Living Enjoyable Years After Retire, Can I?

Regardless of age, ask yourself this question: "If everyday in the rest of my life were a Saturday, what would I do?"   

Of course, the answer would depend on the size of your disposable savings and investments, and what kind of lifestyle that amount would afford you. 

Retirement is something most of us don't think about at 25 or 35. We tend to assume that it's either a long time away, or that it doesn't cost much, or that there will be grown children to depend on. The truth is, there is no guarantee that your children --that you already have or in your imagination-- will be able to support you financially in the future. Moreover, many people are still active, healthy, and will remain alive for decades to come at 55. If you don't have the funds to support your activities, you will eventually become old, miserable and prone to sickness.  

Retirement, or whatever you call that moment when you can start living without your job, takes money. Let's assume that your house and car are paid off, your children are grown and no longer your dependants, and that you are debt free. You will still need groceries for 2-3 people in the household, probably need to employ domestic helpers and have hobbies --eat out once in a while, watch movies and go traveling. 

Take a look at your lifestyle today, then imagine your expectation when you retire. If you are happy with your current lifestyle, multiply that expense items with the number of years you will pass until you reach that desired retirement age --of course by estimating the price increase due to annual inflation. 

Here is an illustration of your spendings, with note that you don't have a serious health problem and you have adequate insurance coverage: 

Your CURRENT living expenses Modest lifestyle Comfortable lifestyle Luxurious lifestyle
Monthly grocery (2-3 people) Rp 1.6 million (Rp 400k/week) Rp 3 million (Rp 750k/week) Rp 6 million (Rp 1.5 million/week)
Transport Public transport/no car or driver Car only, no driver Car + driver
Household assistance None One live-in Two live-in
Recreation (shopping/go out) Rp 500k/week Rp 1 million/week Rp 2 million/week
Travel yearly Domestic traveling Rp 5 million Within the region Rp 10 million Across Asia or beyond Rp 20 million


Let's say that the yearly inflation rate is about 3.5%, you'll quit your job or retire 25 years from now and continue living 25 years from now. Based on calculation made by LiveOlive, you will need this much when retirement comes:

Your CURRENT living expenses Modest lifestyle Comfortable lifestyle Luxurious lifestyle
Amount needed at retirement (inflation adjusted) Rp 2.7 billion Rp 6.2 billion Rp 13.8 billion

Do you think that's achievable? Stay tuned for our next post, " Reaching 3 Billion" for insights on how it is actually possible. With proper planning, anyone can plan decent retirement years.

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