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29 Sep 2021 

SOURCE: DollarsAndSense

How do you feel about having $2,000 a month as your retirement income?


The answer to that question very much depends on your intended purpose during retirement. For some of us, $2,000 a month is more than enough for retirement. For others, this amount may be hard to get by. It all depends on what we want to pursue during our retirement.


If, like me, you are a working parent today - with young children to care for - you may balk at the thought of having to survive on just $2,000 a month, considering your potential financial commitments, including providing for their education, paying home mortgage and other necessary expenses such as insurance and investment needs. 

So How Much Do You Need To Retire In Singapore?

Here is a piece of good news. When we retire, there is a good chance that many of the expenses that we currently incur during our working years will no longer need to be paid. For example, by the time we retire, our home mortgage should already be cleared off. If we have children, we could safely expect them to have completed their education and started working instead of being reliant on our income. Our insurance and investment needs will also be largely reduced by then.


In fact, according to the latest report on the Household Expenditure Survey 2017/2018, the average monthly household expenditure per member among households comprising solely of non-working persons aged 65 years and over is $1,154 per month, with the average household expenditure among retiree households at $1,967.

Two increasing linear graphs depicting the increase in average monthly household expenditure from 2007/08 to 2017/18 for non-working persons aged 65 and above.

Source: SingStat

As someone with two retiree parents, I can relate to how our retirement expenditure can vary according to the intended purposes we have during retirement.


Both my parents have always been frugal, and this eventually became a good habit they brought to their retirement. Whenever they are not preparing meals at home, they will buy food from coffee shops or hawker centres. Drinks hardly cost more than $2 and individual meals usually do not exceed $10 except when they are eating out with friends at nicer places, or if their grandchildren (my kids) tricked them into going to Swensen’s for ice-cream.


For my parents, one of their main purposes during retirement is striving to keep themselves physically and socially active. They spend a good part of their day exercising at the park, catching up with their retiree friends through leisure activities, and helping to look after their six grandchildren. These are activities that they enjoy doing which don’t cost much, if any at all. Perhaps, the only exception is when they pamper their grandchildren with little treats.


However, they do have a unique consideration to factor into their retirement expenses because my family has a member with special needs - my sister – and another important purpose during their retirement is to continue caring for her. While my parents don’t require a domestic helper at the moment, it’s an expense that they will eventually need to spend on when they are older and no longer able to care for my sister on their own. Hence, even in their golden years, they still make it a point to continue living below their means so that they can set aside enough money to care for my sister, especially when they are no longer around.


Knowing my frugal parents, I estimate that they currently spend about $3,000 a month and this includes the expenses for my special-needs sister who lives with them. Based on a per household member basis, this works out to be about $1,000 a month, slightly below the amount that the average retiree in Singapore spends each month. However, if they engage a domestic helper in the future, average expenses will increase to about $4,000 a month.

Read Also: How Much Does It Cost To Hire A Maid In Singapore?


If you were to ask me to retire today, my wife and I would struggle to get by with what my parents are spending for their retirement, even if we do not have to worry about the living expenses of my special-needs sister and our grown-up children. 


Unlike my parents who can live rather frugally, my wife and I desire a retirement with other purposes that will likely cost more. For example, we tend to spend more on food and drinks as we dine out at restaurants. Like my parents, we strive to keep fit but we do it at a private gym (about $100 per person), as opposed to the park which is free. We enjoy watching the latest shows but that requires subscription to video streaming services like Netflix and Disney+. Travelling is also on our to-do list and places like New Zealand and Japan is surely going to cost more than an island-hopping tour in Singapore that my parents will sometimes go for.


During our retirement, my wife and I would also want to stay involved in the entrepreneurship and financial literacy scene. And if I were to decide to invest in private businesses, a higher level of savings will be required.


Hypothetically, if my wife and I were to retire today with no home mortgage or young children to care for, a conservative estimate of what we need would be about $4,500 ($2,250 per person). Even then, this wouldn’t be sufficient if we want to travel regularly to further places. It certainly wouldn’t be enough if I want to invest in private businesses.

How CPF LIFE Can Support Our Retirement

In Singapore, CPF LIFE is a national longevity insurance annuity scheme that provides Singapore citizens and PRs with monthly, lifelong payouts from age 65. We have the flexibility to choose among three CPF LIFE plans (Escalating Plan, Standard Plan and Basic Plan), and to make that decision, we should consider the retirement lifestyle and amount of monthly payouts we wish to have during retirement. 


Savings In Retirement Account At 55


Monthly lifelong payout from CPF LIFE from age 65 based on the Standard Plan

Basic Retirement Sum (BRS)


$770 - $830

Full Retirement Sum (FRS)


$1,430 - $1,530

Enhanced Retirement Sum (ERS)


$2,080 - $2,230

*These monthly payouts are estimates based on the CPF LIFE Standard Plan, for those who are age 55 as of 2021. Payouts may be adjusted to account for long-term changes in interest rates or life expectancy.

For retirees such as my parents, the CPF Full Retirement Sum (FRS), which gives them about $1,430 to $1,530 each month*, will be sufficient to achieve their retirement purposes of keeping physically and socially active and continuing to care for my special-needs sister. 


However, for me and my wife, I doubt the amount would be sufficient. While it’s may be enough to cover basic provisions that we will need during our retirement, we will surely need more if we want to pursue our retirement purposes as mentioned earlier.


Under the CPF Enhanced Retirement Sum, if we can set aside the $279,000 (as of 2021) at age 55 in our CPF Retirement Account, we will be able to receive about $2,080 - $2,230 each month* from age 65 onwards. This would be close to what someone like me would need for my retirement – though I would probably still want to supplement it with additional income from my stocks, REITs and bonds portfolio.


To be clear, this is based on the hypothetical situation of my wife and I retiring today (assuming we are 65, which we are not!), for the purpose of comparison with my parents. Of course, when we choose to retire years from now, I would expect the retirement income we need to be higher due to long-term inflation and future increases in the standard of living. This is also why it’s important for the Retirement Sums to be adjusted upwards every year.

Your Purpose During Retirement Will Determine How Much You Need


As shared above, even within the same family, you can see the differences between what my parents want for their retirement, and what my ideal retirement purposes would be. These differences also determine how much we need. Socialising with your friends and heading to the park or the library don’t cost much, if anything at all. Travelling overseas with your spouse and fellow retiree friends and keeping fit in a private gym is going to cost a lot more. And if I want to continue investing in private businesses or contribute to society in other ways, then I will need a much larger nest egg. 

This article was written by, in collaboration with CPF. All views expressed in this article are the independent opinion of is not liable for any financial losses that may arise from any transactions and readers are encouraged to do their own due diligence. You can view their full editorial policy here.


Information in this article is accurate as at the date of publication.