Retiring in Singapore: How Much You Need & How You Can Get It

How Much You Need To Retire in Singapore & How You Can Get There

Irving Soh
Irving Soh

It’s the tinge of unease when you look at your bank account.

That trickle of sweat going down your spine when you think about the future.

That sigh when you think about how you’re going to try and pay for everything.

The constant worry.

The fear.

You spend most of your time working, taking care of your family, your loved ones.

Money keeps going out – and it seems like it’ll never stop going out.

Can you afford to stop working?

Can you afford to stop making money?

Can you afford to retire?

If you’ve wondered:

  • Can I ever retire earning what I’m earning?
  • Can I afford to retire while caring for my parents?
  • Can I afford to retire even after funding my child’s education?

This article is for you. We’re going to delete all the doubt and fear surrounding your retirement planning and show you how to have your CPF pay you $3,000 a month once you’ve retired.

For those of you who don’t have the time, I’ve summarised the article into some key points here so you can look through it here and come back to the rest later.

For those who have more time to read about how you can retire on your own terms – read on.


  • Calculating How Much to Retire Correctly and Safely: Take the desired expense you have and multiply that by 1.04 (the .04 refers to a 4% inflation rate) to the power of the number of years of retirement. If you want to retire for 25 years with $2500 a month, that will mean:
    • $2500 x 1.0425(years of retirement)= $13,501.
    • Note that this method takes the maximum inflation applicable. However, by doing this, you can at least gauge the minimum required sum towards the maximum end of your years and you will be unlikely to outlive your savings/nest egg.
  • Retiring with Peace of Mind:
    • Using Your CPF to Retire: If you contribute about $500 to your CPF Special Account every month for 30 years, you can look forward to about $2000+ a month (at 65). This method will also ensure you keep pace with inflation since 4% a year will probably outstrip average inflation rates. It’s important for you to note the risks associated with it. So scroll down and read the CPF Special Account Drawbacks section.
    • Dividend Investing remains the best course of action for those who want to retire earlier, faster, and with more money. Here are some local bloggers you can follow. Our very own trainer, Chris Ng quit his job at the age of 39 off the back of Dividend Investing. Check him out here.
  • Guides should provide knowledge quickly and accurately without words that you don’t even know how to pronounce. Our guide does just that. We compiled ALL of the relevant things you need to know about Value Investing in one complete guide. We’ve included case studies, examples, and reports on how some of our own purchases did so you can learn to avoid the mistakes can learn from our lessons. Check it out here.
  • Compounding rates of growth allow you to take a small sum and scale it up extremely quickly (aka compounding interest) – even if you start with a small sum. That’s what dividend investing is so all about. Think of it like pitching a snowball down the side of Everest. What arrives at the bottom is an avalanche of snow. When you’re doing dividend investing, reinvesting the dividends received means growing that avalanche. Except, in this case, it’s an avalanche of cash.
  • Figure to keep in your head: With a $10,000 capital sum, $500 contribution every month, and a 10% return every year, with dividends reinvested, you can achieve retirement in 20 years with $3577 per month in dividends. If you choose to retire 40 years later, you will have accumulated approximately $5 million dollars and can look forward to an even more luxurious sum. The key is to figure out how to get 10% returns a year.

How Much Is Enough to Retire In Singapore?

How much you need to retire is really simple to figure out. Pretend you’re retired – right now.

Right here.

At this time.  

Now imagine that you’re retired and think about the expenses you might have or want to have.

Be generous in your estimates.

I personally apply a 1.5x multiplier to any amount I might want to have in order to be safe.

Here’s a sample of what it can look like.

Sample of monthly expenses

Once you’ve done this, you’ll have a rough gauge of how much you need today to retire peacefully years from now.

For my example exercise: that’s an average of $4700 a month for “retirement today”.

Why did I focus on the amount “retirement today” term?

Because retirement can be far off for some of you and can reasonably be expected to last about 20 years. Some even longer.

Accounting for the figure of “retirement today” allows us to be more precise about how much we need years from now thanks to inflation.

Basically, we want to answer the question of: “Now that we know we need $4700 a month to retire today, how much is $4700 a month when you’re 80?

To do that, we must account for inflation.

Why Does Inflation Matter?

Inflation is how much buying power you’re losing every year.

Do you see that complete insanity?

You’ll need $4 today to buy $1 worth of items back in 1961.

In other words, with $1 today, you can only buy $0.25 of items back in 1961.

That is why we must account for inflation. Moreover, the average inflation rate from 1962 to 2018 has been 2.59%.

If we assume it stays constant for another 30 years, that will be a 77.7% loss in purchasing power.

In other words, your $1 now will be worth only $0.33 in thirty years when you want to retire.

Clearly, failure to account for inflation will see us suffer in the long term immeasurably.

How much to retire at 50, 55, or 60? 

Take the monthly amount you need and multiply it by 1 to the power of number of years you want to be retired for.

