← My Financial JourneyChapter 13

Who pays you when the paycheck stops?

Retirement swaps one paycheck for several smaller streams that start at different ages and are taxed in different ways. Sort them, count each one once and after tax, and think in today's money — and the most common ways a retirement plan lies to you disappear.

8 min read·Chapter 13 of 15·Next: Will it last?

Three kinds of retirement money

While you work, one paycheck pays for almost everything. Retirement replaces it with several smaller streams, and they behave differently enough that it pays to sort them first:

For life

Pensions that pay every month

A state pension, an annuity. A fixed age to start, a monthly amount, usually until you die.

A pot

Money you built up

Savings, investments, a workplace or personal pension account. A balance that grows, then gets drawn.

Carries on

Income that doesn't need you

Rent from a flat you own, a business that runs without you. It was there before and stays after.

And one stream that does not belong on the list: your salary. It is the thing being replaced. Counting it after you retire is the most common way a plan lies.

When each one starts

The streams don't start together. Here is the couple from Chapter 12, who plan to retire at 65:

Each bar is one source of money, from the age it starts. The dashed line is retirement.

Read it from left to right and the shape of the next forty years appears. Salaries until 65. A workplace pension that pays for ten years. A state pension for life from 65. Rent all the way through. And savings filling whatever is left in each year — which is why the gaps in Chapter 12 were worked out year by year, not as one average.

After tax, always

A pension statement shows the amount the scheme pays. What reaches your account is that amount after tax — and different kinds of money are taxed differently, even in the same country. A plan that adds up headline figures is spending money that was never yours.

The same couple, a month at 66
Source	Headline	After tax
State pension	S$1,250	S$1,200
Workplace pension	S$500	S$450
Rent from the flat	S$400	S$350
Total	S$2,150	S$2,000

S$2,000 a month, or S$24,000 a year — the “pensions and income” column of Chapter 12's table. Every number from here on is the after-tax one.

Today's money and future money

S$2,000 a month sounds clear until you ask when. Prices rise. At 2% a year, what costs S$2,000 today costs about S$3,217 in 24 years. A pension statement may quote either figure, and mixing the two is the second most common way a plan lies.

Today's money

Every year shown in what money buys now. The best way to compare years and to ask “is this enough?”

Future money

The amounts you will actually see on a statement in that year. Useful for recognising a figure — not for judging it.

A good plan does its thinking in today's money and translates when you ask. The Retirement page has a switch for exactly that: Today's money or Future money, the same plan in two units.

Don't count the same money twice

Your ledger already knows your recurring income — a salary, rent, interest. The question for each is simply what it does when you retire:

A salary

Stops when that person retires. Not a retirement source.

Rent from a flat you own

Continues in retirement, every year.

A contract that ends on a date

Counts until its end date, then stops.

Interest and dividends from savings

Already in your savings' growth — counting the income as well would count it twice.

The last one surprises people. Your savings are assumed to grow; the interest is that growth. Add it again as income and your plan is quietly counting the same won, dollar or dirham twice.

🌅 The big idea

Every stream counts once, after tax, from the age it really starts — in money you can compare.

Sort what pays you into pensions, pots and income that carries on. Leave the salary out. Think in today's money.

Your journey so far

Why should I track my money?You cannot make a good decision about something you cannot see.The simplest financial modelMoney comes in, money moves, money goes out — and you know where you stand.What is a personal ledger?Your financial memory: transactions, accounts, receipts and categories in one record that answers questions later.Understanding your accountsThe containers your financial life lives in — what you hold, what you owe, and how a card really works.Income vs. expenseIn, out, or neither — and why your app should never paint your income red.Did that money leave, or did it just move?One line around your household: moves inside it change nothing, and not everything that crosses it is income or spending.A budget you will actually keepSave first, plan the rest — across the year, not just the month — and watch your pace.Build your first personal financial systemFive decisions, half an hour — a household, a ledger, three accounts, a dozen categories and a small plan.Living in multiple currenciesKeep the original, add the perspective — and never invent a single number that spans them all.Two records, one purchaseThe same purchase arrives twice through different doors. Recognising the pair is what keeps every other number honest.What was this purchase for?Ask whoever knows best, in order — and answer each question once, so the review pile shrinks every month.How much is enough?Start from what you really spend, change only what retirement changes, and count every bill once.

Who pays you when the paycheck stops?Pensions, pots and income that carries on — after tax, from the age each one starts, never counted twice.

🌅 Next up · Chapter 14

Will it last?

You know the need and what pays for it. The last unknown is the one nobody controls: how markets behave over thirty years — and why one average answer is the wrong one to trust.

Read chapter 14 →

Let your ledger list what pays you — then check each one once.

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