In the past, talking about money was generally frowned upon. I’m happy to see that there has been a significant increase in financial bloggers and youtubers that discuss personal finance in the recent years. Today, I would like to discuss how much a person’s net worth should be at ages 20, 30, and 40. This is a general guideline that anybody may use if they are trying to pursue financial independence, but it’s by no means an absolute rule.
Median Salary In Singapore By Age Group
According to MOM, the median gross monthly income from work (excluding employer CPF) is $4,500 for full-time employed residents. Moreover, this figure includes employee CPF and is what most of us see as our gross monthly salary. Furthermore it includes our employer CPF contributions, the nominal median income of full-time employed residents grew by 8.3% from $4,680 in 2021 to $5,070 in 2022.
As MOM’s data starts at the age of 15 to 19, do note that this data is only for full-time employment which is uncommon for this age group.
Personal Savings Rate In Singapore
The outstanding 39.95% personal savings rate set a record in 2020. Hence, this could be caused by the lockdown period, which is responsible for the higher savings rate.
The personal savings rate for the most recent 10 years is 30.46%.We will employ a 50% savings rate to get financial independence so that we can set high expectations for ourselves.
Guidelines for our Net worth research
Here are some assumptions we made:
- You start working at 23 and get a median salary
- You expect to retire at 60
- You save a constant percentage of your income
- The latest wages by age group stay constant from now till your retirement.
The table does not consider:
- Effects of inflation
- Wages before 2022
- Value of SGD
Note: The savings accumulated are exclusive of CPF and only include cash and/or investment savings.
Net worth research
| Age | Savings for the year (30.46% of take-home income) | Savings Accumulated | Savings for the year (50% of take-home income) | Savings Accumulated |
| 23 | $9,138 | $9,138 | $15,000 | $15,000 |
| 24 | $9,138 | $18,276 | $15,000 | $30,000 |
| 25 | $14,073 | $32,349 | $23,100 | $53,100 |
| 26 | $14,073 | $46,422 | $23,100 | $76,200 |
| 27 | $14,073 | $60,495 | $23,100 | $99,300 |
| 28 | $14,073 | $74,568 | $23,100 | $122,400 |
| 29 | $14,073 | $88,641 | $23,100 | $145,500 |
| 30 | $18,288 | $106,929 | $30,000 | $175,500 |
| 31 | $18,288 | $125,217 | $30,000 | $205,500 |
| 32 | $18,288 | $143,505 | $30,000 | $235,500 |
| 33 | $18,288 | $161,793 | $30,000 | $265,500 |
| 34 | $18,288 | $180,081 | $30,000 | $295,500 |
| 35 | $21,382 | $201,463 | $35,100 | $330,600 |
| 36 | $21,382 | $222,845 | $35,100 | $365,700 |
| 37 | $21,382 | $244,227 | $35,100 | $400,800 |
| 38 | $21,382 | $265,609 | $35,100 | $435,900 |
| 39 | $21,382 | $286,991 | $35,100 | $471,000 |
| 40 | $21,777 | $308,768 | $35,748 | $506,748 |
| 41 | $21,777 | $330,545 | $35,748 | $542,496 |
| 42 | $21,777 | $352,322 | $35,748 | $578,244 |
| 43 | $21,777 | $374,099 | $35,748 | $613,992 |
| 44 | $21,777 | $395,876 | $35,748 | $649,740 |
| 45 | $21,320 | $417,196 | $34,998 | $684,738 |
| 46 | $21,320 | $438,516 | $34,998 | $719,716 |
| 47 | $21,320 | $459,836 | $34,998 | $754,734 |
| 48 | $21,320 | $481,156 | $34,998 | $789,732 |
| 49 | $21,320 | $502,476 | $34,998 | $824,730 |
| 50 | $18,288 | $520,764 | $30,000 | $854,730 |
| 51 | $18,288 | $539,052 | $30,000 | $884,730 |
| 52 | $18,288 | $557,340 | $30,000 | $914,730 |
| 53 | $18,288 | $575,628 | $30,000 | $944,730 |
| 54 | $18,288 | $593,916 | $30,000 | $974,730 |
| 55 | $13,860 | $607,776 | $22,752 | $997,482 |
| 56 | $13,860 | $621,636 | $22,752 | $1,020,234 |
| 57 | $13,860 | $635,496 | $22,752 | $1,042,986 |
| 58 | $13,860 | $649,356 | $22,752 | $1,065,738 |
| 59 | $13,860 | $663,216 | $22,752 | $1,088,490 |
| 60 | $9,046 | $672,262 | $14,850 | $1,103,340 |
Saving money is an essential aspect of financial planning that is often overlooked. Hence, with the right savings strategy, you can achieve financial independence and live a comfortable life.
In this context, it is interesting to observe the significant difference in wealth accumulation between those who save 30.46% of their income versus those who save 50%. Hence, let’s take a look at the numbers.
If you save 30.46% (last 10 years average Savings Rate) of your income, you could accumulate a net worth of $106,929 by age 30, $308,768 by age 40, and $520,764 by age 50.
However, if you save 50% of your income, your net worth could amount to $175,500 by age 30, $506,748 by age 40, and $854,730 by age 50.
To achieve your financial goals, you must adopt a savings strategy that works best for you. It really depends whether you aim to accumulate wealth or save for retirement, the key is to start saving early and consistently. Thus, It is essential to note that your savings rate may fluctuate as your income and expenses change, but the critical factor is to maintain a consistent habit of saving.
In conclusion, discussing personal finance has become more acceptable in recent years, and it is important to know how much you should be saving at different ages to pursue financial independence. However, it is essential to keep in mind that personal finance is personal, and everyone’s situation is unique. Therefore, these calculations should be used as a guide and should be adjusted according to your individual circumstances.
If you are keen, check out our articles on other analysis: Trust Bank Referral, Diversification Strategies for a well-rounded portfolio and 8 Things I learnt from the DBS 2023 AGM.
Disclaimer: The information provided by LearnToInvest serves as an educational piece and is not intended to be personalized investment advice. ​Readers should always do their own due diligence and consider their financial goals before investing in any stock.