b. By Fidelity suggestion.
In order to retire comfortably, Fidelity suggested a person should have 8 – 10 times of their annual salary saved (ie total at EPF, ASB, Unit Trust, PRS, FD, Tabung Haji, etc) by the time they retire.
For instance,
Let say, you earn $10,000 per month.
Based on above, it means you need to have a total savings of $1.2 Mil ($10,000 x 12 months x 10 times).
So, how much you can safely withdraw when you retire?
As a rule of thumb, aim to withdraw no more than 7% of your total savings every year.
Example:
With $1.2 Million, should you take 7% annually for your expenses, then it will give you about $7,000 monthly (ie. $1.2 Million x 7% / 12 months).
With a monthly income of $7,000, it translates to 70% of your last withdrawn salary. That is a good replacement income for a comfortable retirement.