Frequently Asked Questions


To determine how much retirement income is needed, it is important to first identify your retirement goals. You should try to envision the type of lifestyle you aspire to have, at what age you expect to retire and most importantly, establish what retirement means to you. Being realistic and having specific and measurable retirement goals can also help provide a more accurate assessment of how much money is needed.

As a general rule of thumb, experience shows that the amount of funds you need for retirement ranges from 50 per cent to 70 per cent of your last drawn annual income. If you aspire to have a very active retirement, involving frequent travelling and hobbies, you will need to have more savings. As such, you should start saving for your retirement as early as possible so that you can enjoy a similar quality of life during your golden years. You should also note that for every 10 years you delay saving for retirement, the amount you will need to set aside monthly will double to accumulate a similar retirement nest egg.

One option you may also want to consider is a life insurance plan that offers a combination of savings and the much-needed insurance protection. With an endowment policy, for example, you can build your retirement fund by saving methodically on a monthly or yearly basis over a fixed term. In addition, it may also potentially offer higher returns than bank deposit interest rates and hence enable you to build a larger retirement fund in a shorter period.

An Investment-Linked Insurance Plan (ILP) is also another option to consider if you want to invest and protect you and your family against financial loss in the event of an unfortunate disability or injury. You can decide how your premiums are invested, in which funds, and also have the flexibility to switch between different funds during the life of the policy.

One should also bear in mind that even though you start to build a nest egg for the retirement years, a huge medical expense could wipe out a large portion of savings. Thus it is prudent to ensure that you have appropriate and adequate health insurance.

You can consider purchasing a life annuity. A life annuity offers a guaranteed steady income for life, without running the risk of outliving your savings. Usually you pay a lump sum which is invested by the insurance company in return for monthly payouts.

There are annuities designed specifically for members of the Central Provident Fund (CPF), under the CPF Minimum Sum Scheme or Minimum Sum Plus Scheme. Under this scheme, all Singaporeans are required to set aside a ‘minimum sum’ at age 55, with strict restrictions on how this sum can be used. Keeping your Minimum Sum in the CPF account, putting it in a fixed deposit or investing in an annuity are the only options for using your Minimum Sum.

You should consult a good FA representative.  He will be able to perform a comprehensive fact-find that will look at your income and expenses, assets and liabilities and then determine what needs to be done to meet your retirement lifestyle objectives.