old age.

Of course, there are those who would like to retire before hitting 65 but that is another story.

Related posts:
1. SRS, CPF-OA, CPF-SA.
2. Do you want to be richer?
3. Wage slaves should be fearful.