Retirement Planning in Singapore (Millennials Edition: Age 20 to 35)

Retiring may not be as awesome as you think, if you have not made planning for it.

A retirement planning guide for those age between 20 to 35. This guide covers a wide range of statistics, facts and strategy towards your plans for retirement.

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Whenever you think about retirement, you may often imagine traveling all over the world while sailing on a yacht and being surrounded by toys and hot men/women. However, retirement in Singapore is not that great, unless you have won the money lottery. When you are being rich and not doing anything can be a really bad combination for a lot of people. It comes to a point where all you will do is visit the library and Polyclinic to know that there is no way that you want to spend your years just sitting there and looking into an empty room. How you plan your retirement and ensure a decent life for your future is important. Below are some options that are available to you.

Disclaimer: I am not a financial advisor. I am just learning about pensions and doing what I can in order to understand the complicated shortcuts of the government. If you find errors, or just have tips to add, just let me know.


What is the retirement age in Singapore?

What is the cost of living like in Singapore after retirement?

Can I not just withdraw my money from my CPF Retirement Account?

How does the CPF Life and CPF Retirement Scheme work?

Will I have enough money for my CPF Retirement Sum?

How can you plan for retirement?


What is the official age for retirement in Singapore?

That depends on if you are asking CPF or asking MOM.

Retirement Age Implications
55 Years You may begin to withdraw money from your CPF Retirement Account
62 Years Employers cannot ask you to retire before this age. This is the MOMs stipulated retirement age
65 Years You may begin getting monthly payments if the CPF Retirement Sum is met
67 Years If you work past this age, you may re-contract with your employer until this age.


Based on information from the Ministry of Human Resources, the official retirement age in Singapore is now 62 years (it will increase to 63 years by 2022 and to 65 years by 2030). This number is intended primarily to regulate employers and not employees. If your employer suggests that you “retire early to spend your time with your grandchildren” before the age of 62, you may have an unfair dismissal lawsuit and you may appeal to MOM. Of course, employers always try to get rid of older workers by using words like “restructuring”, “rationalization” or “focusing on basic skills”. Therefore, it is not easy to get support for your case.

If you happen to be with a good employer who is not worried about your age, then you may continue to work after your retirement age. The MOM sanctions state that the age is 67, but this is also called reintegration age and just like the retirement age it will be 68 in 2022. This will increase to 70 by 2030. However, if you are wanting to only deal with the CPF government, then the retirement savings will be available at 55. This is a different type of retirement age. If you had not liquidated all of your CPF funds and headed to Batam to retire, then you may need to wait another 10 years in order to get your first monthly CPF payment once you are over the age of 65.

Retirement in Singapore – what’s the cost of living like here?

As everyone knows, the cost of living in Singapore is quite high. The fact that you have retired does not mean that the cost is going to lower. In fact, your cost of living could even increase as (1) aging usually means more medical bills and (2) leisure costs mean money. So how do you calculate what your expenses will be when you retire? A formula that you may use is Retirement costs + Normal Living Costs + emergency costs. Here is a better explanation.

Your normal cost of living is going to be if you assumed that you have paid all of your outstanding loans on your retirement and that the cost of living that you have now should be used for this. This includes public services, transportations, food, etc. The emergency costs that come with old age can mean that you are going to need a health insurance plan, disability-related costs, and even eldercare costs. It is always best to cover these costs with health insurance and then a set amount is put back to care for the elderly. There are all types of emergencies that may happen. The house could flood, you could have a bad fall, or you may become depressed and want to get help. Since you are not able to ask CPF to have a prepayment check once you have retired, it is best to have a bit more money than average to make it a bit of a buffer.

What does this number look like? It is going to be much bigger than you thought. If you have been wondering what it is when compared to others in Singapore. A recent survey that has been commissioned by the NTUC, the income has set the average retirement income at $3,314/month. It needs to be remembered that this figure can be subjected to inflation. This is often 3% each year. Yet, if you have a good lifestyle, then you need a budget of 4% to 5% each year as luxury items are considered to be much higher.

Can I not just withdraw my money from my CPF Retirement Account?

Many people in Singapore feel that all of their CPF savings should be able to be withdrawn. It actually turns out that you are only able to use up your CPF savings if there is less than $5,000 on your Special and Combined Ordinary accounts and at the age of 55. In such a situation, CPF will not even bother to set up a retirement account for you. Your funds are all unlocked. However, if your balance is more than $ 5,000 at the age of 55, then CPF will merge the two to form your CPF retirement savings plan. You can withdraw the money, but there is a minimum balance that you cannot touch. This amount is tied to the annual basic pension amount or the total pension amount. We will use the latest figures, which will apply to those who turn 55 in 2019.

