Is 4% withdrawal rule in trinity study applicable in Singapore?

 The 4% withdrawal rule, popularized by the Trinity Study, suggests that retirees can safely withdraw 4% of their initial retirement portfolio balance each year, adjusted for inflation, without running out of money over a 30-year period. While the rule has been widely discussed and used as a guideline in various contexts, it's important to note that its applicability may vary depending on individual circumstances, economic conditions, and geographic locations.

In the context of Singapore, there are a few factors to consider:

1. 1. Cost of Living:

   • Singapore has a relatively high cost of living, and property prices, in particular, can be significant. The 4% rule might need to be adjusted based on your specific retirement expenses.
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2. 2. Currency and Inflation:

   • The original Trinity Study was conducted in the United States, and the 4% rule was based on U.S. historical data. Currency exchange rates, inflation rates, and economic conditions in Singapore may differ, affecting the rule's applicability.

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4. 3. CPF (Central Provident Fund):

   • Singapore's CPF system can have an impact on retirement planning. It provides a source of retirement income for Singaporeans, and how you plan to utilize your CPF savings may influence your withdrawal strategy.

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6. 4. Longevity and Healthcare Costs:

   • Consideration should be given to potential increases in healthcare costs and life expectancy in Singapore, which may affect the sustainability of a fixed withdrawal rate over an extended retirement period.

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8. 5. Investment Environment:

• The performance of your investment portfolio in Singapore, along with prevailing interest rates and economic conditions, will also play a role in determining the effectiveness of the 4% rule.

My view is that as long as the flat is fully paid up. Take the public transport instead of a car.

The 4% withdrawal rule will definitely work in Singapore. Without a mortgage and a car, a family of 4 will only need $3,000. Effectively breaking down to $750 per person. Using $3,000 as the reference. The family would just need $900,000 in equities market (S&P 500) and will never run out of money for at least 30 years.