I want to retire on $4,700 a month. I want to be retired for 43 years.

Assuming we estimate a more aggressive inflation rate of 4% (to be safe!), we can then take:

$4700 x 1.04 to the power of 43 to get the amount we want.

In short, the formula is: Money/Month X 1(to the power of number of years of retirement)

.04 = 4 percent inflation.
power of 43 = number of years of retirement.

Assuming we still want access to $4700 worth of purchasing power in the future, we will require $25,382.32 a month in 43 years time every month. This is assuming a steady inflation rate of 4% a year.

Even a modest target $2500 monthly income will mean a sum of $13,501 a month!

Now how do we get that kind of money?

$2,500 per month in 43 years = $13,501
Assuming 4% inflation rate per year.

How You Can Retire Comfortably

I mentioned earlier the worries of retirement while caring for your parents, your children’s educational needs and even just based on earnings alone.

Given that, the amount above must have shocked you.

You’re probably thinking it’s probably impossible to save that amount of money right now.

And you’re right.

It is impossible to save that amount of money.

But it is not impossible to grow that amount of money.

As I covered previously, we should estimate inflation to be at about 4% in order to be safe.

The easiest and most direct method to beat inflation, is to grow our own money at 4% a year OR more.

That way, no matter what it is, whether it’s

  • providing for your children and their education
  • caring for your parents
  • or making sure you can retire peacefully,

your money can continuously work for you and grow for you in a meaningful way WHILE beating inflation!

That way, we can beat inflation hands down. Here’s how you can do it. Even with ageing parents, growing children with looming educational needs, and not quite sufficient funds.

#1 – CPF Special Account (CPFSA): Between 4% to 5% returns per year.

This is the first and perhaps most stable method of growing your money.
Your very own, government guaranteed, CPF Special Account (CPFSA).

Monies in your CPFSA earn 4% interest year on year. An extra 1% interest every year is currently paid on the first $60,000 of a member’s combined balances (with up to $20,000 from Ordinary Account). That means if you have $60,000 or more between your CPF OA and SA, your yearly returns jump on your monies in your CPF account earn an additional 1%!

That’s an additional 30% over 30 years without even accounting for compound interest!

At 4% interest: A sum of $500 deposited in your CPF Special Account every month will accumulate $343,756.98 in 30 years.

Assuming your ordinary account has zero dollars, and with $343,756.98 forming the whole of your Retirement Account, you will receive about $2,500 a month upon reaching age 65.

For most people, this should prove to be sufficient to cover basic needs such as food, travel and day to day luxuries such as movies or a trip every week to Malaysia even.

Edit: Originally, this post included information on the extra 1%. On further confirmation, the 1% is only paid out to the first $60,000. Further, it includes restrictions on which account gets paid the extra 1% to begin with so the amount won’t be steady nor will it be widely applicable.

It is far better to assume the floor rate of 4% moving forward for your CPF Special Account then to assume the bonus. The above calculations for the standard plan @ $2,511 still holds fine. 

CPF Account Allocations

Something important to note: most people will not naturally have $500 deposited into their CPF account every month.

This is due to how the government allocates the money in your CPF account.

For a rule of thumb, your salary needs to be approximately $8,333 a month in order to have $500 a month deposited into your CPF Special account naturally.

If your current salary does not match this. It’s fine. You can just perform a manual top up to make up the difference.

For example, if your salary is $3,000, and you’re below 35, 6% of your salary will go into your CPF Special Account. 6% of $3,000 is $180. You will have to top-up $320 every month to make up the shortfall manually.

You can make the manual transfer here.

You can find out more about your CPF allocations here.

CPF Special Account Drawbacks

I would be failing you if I did not warn you of the potential danger to you if you chose to rely entirely on your CPF Special Account in order to retire.

Here are some of the issues you will face with the CPF Special Account as your only means of growing your money:

  • Inflexibility: You have no control over your money. It is not accessible in the case of emergencies such as an operation or going for a Masters in the field of your choice.
  • Long wait time: You need to wait till you’re 65 before you can see that money come to you bit by bit, a month at a time.
  • Returns are Capped: Your returns are a maximum of 5%  a year. It doesn’t go up unless the government says so. And if the government says so, it might go down as well. If inflation rises above 4%, your CPF Special Account won’t be able to account for that.
  • Currency Risk: The Malaysian Ringgit was once worth $0.50 Singapore dollar. Today, it’s 1 Malaysian Ringgit to $0.33 Singapore dollar. If the same happens to Singapore’s currency, your money locked away in the CPF Special Account prevents you from shifting your cash into an asset that can retain its value far better. Something like gold, or even another currency.
    • I recently took a trip to Malaysia hoping to capitalise on the fact that our money was now worth more. While prices in general have gone up slightly across the board, their imported products like graphics cards or laptops just jumped in price to reflect the degraded value of the ringgit. Can you imagine the vegetable uncle charging you $7 instead of $3 because the Singapore dollar lost value? That could destroy your retirement. 

