How much pension is enough?

In a post I wrote in September 2021, “Full-time investor, not attractive or fascinated” I mentioned my views on the pension figures of Taiwanese people. Please note that these are the figures and views before global inflation in the last three years. I will quote this paragraph here.

Table of Contents

Financial preparation

You need to have an investment portfolio large enough for retirement: In Taiwan, this requires you having any form of liability or debt, a your own house without mortgage, not renting, good health condition, no need to hire someone to take care of your daily life around the clock. I personally think that a single person should have at least NT$8 million (US$288,000) of net wealth, which of course is the “minimum material requirement” estimated in 2021. I want to emphasize that it is the “minimum material desire”, that is, not competing with the world, no extra desire; only keeping “simple” clothing, food, housing, transportation and entertainment.

There is no point in arguing about whether this number is enough, because everyone’s living standards are different. If you want to travel around the world from time to time after retirement, move to the center of the city to buy a new house, and have a servant to serve you, of course, it is another matter. And you must own your house. If you are not single and have no your own house, NT$15 million ( US$500,000) should be very dangerous.

Again, don’t underestimate the power of inflation. For this topic, please see my blog post “Tax, inflation and rate are the top three serious killers to investors“.

Office workers’ expectations

Yes123 job search website pointed out that under the premise of “living without worries”, Taiwanese office workers should prepare for their originally estimated retirement funds.

How much does it cost? The survey shows that the average is as high as NT$26.23 million; unfortunately, as of now, the achievement rate is only 24.8% of NT$26.23 million.

Numbers given by the government

According to the 2023 data released by Taiwan’s Department of Budget, Accounting and Statistics, the “average monthly consumption expenditure per person” is NT$25,726: If you retire at the age of 60 and live to the age of 80 on average, the 20-year expenditure will be approximately NT$6.17 million.

Disclaimer

The content of this site is the author’s personal opinions and is for reference only. I am not responsible for the correctness, opinions, and immediacy of the content and information of the article. Readers must make their own judgments.
I shall not be liable for any damages or other legal liabilities for the direct or indirect losses caused by the readers’ direct or indirect reliance on and reference to the information on this site, or all the responsibilities arising therefrom, as a result of any investment behavior.