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Are you retirement ready?

Published in November 2020

Article Summary

Retirement could be closer than you think. With the rising cost of living, it is never too early to start planning for your retirement. Whatever lifestyle you aspire to lead in your golden years, there are simple steps you can take today to work towards your goal.

Evaluation of CPF investment returns & benefits

Many of us dream of living a comfortable life in retirement. Some may have plans to retire by the beach in another country, while others could be happy simply being debt-free after years of hard work. However you would like to spend your golden years, retirement could be a lot closer than you think, and you would need some careful planning to achieve your financial goals so you can enjoy your desired lifestyle in those years.

Retirement planning: It is never too early to start

Some people think retirement simply means you stop working and live off your CPF money. Firstly, you need to be aware that you can only start to receive your CPF LIFE monthly payouts from the age of 65.

Furthermore, the monthly payouts for those with the Full Retirement Sum of S$176,000 at age 55 currently ranges from S$1,350 to S$1,450. To support the lifestyle you have been dreaming about, you may need additional funds to supplement your CPF LIFE payouts.

If you are no longer working, you will not have a monthly salary to draw on but will still have all your daily expenses to pay for.

As you can see, it requires a certain level of planning and action to ensure you are well prepared for your retirement years.

The longer you wait to plan for retirement, the less time you have for your money to grow and the harder it will be for you to reach your retirement goals.

Understanding what you need and what you want

A good starting point for planning for your retirement is determining how much retirement funds you should accumulate. The ideal retirement allows you to satisfy your wants while ensuring your basic needs are met. How do you know how much you need, and how can you be financially prepared for your wants?

What you need

One way to calculate how much you need is to look at 70% to 90% of your annual pre-retirement income. For example, if you are earning S$63,000 per year before retirement, you would probably need S$44,000 to S$57,000 per year in retirement. Additionally, other factors you would need to consider while calculating your basic needs include:

  • Any mortgage or debt left unpaid
  • Monthly groceries
  • Monthly bills and premiums (if any)
  • Monthly transport fees
  • Medical expenses

What you want

To help you understand your wants during retirement, here are a few questions you can ask yourself:

  • What activities would you like to participate in daily?
  • Are there any big-ticket purchases or experiences you are planning on, such as a long holiday or remodelling your house?
  • Do you plan to contribute to charity? If so, how much and for how long?
  • How much do you plan to support your children’s needs and goals?

As you answer each question, note down an amount that you think you may need to achieve all these items.

Alternatively, check out the UOB Retirement Calculator to discover how much you may need for retirement.

Growing your retirement funds

Living the retirement you have dreamed of might cost more than your savings. As you work hard to put aside some cash for your later years, let your money work harder for you too and optimise your retirement funds with these ideas.

Boost your CPF savings

For Singaporeans, having more in your CPF account means having more income when you retire. Build up these savings by topping up your Special Account (SA) or Retirement Account (RA) under the Retirement Sum Topping-Up Scheme (RSTS). Whether it is via a CPF transfer or a cash top-up, the RSTS helps you build up your retirement savings to receive higher monthly payouts. Additional benefits include tax savings and earning higher interest when you transfer funds from your Ordinary Account (OA) to your SA.

Opening an SRS account and making regular top-ups

Beyond your cash savings or the CPF LIFE scheme, the Supplementary Retirement Scheme (SRS) is another option that can help you save for your retirement. Unlike the CPF scheme which is mandatory and only applicable to Singaporeans and Permanent Residents, SRS is also available to all foreigners who are working in Singapore. SRS account holders enjoy benefits such as:

  • Tax savings: Every dollar contributed to your SRS account reduces your taxable income by a dollar, up to S$15,300 a year for Singapore citizens and PRs, and up to S$35,700 a year for foreigners
  • Tax-free investment gains: Investment gains can accumulate tax-free
  • Withdrawal flexibility: You have a 10-year window, starting from the statutory retirement age at the time of you opening your SRS account, where only 50% of the amount you withdraw is taxable.

To enjoy these benefits, apply for an SRS account with UOB in 3 easy steps via MyInfo.


On the other hand, you would want to protect your savings as you move closer to retirement by rebalancing your portfolio to more conservative investments. For instance, a shorter time horizon to your retirement means you should:

  • Reduce the risk in your portfolio
  • Avoid investments which might cause you to lose your capital
  • Invest in solutions with higher liquidity
  • Consider Investments that generate a regular income at regular intervals

If you already have an SRS account, you can make your SRS savings work harder for you. When left uninvested, your SRS savings will earn you an interest of only 0.05% per annum. To beat inflation, you can consider putting your SRS funds to work in a range of investments, such as unit trusts or insurance savings plans.

Speak to a UOB banker to learn more about your investment options.

Are you set to reach your financial goals?

Whether you seek a lavish lifestyle or a simpler one in retirement, it will take disciplined planning, saving and even investing for you to get there. So do not procrastinate – start taking simple steps today to work towards your goal.

“The question isn't at what age I want to retire, but at what income.“

Reaching your S$1 million dream

Whether you are in your 20s, 30s or beyond, use this simple chart to see how much you need to save each year to have S$1 million at your desired age.

Assuming you are starting with zero savings at your current age and earning a 5% annual savings rate of return, here is a chart on what you need to save each year to reach S$1 million.

  • A) If You're Currently:
  • B) You Need To Save This Much Each Year:
  • S$20,000
  • S$15,000
  • S$10,000
  • S$5,000
20 years old 30 years old 40 years old 50 years old 60 years old
C) To Be A Millionaire At This Age:
Age 42 Age 52 Age 62 Age 72 Age 82
Age 45 Age 55 Age 65 Age 75 Age 85
Age 50 Age 60 Age 70 Age 80 Age 90
Age 56 Age 66 Age 76 Age 86 Age 96
Age 69 Age 79 Age 89 Age 99 Age 109
  • Within Singapore’s Retirement Age

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