Is $1 million enough for a retirement in Singapore in 2017?

24 Nov 2017 
SOURCE: My 15 Hour Work Week

One of the questions most people have about retirement is “How much is enough for retirement?”

For the average Singaporean, becoming a millionaire is like a dream come true. It helps to explain the snaking queues during those Hong Bao Draws at Singapore Pools. Most people can only hope.

The Mrs and I turned 30 not too long ago and we are constantly advised that it is never too early to start our retirement planning. But I am wondering if we turned 65 today, would $1 million be enough for our retirement?

$1,000,000 will last us 32 years…If we spend $42,000 a year or $3,500 a month

If we consider the following assumptions:

  • Amount is deposited in fixed deposits or short-term endowments

  • Annual returns of 2%

Yearly Expenses




How long $1 million can last

40 years

32 years

27 years

This $1 million will be able to last us till age 97 if we spend $42,000 every year which is also equivalent to spending about $3,500 a month. 

The $3,500 a month lifestyle

  • Food and Dining ($1,200) 
    $40 a day for the both of us to settle our 3 meals. We can probably look forward to a good mix of home-cooked meals with restaurant treats a few times a week. 

  • Utility Bills ($200)

​​Besides electricity and water bills, we would also have to consider conservancy fees, broadband charges and our monthly phone bills. 

  • Transport ($300)

We would utilise public transport most of the time but we can also indulge in a few taxi trips a week if we want to explore less accessible places in Singapore. 

  • Medical Insurance ($800)

With MediShield Life, a national healthcare insurance scheme, all Singaporeans are covered for subsidised treatment in public hospitals. While MediShield Life premiums may be fully payable from our Medisave, we would set aside $800 a month to pay for the private insurance component of our Integrated Shield Plans, which would make it more viable for us to pursue private medical care if the need arises.

  • Others ($1,000)

This will cover discretionary expenses like gifts, purchases at department stores and some basic maintenance expenses. We can also include two overseas trips a year. Probably a low-cost trip around Southeast Asia and another long-haul trip to East Asia/Europe/America to satisfy our wanderlust.

​While the above breakdown is comfortable for some, is it comfortable with you?

For us, we are hoping for a little more wiggle room during our retirement.  

Having more in our golden years with the Enhanced Retirement Sum and CPF LIFE 

The extra wiggle room can easily be achieved if we set aside the Enhanced Retirement Sum (ERS) in our CPF Retirement Accounts (RA) when we reach 55 years old. At age 55, our Special and/or Ordinary Account savings will be transferred to our Retirement Account up to the Full Retirement Sum, to form our retirement sum. This sum will be used to join CPF LIFE when we would like to start receiving payouts, from age 65 onwards. 

If we consider the following assumptions: 

The contributions to an individual’s SA would be about $149,000 from 25 to 55. However, due to the magic of compound interest, the person would have accumulated close to $243,000 in the SA at age 55. 

This means that we would have Ordinary and/or Special Account savings above the current Full Retirement Sum of $166,000 that we can apply to transfer to our RA at 55, and this amount can help us get close to meeting the current ERS of $249,000.  By setting aside the ERS, each of us can then look forward to a monthly CPF LIFE payout of about $1,860 - $2,000 from age 65.

Is 1 million enough for a retirement in Singapore in 2017.png

With our combined CPF LIFE monthly payouts, we  would have enough to pay for basic needs in retirement and our personal cash savings  could be used to provide extra income to supplement our other expenses.


More importantly, these monthly payouts are for life to mitigate longevity risks and we would not have to worry about outliving our savings.  


With our CPF contributions and CPF LIFE, saving for retirement is made much easier.


It does not matter if $1 million is too difficult a target for you and your partner to achieve. If $800,000 in cash and CPF is all you need for your desired lifestyle, you can use that as your planning parameter. 

Similarly, if $2 million is what you desire, simply set aside more retirement savings in cash and your CPF.

Remember, your CPF savings plays an important role in building up your retirement savings.​​

This article first appeared on My 15 Hour Work Week.​

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