How much do we need to save?

We are often told that saving is important. However, have we ever considered how much do we actually need to save.

Assumptions:

Expenses:
Monthly required for basic needs of food, clothes, transportation, etc = $600 ($20 per day)
Basic need of shelter is an average 4 room HDB flat = $350,000 (split between 2 persons, 30 year HDB loan @ 2.6% interest), i.e. loan repayment of $500 per month per person.

Income:
An average worker who earns starting pay of $2,500 and has annual salary increment consistently of 2.5%.

Time frame:
Earns from Age 25 to 60 = 35 years
Spends from Age 25 to 85 = 60 years

Others:
Inflation per year = 3%
No investment growth of savings.

Calculation:

Future value of basic needs = FV(3% inflation, spends for 60 years, $(600*12) per year) = $1.2M
Future value of housing = FV(2.6% interest, 30 years loan, $(500*12) per year) = $0.3M

Future value of income = FV(2.5% increment, works for 35 years, $(2,500*12) annual income) = $1.6M

Therefore, Income = Expenses with a $0.1M safety margin.

Conclusion:

Based on the above assumptions, an average person, staying in a 4 room HDB flat can only spend $600 per month while saving the remainder every month!

What about medical care, dependents, car, holidays, restaurant dining and our unlimited wants?