Dear Financial Adviser:
I was asked by the company I’ve worked in for 10 years now to take early retirement. How can I maintain my lifestyle with the retirement package I hope to get? What’s a good rule of thumb to follow?
Getting Worried
Dear GW,
You did not indicate your age, so I have no idea of how many more productive years you have ahead of you. Not all who retire nowadays are necessarily entitled to a senior citizen’s card as even “loss of confidence” or “redundant position” in the corporate world can strike both young and old alike.
You are now jobless and maybe unemployable, depending on how your recent exit is perceived. Of course, you can find another job, even if this pays less. Does status bother you? It’s good to put that aside for now.
I presume you already got your retirement pay, whether enhanced or not. You take this amount and then divide this by the annual cost of your existing lifestyle level. The numerator (your retirement pay) is hopefully bigger than your denominator (your living expenses for one year) and then you will come out with a number hopefully higher than one. The resulting dividend (in the arithmetic sense) represents the number of years you can enjoy your current lifestyle without further revenue enhancements.
Of course, lifestyle choices can be cut back to just meals and commuting to the mall for the aircon. This will increase the number of years maintaining your subsistence level. Remember that eating out is no longer chargeable to representation expense — lunch with client with flawless skin?
This simple formula is flexible too. You may sell some assets like properties, art works, and cars, if you have them. Your nest egg may also be earning money from investments in fixed-income securities or extending high-interest loans to small bakeries to cover daily expenses. Then it is only the uncovered residue that must be re-computed. All these calculations are premised on the amount of retirement and savings you have at the start of your retired status.
Anyway, try to get a new job, maybe as consultant on corporate retrenchment.
******
Dear FA:
My husband and I separated recently. We have two kids in schools abroad. It was my idea to send them overseas to broaden their perspective. Should I then be the one to shoulder their tuition and living expenses?
Single Mom
Dear SM,
Part of your problem is legal and probably covered by the terms of your separation. I can only address the financial side of your question. Nowhere in conjugal economics was there ever a rule that said — if it was your idea, you should shoulder the cost. Women’s ideas, say a trip to Madrid or a Birkin bag, are often turned into reality by the breadwinner, who may or may not be a professional boxer.
Even as feminists have pushed for equal wages in the workplace or in broadcasting, they get fuzzy when it comes to who pays the bill for their wants and needs. Women’s rights advocates always pick up their own share.
I am presuming that the kids in question are biologically linked to your former partner. If so, he should shoulder part if not all the schooling cost. This is either covered by your terms of separation or not. The matter of paying the bill also depends on the emotional terms of the separation. Do you and your “ex” still share a cup of coffee, without throwing the hot stuff in each other’s faces, when still un-sipped?
If the ability to pay is asymmetrical, the one with the higher residual net worth may take up more of the cost. You also have the choice of bringing the kids home to study in local schools.
As a parting advice, try not to involve the new partner of either party in this discussion.
******
Dear FA:
I’m a woman gifted with good looks. Unfortunately, I am always short of money. Are there services you require to improve my revenue stream?
Care Giver
Dear CG,
I think you are not looking for financial advice but a job. It’s best to address your letter to a recruitment agency. You didn’t mention your age and the quality of care you provide. This will be helpful in your job application.
Tony Samson is chairman and CEO of TOUCH xda
