As I save, then invest (and then reinvest), I asked myself how much exactly do I need for my retirement. How much is it necessary for retirement in general?

Is there a magic number? If you ask yourself the question now, how much money do you think you need to retire?

Is it S$1M, 2M, or 5M? I believe the magic number really depends on the type of financial level you would like to achieve. The financial level will also depend on the lifestyle you would like to maintain during your retirement. I remember reading Adam Khoo's Secret of Self Made Millionaires which he articulated 4 levels of wealth.

Read: Four Levels of Wealth - Where are you at?

Many would be familiar with the various terms like Financial Security, Financial Freedom. Financial Independence, Financial Abundance, Absolute Financial Freedom etc. There are just too many terms trying to differentiate the level of wealth/ type of resources to support a standard of living.

Reaching Financial Security

What does Financial Security means to me? To me, it would mean 5 basic things that were paid without having to work to pay for them for as long as I live. These are the 5 things that are essential which includes 1) my home (mortgage); 2) utilities for the home; 3) food (home-cooked food, not fine dining); 4) basic transportation needs; and lastly 5) basic insurance cost.

I believe everyone will feel secured if they knew these 5 basic things were covered.

Short term goal - Financial Security

Most of us need a target to work towards. Without a goal in mind, it is difficult to take actions or plan for anything. Before I reach Financial Security, there is no point talking about Financial Freedom. Achieving Financial Security becomes my "shortest term goal".

Expenses

I mentioned the 5 basic things. So exactly what is my current home loan payment? Next, what is my utility bill each month? Next, how much money do I spend on food? Next, how much do I spend on basic transportation? Last, the amount of money paid for my insurance cost.

Let me estimate my expenses:

1. Home Loan Payment - S$2,269 monthly
2. Utilities - S$300 monthly
3. Food - S$900 monthly
4. Transportation - S$160
5. Insurance - S$884.36

Total monthly expense: S$4.513.36
Total expense in a year: S$54,160.32

So what's the price for my Financial Security?

I would need to have S$54,160.32 a year to cover these items without working. From my calculation, I would need the following amounts in my portfolio with the respective yields to achieve Financial Security:

5% yield - S$1,083,206.40
5.5% yield -  S$984,733.10
6% yield - S$902,672

This gives me a rough estimate and a goal to work towards.I would need to accumulate slightly above S$900k to have that S$54,160.32 a year for the rest of my life.

That will be the basic price for my retirement.

What is your price ($) for retirement then?

My emergency funds has been deposited in both OCBC 360 and Standard Chartered Bonus$aver account for quite some time now. At the start of the month, I decided to make the effort to open the UOB One account.

UOB One account offers up to 3.33% interest annually for up to S$50,000. Really?

There are always terms and conditions to the interest rate. The interest rates are tiered for the UOB One account. See below.

Source - UOB One Account - How it works?

So the effective interest is no where close to 3.33%. In order to get the highest effective interest rate possible, account holders have to 1) maintain S$50,000 in the account; 2) Spend S$500 on your UOB One Card every month for 12 months; and 3) Credit your salary of minimum S$2,000 monthly or make three GIRO debit transactions monthly.

Fulfilling all the above conditions, with a S$50,000 deposit, we will receive S$1,216 annual interest + another S$200 UOB One Card Cash Rebate.

Source - UOB One Account - Calculator

That will give us an effective interest rate of 2.43% (not considering the S$200 UOB One Card Cash Rebate). Not really the 3.33% on most of their advertisements as shown below.

Source - UOB One Account

Nevertheless, at 2.43%, I decided to move most of my funds to this newly open UOB One account from my Standard Chartered Bonus$aver account.

This will definitely made my money work harder for me. I should have made the change earlier. Just hate the hassle of changing the account, changing the GIRO transactions etc.

One time pain but a good place to park my War Chest. Better late, then Never.

Read:
1. Higher Interest on your Money
2. War chest... oh war chest.. when should I use you?

Time to check my progress.

Total dividends (9M 2015): ~S$4,681
Average Monthly Dividends: ~S$520

A breakdown of the dividends till September 2015:

1. Nikko AM STI ETF - S$643.44
2. Keppel Infrastructure Trust - S$503.15
3. Suntec Reit - S$586.49
4. OUE Hospitality Trust - S$245.50
5. Fraser Commercial Trust - S$73.98
6. CapitaMall Trust - S$165
7. Starhill Global Reit - S$307.20
8. Asian Pay TV - S$82.60
9. Comfort Delgro - S$595
10. Keppel DC Reit - S$106.80
11. Saizen Reit - S$146.50
12. Interests (from OCBC and SC) - S$1,225.57

With an average of S$500 a month, I still have a long way to the S$800 monthly dividend plan.

The interests from the banks (OCBC and Standard Chartered) have generated a substantial amount. I have recently transferred a sum of money to my newly open UOB One Account to make my money work harder for me. :)

Read: 1H 2015 Dividend Update - Growing My Passive Income

1. 5,000 shares of Suntec Reit.
2. 2,000 shares of Starhill Global Reit.
3. 8,000 shares of Accordia Golf Trust.
4. 1,000 shares of SMRT
5. 15 shares of Fraser Commercial Trust as I participated in their scrip dividend scheme (Few months back that I failed to record it down)
6. 869 shares of Nikko AM STI ETF.