27 Jan 2023

SOURCE: The Straits Times © SPH Media Limited. Permission required for reproduction

What is your idea of a happy retirement? When you look ahead to your golden years, do you see yourself living a worry-free and passion-filled, purposeful life? 

If you want to enjoy your retirement years, having a clear plan is key. Figuring out what makes you happy and gives your life meaning is crucial so that you can better understand what skills you may need and how much money you should set aside for them in retirement. 

To help with this, the Central Provident Fund (CPF) Board has curated resources on its website to guide you in making the most of your CPF to pursue your ideal retirement. It has tips and resources on how to grow your retirement savings, manage your housing payments, prepare for unexpected healthcare expenses, and achieve financial peace of mind with a suitable CPF LIFE plan. 

You will also find the CPF Planner, a handy new tool that assists you with your retirement planning, so that you can see how much you need to start saving now to enjoy the life you want in retirement.

For Executive Vivien Miranda, 34, doing some calculations on the planner gave him the assurance that he was on the right track. He says: “By playing around with the cash top-up and other simulation options, I was able to envision many different scenarios of what my retirement position could look like.”

“If I want to attain my goal of higher payouts in retirement after accounting for inflation, I will need to make some sacrifices and lifestyle adjustments now to reap the benefits later. The planner is like a time machine that gives you a preview of the future and allows you to avoid the pain of poor financial decisions, as you have the benefit of foresight to correct your course where necessary.”

Making the most of your CPF savings

The CPF Planner helps you calculate if your CPF savings will be sufficient to support your desired retirement lifestyle at age 65, by projecting your CPF contributions, interest earned and inflation. You can even find out what you can do to narrow or close the gap between your desired and projected CPF savings.

It takes about 15 minutes to complete and is simple to use. Ms Angel Zheng, 39, an administrative officer, says: “It’s easy to understand and the graphics are very helpful.”

She adds: “When I retire, I want to spend more time on hobbies and with friends and family, learn new languages and help others. The planner gave me a better idea of the amount I need in my CPF to achieve my desired monthly payouts and retirement lifestyle,  as well as my likely shortfall based on my current CPF account balances and contributions. I’ve started to think about how I can close this gap.”

Both cyber-security analyst Yip Xuan Yu, 29, and executive Halim Chua, 41, said using the tool has encouraged them to save more for retirement. 

Mr Yip, who plans to volunteer more during retirement, explains: “It helps to visualise how much more money you need for the retirement you want. To me, that’s motivation to contribute more towards proper retirement planning with CPF and other financial instruments.”

“With the planner, I can easily see how cash top-ups and transferring funds from my Ordinary Account to my Special Account, which earns more interest, will increase my CPF savings in retirement. I will do more of both after trying the planner, so that I can relax and do what I enjoy, like going out for meals and for holidays, when I retire,” adds Mr Chua.

Ms Zheng adds: “A healthy nest egg for retirement should help to cover the usual expenditures in life, including healthcare, home repairs, food, clothes and entertainment. I plan to ask my family and friends to try out the CPF Planner and help them take steps to improve the quality of their retirement life.”

Starting to plan now is key to a more fulfilling future, as 51-year-old former white-collar worker Richard Kuah can attest to. He started saving early and contributing to his CPF savings regularly. This has enabled him to realise his dream of becoming a full-time freelance nature guide now that he is semi-retired. 

“My journey started with one small step. It took me five years to turn my passion into a job I love. And the key is, I didn’t stop exploring. Like how I consistently contributed to my CPF and started saving early for my future.”

Find out how you can retire the way you want here. 

Information accurate as of date of publication.