Why are the retirement sums increasing yearly?
The retirement sums are increasing yearly as future cohorts of Singaporeans will need to set aside more for retirement due to inflation, increasing standard of living and longer life expectancy.
If you have already turned 55, the yearly increase in retirement sums do not affect you. The retirement sum you need to set aside depends on when you turn 55 and is fixed for the rest of your life.
Did you know? If the Full Retirement Sum had remained unchanged from $30,000 when it was first introduced in 1987 (as the Minimum Sum), it would only provide a monthly payout of about $300 today. That would be insufficient to meet day-to-day living expenses and pay for rent.
In comparison, the Full Retirement Sum of $198,800 in 2023 will provide a monthly payout of $1,510-$1,620 for life.