If you’re fine with all of the above, go for it! After all, in return for having to put up with those risks, you get a guaranteed 4% a year.

It’s fuss free. Not very complicated and reasonably safe.

For those who are unwilling to jeopardise retirement for anything, you’re going to have to grow your money yourself.

Here’s how.

#2 – Dividend Investing

Dividends investing sounds complicated as hell but it’s actually really straightforward.

Dividends Investing Concept:  

  1. You buy stocks of good companies (value buys!).  
  2. Stocks pay dividends (cash every year for being owners of their stock).
  3. As you own more and more stocks. Your dividends grow and grow. Especially when reinvested and allowed to compound over time.  
  4. Soon enough, your dividends will actually exceed your take-home pay, at which point you can retire peacefully.

The question then becomes: which stocks do you buy?

Trying to address that question within this post will be rather impossible. But I won’t leave you hanging. First, follow the blogs.

Then read the free guide.

The blogs will develop your understanding and your world view.

It also serves to update you from time to time while giving you different perspectives so you have a balanced and not biased point of view.

Doing this, you should reasonably be able to increase your awareness and improve your analytical skills.

Next read the guide we have compiled.

It’s a comprehensive guide including but not limited to:

  • Definition of Value Investing
  • Approaches to Value Investing
  • 5 Value Investing strategies

Doing both (following blogs, reading guides) should at least increase your ability to pick stocks easily and with good sound logic behind it.

Blog first.

Blogs You Should Follow 

I compiled a list of bloggers here with portfolios above $400,000 who displayed their:

  • Portfolio size
  • Portfolio growth
  • Methodology

That way, you know:

  • They’re not an armchair theorist
  • They did rather well (portfolio size & growth)
  • And they put their money where their mouth is

Which means they’re excellent to follow in terms of reading materials.

So you can feel safer following their ideas, routines, and methods to replicate their results or at least achieve better returns on your money. Chris Ng in particular had his passive income exceed his expenses by the time he was 33.

By the time he was 39, Chris could afford to retire, go to law school, and still pay for the expenses for a family of 4.

If that’s not a test of the power of his investing strategies, I don’t know what is.

Guide: The Complete Value Investing Guide

Trawling through the web for information can be painful and difficult.

Information overload can paralyse us.

Worse, different strategies evaluate stocks on different criteria.

Blending them could result in disaster if you don’t know what you’re doing.

That’s why we made this all-in-one guide. It covers value investing strategies typically used by dividend investors hoping to profit from a company’s growth (and hence its ability to pay dividends).

It covers:

So that everything’s here in one easy to access place with only the necessary information available and without any biases.

We’ve included case studies, stock examples and in-depth write-ups on our own strategies as well so you can be sure to get maximum value.

What’s Next?

You plan.

You do the exercise above and account for the inflation rates.

You figure out a way to grow your money with the Complete Value Investing Guide we’ve provided free of charge.  

Or you can use your CPF Special Account if you feel investing is not for you.

But, please.

Don’t do nothing. Doing nothing means you don’t get to reap the rewards of retirement in your later years.

Be hardworking.

Be pragmatic.

And be smart about where and what your hard work goes towards.

If you have any thoughts or comments, simply comment below and I’ll do my best to answer them in as thorough a way as possible.

Irving Soh
Irving Soh
Behavioural Psychology fanatic. I like good food, movies, intelligent conversations and logical reasoning. I also dabble with options, factor-based investing, and data analytics.
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10 thoughts on “How Much You Need To Retire in Singapore & How You Can Get There”

    • Hi Cyrus, you can transfer a portion or even the entirety of your CPF-OA to your CPF-SA to make up for the shortfall.

  1. Hi, thanks for the great article. I would like to clarify for the illustration of the retirement account of $343,756.98 at age 55 to receive about $2,500 per month, is this practical? I thought there is a cap to the enhanced retirement sum in the retirement account, e.g. current cap is at $264,000 and even if we have more funds in the CPFSA, we are not allowed to transfer them over to the retirement account to get higher monthly CPF Life payout?

    • hi! You’re right! Even with $264,000, you would be paid approx. $1960 to $2110. I think you’re able to draw out the remainder of the sum saved as well, so that extra cash can be safely invested in a dividend passive income portfolio to supplement your cpf monthly pay out.

        • Hi Abby,

          Yes. this is possible. Remaining balance in SA after set aside minimum sum to RA will get 4% interest

          Louis Koay

  2. Very generic article with some good ideas but without much consideration for the specifics of our CPF system.

    Contribution cap is 6k, there is also a limit on how much you can transfer from ordinary to special account.

  3. Assuming we still want access to $4700 worth of purchasing power in the future, we will require $25,382.32 a month in 43 years time every month. This is assuming a steady inflation rate of 4% a year.

    That means $25,382.32*43=$1,091,439.76 sum of money when you stop work at 55? to live to 98?


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