Factors to Consider

There really is no single number that would guarantee everyone an adequate retirement. It depends on many factors, including your desired standard of living, your expenses (including any medical costs) and your target retirement age.

There are several key tasks you need to complete before you can determine what size of nest egg you'll need in order to fund your retirement. Likewise you may use our Baiduri Bank "Retirement Needs For Your Future" to calculate the amount require for your retirement. Below table show an example of what you need to consider:

Scenario Example

Decide your retirement age and estimated number of years you expect to live after retired

25 Years

Determine how much on average you may need per year to live on after retirement

($2,000 per month)

Determine your retirement savings goal by multiplying number of years you expect to live by annual amount

25 years x $24,000 = $600,000

Calculate how many years for you to save from now until retirement

Retirement age - current age = 30 years

Determine how much you need to save each year

$600,000 / 30 years = $20,000

How much you need to save per month

$20,000 / 12 months = $1,666

This calculation is purely for illustrative purposes and is exclusive of inflation. You may also try out the Retirement Calculator provided by TAP at

Keep Inflation In Check

Retirement planning requires time planning spanning several decades, therefore you need to consider the effect of inflation. Inflation is a rise in the general level of prices of goods in an economy over a period of time.

In Brunei, inflation for 2011 was estimated at 2%*.

As per the example illustrated above, the retirement saving goal is $600,000 (in today dollars) nest egg 25 years from now. To express this in the dollars of 25 years from now, we simply multiply $600,000 by 1.02 (inflation rate of 2%), 25 times.

  • Nest Egg = $600,000 x 1.0225
  • Nest Egg = $600,000 x 1.6406
  • Nest Egg = $984,360

*Source: CIA World FactBook

Likewise, you may use a financial calculator to calculate the future value of the amount by following the below steps (using Casio FC-100V):

Step 1: Press "CMPD"
Step 2: Select "n" and key in "25" then "EXE"
Step 3: Select "i%" and key in "2" then "EXE"
Step 4: Select "PV" and key in "600000" than "EXE"
Step 5: Select "PMT" and key in "0'
Step 6: Select “FV” and press "SOLVE"

As shown above, a $984,360 nest egg is much larger than $600,000. This is because of the effect of inflation, which causes the purchasing power to erode and wages to increase over time.

Hence, it is important to keep inflation in mind when you determine how much you need to save for your nest egg every month by simply checking the inflation number each year and revise your contribution accordingly.

Questions you may have about Retirement Planning

  1. Why do we need to plan for Retirement?
  2. How much will I need for Retirement
  3. Where will my money come from?
  4. Troubleshooting and to Bridge the Retirement Gap
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