I am both excited and nervous about the uncertainties from next year onwards. Not getting a regular pay check does feel unnerving but crunching the numbers to get clarity helps soothe the nerves.
* Average over a period of 3 years
The projected income does look healthy. However, there are two issues with these numbers. The first being the capital gain might not materialise. Even though the projection of the capital gain is based on a mere 4% return (excluding dividend), I still can’t be 100% certain of that happening. The second being that half of the interest and dividend will go back to CPF. This is more irritating that anything else as I have sufficient resources to last me until I have access to my CPF.
What came out useful from this exercise is that I realise that the yield I am getting from my tranches of Singapore Savings Bonds is lower than I have expected. Tracing back, it is due to the May 2022 tranche with the initial year’s interest only at 0.87%. I have since submitted my redemption of this tranche and will redeploy it next month onwards either in the newer SSBs or SGS T-bills. I am also considering applying for SGS T-bills with my CPF-OA. While the difference might not be significant, every tiny bits add up.
On the expenses side, major expenses will not change much. Ad-hoc expenses are typically wants and that could be cut down if required. As much as possible, I will try to keep my insurance policies. However, besides hospitalisation plans, the rest can also be terminated if necessary.
While the situation is not ideal, the projection does indicate that I should be doing fine for at least the next few years, especially when I have at least 3 years of expense in cash and equivalent.