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Money
not enough...
for retirement

	Nowadays things are getting so expensive! A bowl of noodles only cost 20 cents in the old days. Look at the price now! $3 for a small bowl of noodles!
	Pa, this is inflation at work.
	Yah, when I retired at 65, I thought my savings would be enough to last me till 80. Looking at the way things are going now, I wonder if it's even enough to last me beyond the next few years.
	Don't worry Pa, you still have me.
	I know you are a filial son. But you are already trying to make ends meet. That's why I saved for my retirement years ago.

Money not enough ... for retirement

DO YOU KNOW HOW MUCH YOU NEED WHEN YOU RETIRE?

Below is an example of how much Wisely Lim will need when he retires.

EXAMPLE:

Assume Wisely is currently 45 years old. If he continues working until he retires at age 62, he will be able to accumulate another 17 years (62 - 45) of income.

He would like to retire with an annual income of $18,000 (in today's dollar). Due to inflation, by the time he retires, this sum will be equivalent to $18,000 x 1.4 = $25,200. (See Chart B, item for 17 years)

Assume a life expectancy of age 83 for males (for females, assume life expectancy of 88 years), he will need to provide for 21 years (83-62) of retirement income.

He will thus need to accumulate $17,351 (See Chart A, item for 21 years) x $25,200/$1,000 = $437,245
by the time he retires at age 62.

Using the above example, you, too, can work out how much you would need to accumulate for your retirement.

Money not enough ... for retirement

Some financial planning experts say that, as a rule of thumb, you need at least 70% of your last annual income to maintain your current lifestyle during retirement.

Many people have the misconception that their CPF savings would be enough to see them through their retirement.

Remember that CPF savings are only meant for basic retirement needs. If you contribute regularly from the time you start work, you will only have enough CPF savings for a life annuity to provide a monthly retirement income of 20% to 40% of your last take-home pay and Medisave for your basic healthcare needs by the time you retire.

Depending on your retirement lifestyle needs, your CPF savings alone may not be enough for your retirement. You thus need to ensure you have your own savings and investments to supplement your CPF. If you are thinking of generating some income during your retirement, you can consider the following:

• Annuities
• Savings or investment accounts
• Certificates of Deposit
• Reverse Mortgage

Speak to a financial adviser if you wish to find out more about these options.

Getting Started – CPF Retirement Planner

Plan early for your retirement. Your CPF savings can only cover basic retirement needs. Use the CPF Retirement Planner at www.cpf.gov.sg to find out if you have enough for your golden years.

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