Calculate your retirement needs

If you’ve got your dream retirement lifestyle in mind, it’s time to put a price tag on it. Figuring out how much you’ll need isn’t about guessing — it’s about calculating based on real goals, time, and inflation. Don’t worry, we’ll walk you through it step by step.

Step 1: Set your monthly retirement budget

Start with your ideal lifestyle. Then break it down:

• Housing (e.g., HDB conservancy, utilities)
• Food (hawker centre meals, groceries, treats)
• Transport (MRT fares, Grab rides)
• Healthcare (insurance, check-ups)
• Fun (Netflix, short trips, shopping)

Example: You decide $2,000/month covers your needs. That’s $24,000 a year.

Step 2: Estimate how long you'll need it

Today, 1 in 2 Singaporeans aged 65 are expected to live beyond age 86. That means planning for around 20 to 25 years of expenses in retirement is a practical guide.

• If you plan to retire at 65 and assuming you’ll live till 86, that’s 21 years of expenses
• $24,000/year × 21 years = $504,000 needed in total

That might look like a huge number, but don’t stress. CPF LIFE helps cover a portion of this by giving you monthly payouts for life, so you won’t be starting from zero. You’ll see this in Step 4.

Step 3: Account for inflation

Prices go up over time. That $2.50 nasi lemak might cost $4.00 in 20 years (assuming an inflation rate of 2% per year).

Assuming 2% inflation, your $2,000/month today will need to be about $3,000/month in the future. That’s why planning early matters; your money needs time to grow with inflation in mind.

Let’s adjust our previous calculation.

Step 4: Calculate your gap

• Estimate how much CPF LIFE will pay you monthly (we’ll cover that soon)
• Subtract that from your future retirement budget
• The difference is the amount you need to cover through personal savings or investments

This gives you a realistic goal to work toward.

Example: Budget gap planning

You’ll need $396,144 from your own savings or income streams to retire at 65.

Sound too tedious or complex? Fret not. You can make use of CPF Retirement Payout Planner to set a retirement payout goal, identify your budget gap and test out different moves (like topping up your CPF) to see how they boost your retirement payouts. Plus, you can track your progress as you go.

There’s also PLAN with CPF, a one-stop financial guidance platform, that helps you make informed financial decisions as you navigate through life. Think of planners and curated resources in a personalised dashboard to support your planning journey. You can also discover tips to strengthen your financial fitness beyond CPF with a short questionnaire.

*This is just a ballpark figure. The actual amount depends on how much you set aside in your Retirement Account, when you did it, and which CPF LIFE plan you choose. We’ll break that down in the next article.