You will build a year-by-year map showing where each year's income comes from.
Every lesson so far has produced a piece: a spending estimate, a floor sheet, a bridge, an order of accounts, a plan for SRS. This exercise joins them into one map, a row for every year from your last pay cheque to your planning age, so you can see where each year's money comes from and what is left in every account afterwards. It is the sheet modules 4 and 5 will stress and adjust, so build it carefully.
Allow about forty minutes. The worked example uses Jasmine's figures, all made up, and the CPF LIFE payouts in it are invented, with no link to CPF's real rates.
Make one row per year, from the year you stop full-time work to your planning age. Jasmine's run from 60 to 95, thirty-six rows.
Above the rows, put your assumptions in labelled cells: the return on each account, your inflation rate and your healthcare growth rate. Jasmine assumes, for this example, 5% a year on her investment account, 2.5% on cash and deposits, 4% on the funds inside her SRS, 2.5% general inflation and 5% for healthcare. All of these are before inflation, because her spending is in future dollars, as lesson 1.3 explained.
Then put in the balance of each account on the day you stop. Use a projection if that day is years away, and note it as one. Jasmine's projected balances at 60 are S$80,000 in cash, S$800,000 in her investment account and S$150,000 in SRS, about S$1,030,000 in total.
Add these columns:
Spending: essential plus flexible, from your floor sheet in lesson 2.4 Income that isn't from savings: part-time pay, CPF LIFE, any annuity SRS withdrawal, from your plan in lesson 3.3 From cash, from investments: what each account pays this year Closing balance of cash, investments and SRS, and their total
Jasmine's spending starts at about S$46,000 at 60 and reaches about S$129,000 at 95 in future dollars. Her income column holds S$18,000 of part-time pay from 60 to 62 and her invented CPF LIFE payout of S$19,200 a year from 65. Her SRS column draws the account down from 63 to 70.
For each row, the amount savings must cover is spending minus income minus the SRS withdrawal. Take it from accounts in the order you set in lesson 3.2, Which account to draw from first: cash first until it is used, then investments. If guaranteed income and SRS together exceed spending in a year, add the surplus to investments.
Then grow each account. A simple convention is to take the year's withdrawal at the start of the year and apply the year's return to what remains. Whatever convention you choose, use it in every row.
Each closing balance becomes the next row's opening balance. Fill the formulas down to your planning age.
Jasmine's map in practice: her cash pays 60 and 61 and is almost gone by 62. Her investments then carry the gap. From 63 SRS takes on a large share, and from 65 CPF LIFE does too. Her total savings, at the end of each year, run roughly like this: about S$1,049,000 at 60, S$1,106,000 at 65, S$1,186,000 at 70, S$1,246,000 at 80, S$1,184,000 at 85, S$1,020,000 at 90 and S$710,000 at 95.
Add a column that flags any year in which the accounts can't cover the amount needed. The first flagged year is the age your plan fails under these assumptions. If nothing is flagged, read the total in the last row.
Jasmine's plan doesn't fail under her central assumptions. She reaches 95 with about S$710,000 left.
Before you celebrate a result like that, convert it to today's prices. Divide by one plus inflation, raised to the number of years from now. Jasmine's S$710,000 at 95 is forty years away, which at 2.5% a year is worth about S$264,000 at today's prices: a useful margin, and a smaller one than the headline figure suggests.
Also note the shape. Her balance grows until about 80, because in her late sixties and seventies the returns on her investments are larger than what she takes out. After 80, healthcare costs and inflation push spending up faster than her level CPF LIFE payout, and the balance falls more steeply each year. Most plans with a level floor have this shape, and it is why lesson 5.3, Living longer than you planned, looks hard at the years after 85.
Change one input and watch the result move. Jasmine removed her part-time income. Her plan still reached 95, but with about S$418,000 left instead of S$710,000. Three years of part-time work at S$18,000 a year moved her end balance by nearly S$300,000, because every dollar earned at 60 was a dollar left invested for thirty-five years.
If changing one input makes your map behave strangely, such as a balance jumping up for no reason, check that each closing balance links to the next row's opening balance, and that every return points to its assumption cell.
A finished map has one row per year, assumptions at the top, the starting balance of every account, a column for each source of income and each withdrawal, closing balances, and a flag for any year the plan fails. Under it sit two figures: the age the money runs out, or the amount left at your planning age, and the same amount converted to today's prices.
Now build your own. When it is finished, read the bottom row and the flag column for the activity.
Build the map and write the age at which your money runs out under your central assumptions, or the amount left at your planning age.
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