How Much Savings Do You Need to Retire in Singapore?
I’ll start this article by saying there’s probably no correct answer as to the amount “the average person” needs to retire in Singapore
I’ll start this article by saying there’s probably no correct answer as to the amount “the average person” needs to retire in Singapore.
We are not robots living identical lives. Some people are happy with just hitting the CPF basic retirement sum, while others think you need a few million. There is no hard and fast answer.
The key, instead, is to figure out how much YOU need to retire. With this little guide you’ll hopefully be a little closer to your own answer.
We will never agree as to how much is really needed for retirement. A lot depends on when you retire, and the kind of lifestyle you wish to have when you finally have enough to break up with your boss for good.
What’s important is knowing how to work out your own needs.
This 2019 study suggests that a single person aged 55 to 74 living without chronic illness needs $1,721 a month to meet basic needs.
In compiling the survey, in addition to things necessary for survival like clothing, food, healthcare and transport, leisure and cultural activities were also included.
However, as these are still supposed to be “basic” costs, you’ll need more if you wish to live “comfortably”. And after experiencing cabin fever thanks to COVID-19, you’ll probably want to factor in some overseas travel.
There are other factors that can raise or lower your basic needs. For instance, if you have kids who are cool with living with and supporting you, you may not need as much. On the other hand, if you suffer from chronic health issues, want to travel the world or are a regular patron at certain KTV establishments, you’ll have to include additional costs.
Finally, note that these costs have not been adjusted for inflation. We can try to estimate, but nobody is able to predict with 100% accuracy what costs in Singapore will be like in 10, 20, 30 or 40 years.
Here are some price increases published by the CPF Board.
Your CPF accounts seem like a black hole your money disappears into, never to be seen again. But once you hit the age of 55, that changes. You’ll be able to withdraw some of your CPF savings once more.
You can, at minimum, withdraw $5,000 at age 55. If you own a property, you can withdraw any savings above the Basic Retirement Sum ($93,000 in 2021; rises every year).
Any money you don’t withdraw will sit there collecting interest until you are old enough to receive monthly CPF LIFE payouts — currently age 65 for those born in 1954 or later.
For someone who is using the CPF LIFE Standard Plan and starts receiving payouts at the age of 65 in 2021, here’s what the payouts look like.