Financial independence: planning the number and the path

Work out your financial independence number from your own spending, check it against withdrawal-rate limits and CPF LIFE, and set a dated plan to reach it.

Most financial independence advice online uses round numbers and early-retirement stories based on American accounts and American data. In Singapore, CPF is locked until set ages, CPF LIFE pays a lifelong income later, MediSave and insurance premiums keep rising, and the housing system is unlike any other, so a number borrowed from elsewhere can be too high or too low for you. In this course you build your own from your spending, test it against the limits of the 4% rule, use CPF LIFE as a floor and put a cost on healthcare. You also plan what you will do with your time, which most plans leave out.

What you'll be able to do

• Calculate a financial independence number from your own spending, split into must-have and flexible costs
• Explain where the 4% rule came from and name four reasons it may not suit an early retiree in Singapore
• Estimate how much of your later spending a CPF LIFE payout could cover, and work out the size of the bridge years before it starts
• Build a spreadsheet model that shows how your savings rate and returns change the number of years to independence
• Calculate your own coast FI and barista FI figures
• Draft an order for drawing down cash, investments, SRS and CPF across your own accounts
• Estimate your healthcare costs before and after CPF payouts begin
• Write a plan for how you will spend your time, and test it with a trial run

Syllabus

Module 1: Find your number from what you actually spend

How to work out your financial independence number from what you spend, rather than from your income or a round figure, and how to turn a year of real spending into a first estimate you can defend.

• 1.1 Your number starts with spending, not a round figure
• 1.2 Essential and flexible spending
• 1.3 Spending after work is not spending today
• 1.4 Build your spending base

Module 2: Use the 4% rule with your eyes open

You will see where the 4% rule came from and what the research actually tested. For an early retiree investing from Singapore it is a starting point, and it promises nothing.

• 2.1 Where the 4% rule came from
• 2.2 Four reasons the rule may not fit you
• 2.3 Sequence risk: why the first years matter most
• 2.4 Choose your withdrawal rate and adjustment rule

Module 3: Put CPF LIFE under your plan as a floor

How CPF LIFE pays you an income for life from your payout age, how to use that income to cover your basic spending, and how to plan for the bridge years between stopping work and your first payout.

• 3.1 How CPF LIFE pays you for life
• 3.2 Use CPF LIFE as a floor under essentials
• 3.3 The bridge years before CPF pays
• 3.4 Build your two-part number

Module 4: Pull the lever that moves your date most

Shows why your savings rate usually affects how long it takes to reach independence more than your investment returns do. You build a model and test it with your own figures.

• 4.1 Savings rate works twice
• 4.2 A simple model of years to independence
• 4.3 Raise your savings rate without hating your life
• 4.4 Build your FI model

Module 5: Choose your version: full, coast or barista

You can reach financial independence without stopping work completely. Coast FI and barista FI need smaller numbers and arrive earlier, and you can work out each one from your model.

• 5.1 Coast FI: when you can stop adding
• 5.2 Barista FI: part-time work covers the gap
• 5.3 Full independence and the cost of the last stretch
• 5.4 Pick your version and write why

Module 6: Decide which accounts to draw from first

Once you start spending your savings, cash, taxable investments, SRS and CPF each open up at different times and under different rules. You will draft an order of drawdown for the bridge years and after, and Retirement & Estate covers the detail.

• 6.1 Know when each account opens up
• 6.2 A simple drawdown order
• 6.3 The cash buffer that buys you time
• 6.4 Map your drawdown plan

Module 7: Cost your healthcare before and after payout age

How your healthcare costs change once you stop working, what MediShield Life, Integrated Shield Plans, MediSave and CareShield Life cover as you get older, and how to add a realistic healthcare line to your number.

• 7.1 What changes when you stop working
• 7.2 Premiums rise with age
• 7.3 Long-term care and the safety nets
• 7.4 Add healthcare to your number

Module 8: Plan the life, not just the number

This module covers the non-financial side of stopping full-time work: identity, structure, relationships and purpose. It ends with a trial run that tests the plan before you commit to it.

• 8.1 What work gives you besides money
• 8.2 Plan it with your partner and family
• 8.3 Test the plan before you commit
• 8.4 Write your financial independence plan

Frequently asked questions

How long does the course take?

About ten hours over eight modules, including the exercises and the model. Most people take five to six weeks, since the trial run in module 8 needs time to complete.

Do I need to be a high earner for this to be useful?

No. Your number comes from your spending, and the model works at any income. For people on average incomes, coast FI and barista FI are often the most useful versions.

How is this different from Retirement & Estate?

This course plans your number and the path to it, including stopping work before the usual age. Retirement & Estate covers drawing down savings in retirement, CPF LIFE choices and estate planning in more depth.

Is this financial advice?

No. This course is education and does not replace financial advice. It shows you how to build and test a plan, and it never tells you what to buy. CPF rules, retirement sums, payouts and tax rules change, so check current figures with the CPF Board and IRAS, and talk to a licensed financial adviser about your own situation.

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