Retirement planning: What happens when we live to 100?

PHOTO: The Straits Times file

According to a survey , more than 85 per cent of the 800 respondents have severely underestimated their retirement needs – with funds that would at most only last them till they’re 78 years old.

For reference, the average life expectancy of Singaporeans stands at 83.6 years, meaning that residents would have been unable to sustain themselves financially for 4.6 years.

And in light of the global trend of increasing longevity, this issue appears set for exacerbation.

What would happen if we all lived to 100? What adjustments will you need to make to fund your future?

Estimate how much you need to save for retirement

A longer life expectancy means you're going to have to re-calculate your retirement funds while making sure not to commit the common planning errors (e.g. underestimating and letting personal debt spiral).

This is also an excellent opportunity to re-evaluate your current retirement plan. Do you still have the same retirement goals as before?


When re-calculating your retirement funds, be honest with yourself: when would you like to retire? Assess your monthly cost of living during retirement.

Be sure to account for everyday living expenses such as groceries, transportation, utilities, and recreation. Factor in old-age contingency costs like healthcare expenses .

Additionally, remember to include an emergency buffer of at least 6 months. Then, multiply that sum by the number of months you’d spend retired.

It’s worth remembering that this number is subject to inflation as well. This means you’re going to have to save more than the calculated amount. To get an estimate for the number of years it takes for the cost of living to double, use the rule of 72.

How to estimate how much you need to save for retirement

Current Annual Cost Of Living ($) Annual Cost Of Living 24 Years Later (With Inflation) ($) Number Of Years Of Retirement Amount Needed To Retire ($)
12,000 24,000 20 480,000
18,000 36,000 20 720,000
25,000 50,000 20 1,000,000
36,000 72,000 20 1,440,000

Assess your current financial situation

Now, assess your current financial situation – if you continue saving/investing at the current rate, would you be able to hit your desired retirement sum?

Don’t forget to take into account your various assets. This includes high-yield savings accounts, long-term bonds and stocks, and current funds in CPF accounts.

To ease the calculation burden, CPF has rolled out an interactive tool (known as the CPF Retirement Calculator) that helps you determine if your retirement goal is achievable based on the present sums available in your CPF.

Planning ahead: Strategies how to close your savings gap

Chances are, because of longer life expectancy, you’re unable to meet your desired retirement funds with your current savings and investments. This is where you need to strategise on making more money or growing your savings at an accelerated rate.

Look into building other income streams; it’s easier to save more when you earn more (provided you keep your spending constant, of course). Have you considered investing in gold? Or, perhaps, rental income?

Also, there are several ways you could grow your money at a quicker rate. Here’s a list of them, ranked from least risky to most risky:

  • Build up savings with an SRS account
  • Transfer your CPF OA funds into SA funds (higher interest rates)
  • Look into purchasing Singapore bonds
  • Seek better returns from your CPF by investing
  • Investing in dividend-yielding stocks or REITs

Note that you should account for your time horizon. The closer you are to retirement age, the more risk-averse you need to be. If you’re unsure of where to invest your money, consider trying a robo advisor , which is an attractive, low-cost alternative to traditional wealth management advisors.

Difference in savings: CPF OA account versus CPF SA account

Current Savings, With $1,000 Monthly Contribution ($) CPF OA Account at 2.5 per cent ($) CPF SA Account at four per cent ($) Difference ($)
30,000 355,694.38 423,070.64 67,376.26
50,000 388,466.71 466,893.10 78,426.39
100,000 470,397.54 576,449.26 106,051.72

The importance of better budgeting and smarter spending

When it comes to your financial wellbeing, it's not about going on a financial diet. It's about maintaining healthy spending habits through smart budgeting, growing your money through investments , and saving for the years ahead.

While all this is easier said than done, consider creating a budget to start tracking your expenses in one place.

From there, set financial goals and grow your wealth through online trading platforms or with a wealth management advisor.

Above all else, make sure to practice smart budgeting and sustainable saving as part of your lifestyle, so you will be financially secure in your golden years (since you’re going to be living to 100)!

This article was first published in ValueChampion.

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