Even if You Have CPF Life at 65, You May Need an Additional $215K to Retire.

How much you need at 65 to retire depends on many factors and is different for everyone. A good starting point in Singapore is to look at someone at 65 who will be receiving CPF Life Full Retirement Scheme payout of about $1350 per month. Working on the assumption that you have your HDB unit paid off and are not carrying any debt, do not own a car, in good health and does not have any significant balances in other CPF accounts – how much do you need to set aside to retire reasonable comfortably in Singapore? Let’s make the assumption that you will need enough money to take you to 90 years-old or 25-years past your retirement at 65. Statistically, you may live longer than that, and that is why we also factored in a contingency or emergency fund as well.


Let start by looking at expenses that someone retiring will likely need. Overall, we assume that a retirees may need to spend about $2100 per month to have a comfortable retirement. Here’s the breakdown.

  • When you retire, the biggest financial unknown and risk is healthcare costs. Even if you are healthy today, it is more than likely that your healthcare needs will increase with time. That’s why insurance in very important. Fortunately for Singaporeans, there is already Medishield Life which cover hospitalisation and acute care costs, should you need it. In 2021, the government will launch Careshield to provide a monthly payout should you become disabled and would need help with daily living. On average, you should plan to spend about $180 per month on premiums.
  • Food and transportation are important expenses for you to remain active – keeping in mind the mantra that Singaporeans “eat to live”. Good news for seniors is that after 65, Singaporeans are entitled to subsidised public transportation rates that are very affordable. An average $850 allowance for food and transportation is a good guess.
  • Unless you plan to not do anything after you retire, you will need to have some money to pursue your passions. For most retirees to “enjoy life”, travel is top of mind. Let’s set aside $200 per month for “fun money”.
  • Even with Medishield and Medisave, you will need more for other out-of-pocket health related expenses that are not covered such as vitamins, supplement and drugs – setting aside $150 each month.
  • You home will need care and maintenance – and it does not come cheap these days – whether it is replacing your washing machine or getting a new coat of paint, We set aside $200 per month for maintenance and repairs.
  • You cannot do without electricity, water, phone and internet – and some even consider subscription to cable programs a “must-have” utility! $150 should cover that.
  • You need to have some contingency or emergency money, should something unexpected comes up. Let’s set aside $100,000 – and over 25 years, that translates to $333 per month.

Now let’s take a look at how much savings you will need when you retire. If you begin to collect your CPF Life (FRS Scheme) at 65, you will roughly get about $1350 per month for the rest of your life. But that would leave you with a gap of $713 per month. Assuming 25-years at 0% interest returns, that works out to $213,900.

If you accept the above assumptions for what you would consider a “comfortable retirement” in Singapore, then you will need to roughly plan an additional $215,000 in savings when you reach 65!

Note: The model did not take into consideration inflation in Singapore – which is reasonably low if you have your housing paid for and do not own a car. We also did not factor in any subsidies or grants from the government or interest earned on savings – which we assume may cover future inflation.

Disclaimer: Retirement financing is a very personal thing. The financial model above is only intended as an illustration and not intended as advise for your retirement planning. You should always consult a professional financial adviser.

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