CPF Balance at age 55 Minimum Balance (non-Property Owners Minimum Balance (Property Owners)
Less than $5,000 No Limit No Limit
$5,000 – $176,000 Up to $5,000 $88,000
Over $176,000 $176,000 $88,000


As you can tell, the scenario may differ, based on if you own any property. However, there are certain conditions that come with the property. In order to qualify as an owner, you have to be able to charge the CPF to the total pension amount whenever you sell your property.

How does the CPF Life and CPF Retirement Scheme work?

It is safe to say that you cannot require the authorities to return your CPF in full once you have reached the age of 55. If your dream is to purchase a boat and then spend the rest of your life on the water, then an alternative is the Life Retirement Plan. This is similar to pension insurance, except that pension will come from your own money and not from the taxpayer money. If you were born during 1958 or later, then the newer version of CPF pension is called CPF Life is automatically registered. The difference is that the people who have a CPF plan will receive payments up until they are 95 years old, while the CPF Life will receive payments until you die.

CPF Life will have 3 different levels and when it is time for you to retire, then you are able to pick the level that you want based on the type of retirement income that you are wanting. These are the values for those who will be turning 55 in 2019:

CPF Life Level Amount Monthly Payout
Basic Retirement Level 3 $264,000 $1960 to $2110
Basic Retirement Level 2 $176, 000 $1350 to 1450
Basic Retirement Level 1 $88,000 $730 to $790


A lot of retirees from Singapore will have to leave their BRS inside of the CPF retirement account. If you do not, then you are not going to qualify for CPF Life or CPF retirement plants. However, if you look into the monthly payments, you will find that the BRS does not offer a lot each month. In order to be able to live more comfortably, you may choose to keep your total pension or you may extend the pension in order to ear a much higher income. Whatever CPF annuity that you decide to go with, that amount has to be in your account at least 6 months before your 65th birthday, however, you can change that amount if you want.

Will I have enough money for my CPF Retirement Sum?

Like the price of Amazon shares, the CPF basic pension is constantly increasing. In recent years, it has risen to about 3.15% per year. For those who turn 55 in 2019, the current BRS is $ 88,000, up approximately 3% from a year ago. First, this mobile benchmark is not a bad thing. Assuming that they match a similar increase in monthly payments, a growing BRS would prove that the CPF pension system is responding to inflation. However, it is important to understand that while the current CPF pension may appear to be an appropriate savings target, the number may vary greatly at the time of retirement. CPF only publishes pension amounts until 2020. Therefore, if you retire after 2020, you will need to screen for it.

Take for example. If you are turning 33 this year, it means that in 2041 you will be 55. Assuming that the CPF retirement pension is increasing by 3.15% every year, then you may see a jump of 70% in the current amount.

Retirement Sums 2019 Amount Projected 2041 Amount
Enhanced Retirement Sum $264,000 $448,800
Full Retirement Sum $176,000 $299,000
Basic Retirement Sum $88,000 $149,00


You may not be the only person who thinks that Enhanced retirement can be scary. One of the main problems is that a lot of people have a large portion of CPF funds in a private home. If you have a lot of money that is tied up in a home, there are some HDB programs that will allow you to liquidate your home while you have a place to live so that you do not have to worry about housing at a later date. However, this will not help most of the population which are day laborers, freelancers, housewives who do not have enough CPF savings to even enjoy CPF at all.

How can you plan for retirement?

A CPF Pension plan should not be the only plan that you have. You will need an additional pension plan if:

  • You want more control and information about your payments.
  • You want to diversify risks by placing your nest eggs in multiple baskets.
  • You want a larger retirement income than what CPF Life or CPF retirement plans offer.
  • You do not believe that the CPF Life or CPF retirement plan can beat inflation.
  • You do not trust the government when you retire.
  • You do not have enough CPF savings in order to get the desired pension amount.

There are a lot of people who supplement their CPF pension plans with a pension from an insurer or bank. You can find that most financial institutions are able to offer these in a prepackaged product like Manulife, NTUC Income and Aviva.

However, you must pay the premiums while you are working in order to get income during your retirement. The plan that you pick may not include integrated insurance. You need to take time to be able to understand what you will be getting yourself into. If you believe that CPF is confusing, then you will not want to go through the insurance documents. However, you may build your own passive income with familiar investments like:

  • Buy foundation plans if you are needing insurance coverage.
  • Rent-free rooms in your home
  • Invest in stocks that will generate REIT or dividends

This way that it will not matter what investment tool that you use. You are able to choose what you understand and what you are going to be comfortable with.

Just keep in mind that your pension investment plan is something that is long-term. Do not rely on anything like cryptocurrency or currency trading. You may even think about adding an additional retirement account and then using it for investments. You can deposit around $15,000 each year into your account and the funds that are earned from that will be tax-deductible. However, if you withdraw this money before your retirement age, then you will have a fine.

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