Tough to slash expenses

PHOTO: Tough to slash expenses

SINGAPORE - Even though he had started planning for his retirement when he was in his 40s, the expenses in the first year of retirement still took Mr Gn Luck Whye, 74, by surprise.

Mr Gn, who retired as a director of a travel agency in 2001 at age 62, says: "I wanted to cut my expenses by about half, but I was able to cut down by only about 20 per cent."

When he retired, his children were only aged two, six and eight. His Taipei-born wife, now in her late 40s, was then a housewife. She took on a job as a part-time tour manager to supplement the family income. But Mr Gn was not particularly worried about finances.

He had bought education insurance policies to cover his children's higher education and, as early as his 40s, he had consulted some good friends who were financial planners.

About 30 years ago, he bought a condominium and has been renting it out.

Over the years, he has used his savings to invest in bonds and blue chips. These give him dividends every three to six months. Since about 10 years ago, he has been receiving payouts from insurance annuity plans he bought over the years.

A few months before he retired, he worked out his sums. As his car was fully paid for and the walk-up apartment he lives in was almost loan-free, he figured the rental from his second property and income from his insurance annuities and investments should be able to give him about half of what he used to earn.

Hence, he planned to cut his expenses by about half.

He downsized his 2,000cc car to a 1,600cc one. The number of credit cards was cut from four to two. "Unnecessary things" such as cameras and branded watches were sold. He now uses his mobile phone to take photos.

Although he did not overspend in the first year, the family expenses went down by only 20 per cent, prompting him to look for other ways to trim spending further.

Overseas vacations every year were confined to nearby places such as Malaysia and Indonesia. Annual trips to Taipei to visit his wife's family were reduced to once every few years, on budget airlines. And instead of staying in hotels, eating out at restaurants or visiting areas outside Taipei, the family would stay with relatives in Taipei, eat in most of the time and go window-shopping.

Back in Singapore, the family ate out only on weekends or on special occasions; instead of restaurants, they frequented food courts or hawker centres.

After two to three years, Mr Gn was able to halve his family's monthly spending.

Although his wife, being frugal by nature, did not complain, he says his children "being children" sometimes gripe about his cost-cutting measures.

"But they are pretty reasonable people. Once I explain to them that I am no longer working and that we have to be prudent with our spending, they stop complaining."

He has a daughter , 14, and two sons, 18 and 20, in secondary school, junior college and national service respectively. He would turn down their requests for branded goods, but would relent occasionally when it comes to family holidays. "Once, they asked for a skiing holiday to South Korea and I agreed. I wanted to reward them for doing well in their studies."

For Mr Gn, who is an active church volunteer and a grassroots leader, the cost-cutting has not taken the pleasure out of retirement. "I find a lot of pleasure in simplifying my life. You find that there are many things you don't really need in life."

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