Meet two people who both saved diligently throughout their working lives. Both retired at 62. Both had what felt like a healthy nest egg. One of them is now in their late 70s, living comfortably. The other ran out of savings at 74 and is now relying entirely on family support. The difference between them wasn’t how much they saved. It was whether they had a plan for how to use those savings and whether that plan was built to last 20, possibly 30 years or more.
Know your number: How much do you need?
Most people have a vague sense that they should save more for retirement. Far fewer have worked out what their monthly income in retirement actually needs to be. Start by estimating your monthly household expenditure in retirement. Think about:
- Housing costs: Maintenance, conservancy charges, potential rent if you downsize.
- Healthcare: This tends to rise significantly with age, so be honest about what you’re likely to need.
- Daily living: Food, transport, utilities.
- Travel and leisure: Retirement is, after all, supposed to be enjoyed.
- Supporting children or ageing parents, if relevant.
Here’s where inflation changes the picture entirely. MoneySense introduces the Rule of 72 as a useful way to understand inflation’s long-term impact: divide 72 by the inflation rate to find out roughly how many years it takes for the cost of living to double.
- At 3% inflation, your cost of living doubles every 24 years.
- At 4% inflation, it doubles every 18 years.
The accumulation phase: Growing your nest egg
Singapore gives you some strong foundations to build on. The key savings vehicles most people should be maximising are:
- CPF OA, SA, and RA top-ups – structured, government-backed, with compounding returns.
- Supplementary Retirement Scheme (SRS) contributions – tax relief now, investment flexibility later.
- Unit trusts and ETFs – for those comfortable with market-linked growth over the long term.
A practical starting point is to set aside at least 10% of your monthly income specifically for retirement. This acts as a floor and can be distributed across CPF top-ups, SRS contributions, and other long-term investment vehicles depending on your situation. The important thing is that it becomes a fixed habit before other spending decisions are made.
The compounding advantage is significant. Someone who starts saving $500 a month at 25 will build a meaningfully larger nest egg than someone who starts the same savings at 35, even if the later starter saves more each month to try to catch up. Alongside CPF and market-linked investments, structured insurance-based savings vehicles, including retirement insurance products, play an important role for those who want predictability. These convert accumulated savings into a guaranteed income stream, without the volatility of market exposure.
- i-Retire (II): A retirement plan with flexible premium terms of 5, 10, or 15 years. At your chosen retirement age, it begins paying guaranteed monthly income. It also includes a Loss of Independence benefit, providing 24 months of additional income if you are unable to perform two of six daily tasks.
- i-CashLife: A savings plan that pays yearly cashbacks of up to 3.95% p.a. of total yearly premiums, beginning right after the premium payment term (3, 5 or 10 years) and continuing up to age 120.
- Infinite Harvest (III): A whole life savings insurance plan designed to generate a lifetime of passive income, while also building a legacy for your heirs. Well-suited as the long-term component within a broader pre-retirement strategy.
The decumulation phase
Decumulation is the part of retirement planning most people don’t think about until they’re already in it. The question is simple: once you’ve stopped working, how do you draw down your savings in a way that’s structured and won’t leave you short-changed in your 80s?
- Retirement and savings plans that provide regular guaranteed income, such as i-Retire (II), i-CashLife, and Infinite Harvest (III), each of which delivers predictable monthly or yearly cashbacks that can be structured to kick in exactly when you need them
- Dividend-paying stocks or ETFs generating passive income
- Rental income from property
- Systematic drawdowns from investment portfolios
There’s also something called sequencing risk. If a significant market downturn happens in the first five years of retirement, and you’re drawing down from a portfolio at the same time, the combined effect can permanently reduce how long your money lasts, even if markets recover later. Having a portion of your retirement income in guaranteed, non-market-linked products reduces this exposure significantly.
Review and adjust regularly
Retirement planning is not a one-time calculation. Life shifts, and your plan needs to shift with it. A review every 3–5 years is sensible, and certain life events should trigger an immediate revisit: a significant job change, a serious health event, a major market downturn, the death of a spouse, or reaching key CPF milestone ages.
A good financial adviser will stress-test your plan against different scenarios, like retiring earlier than expected, living longer than planned, or a significant healthcare cost in your late 70s, and help you understand where your plan is robust and where it has gaps.
Conclusion
Most people start thinking seriously about retirement later than they’d like. The important thing is that the gap between where you are and where you need to be is almost always addressable, especially with the right plan in place. A good starting point is to work out what monthly income you’d genuinely need in retirement, then work backwards to figure out what you need to save and when. Even a rough number is more useful than no number at all.
To explore the retirement income solutions that are right for your situation, speak to your preferred financial adviser. The earlier you have that conversation, the more options you’ll have and the better the life you’ll be able to build on the other side of work.
