Retirement is a significant milestone that requires thoughtful planning and financial foresight. In Singapore, the retirement plan landscape is built around strong social security foundations like the Central Provident Fund (CPF), supplemented by personal savings, investments, and possibly employer-sponsored benefits.
This comprehensive guide will walk you through the essentials of retirement planning in Singapore — from CPF payouts and CPF LIFE schemes to the tax implications of retirement benefits. Whether you're in your 30s or approaching retirement, this post will help you make informed decisions about your financial future.
Why Retirement Planning Matters in Singapore?
The cost of living in Singapore is high, and life expectancy is increasing. Singaporeans can expect to live well into their 80s, meaning your retirement savings need to stretch for two, even three, decades.
Effective retirement planning ensures:
- Peace of mind in your golden years
- Financial independence, reducing reliance on family
- Flexibility to enjoy the lifestyle you desire
1. Understanding Singapore's Retirement System
CPF Contribution as Retirement Plan
Singapore’s primary retirement savings tool is the Central Provident Fund (CPF). It's a compulsory savings scheme that supports Singaporeans in retirement, healthcare, and housing needs.
Every working Singaporean and Permanent Resident contributes to three CPF accounts:
- Ordinary Account (OA): For housing, education, and investment
- Special Account (SA): For old age and investment
- MediSave Account (MA): For healthcare expenses
When you turn 55, your Ordinary Account (OA) and Special Account (SA) savings are transferred to your Retirement Account (RA) up to the Full Retirement Sum (FRS), and the SA is closed, with the RA savings used to provide monthly payouts during retirement.
Tip: The more you top up your SA and RA, the higher your monthly retirement payouts.
For a full breakdown of retirement ages and CPF milestones, check out our detailed Retirement Age in Singapore Guide.
Lifelong Monthly Payouts with CPF LIFE
The CPF LIFE (Lifelong Income for the Elderly) scheme is a national longevity insurance annuity that provides Singaporeans with lifelong monthly payouts, starting from the payout eligibility age of 65, replacing the earlier Retirement Sum Scheme with its limited payouts.
CPF LIFE Plan Options
There are three CPF LIFE plans to choose from:
| Plan Type | Description |
|---|---|
| Standard Plan (Steady Payouts) | Provides fixed monthly payouts throughout retirement Good for those who prefer predictability and budgeting Doesn’t protect against inflation, so purchasing power may decline over time |
| Basic Plan (Progressively Lower Payouts) | Starts with lower payouts than the Standard Plan Payouts decrease over time, especially when your CPF balances drop below $60,000 Suitable for those who can adjust their lifestyle significantly in later years |
| Escalating Plan (Growing Payouts) | Starts with lower monthly payouts Increases by 2% annually for life Ideal if you’re concerned about rising living costs and want payouts that keep up with inflation |
Each plan suits different retirement preferences — whether you value steady payouts, a growing income, or leaving a bequest for your loved ones.
Retirement Sum Tiers
To qualify for CPF LIFE, you need a minimum amount in your Retirement Account at age 55. The tiers for 2025 are projected as follows:
| Retirement Sum Tier | Amount at Age 55 | Estimated Monthly Payout at 65 |
|---|---|---|
| Basic Retirement Sum (BRS) | $102,900 | $840 – $900 |
| Full Retirement Sum (FRS) | $205,800 | $1,560 – $1,670 |
| Enhanced Retirement Sum (ERS) | $308,700 | $2,280 – $2,450 |
Insight: If you own a property and choose to pledge it, you can set aside just the BRS and still receive monthly payouts via CPF LIFE.
2. Maximising Your CPF for Retirement
To boost your retirement readiness, you can make voluntary top-ups to your Special Account (if you're below 55) or Retirement Account (if you're 55 and above). Members have the option to top up beyond the FRS up to the current year's Enhanced Retirement Sum (ERS) for higher payouts.
Benefits of Top-Ups:
- Higher CPF LIFE monthly payouts
- Tax relief of up to $8,000 (plus an additional $8,000 if topping up for family)
- Risk-free interest of up to 6% p.a. for seniors aged 55 and above
Note: Top-ups are irreversible, so only commit funds you won’t need for emergencies.
3. Tax Implications of Retirement Benefits in Singapore
Understanding how retirement payouts affect your income tax is essential.
Are CPF Payouts Taxable?
No. According to the Inland Revenue Authority of Singapore (IRAS), CPF LIFE payouts and CPF Retirement Account withdrawals are not taxable.
Tax on Employer Retirement Benefits
If you receive a retirement gratuity or benefit from your employer, part of it may be taxable, depending on the circumstances:
- Retirement due to ill-health: Usually not taxable
- Voluntary retirement or retrenchment: Partially taxable depending on the nature of the payment
- Contractual retirement benefits (e.g., part of your employment agreement): These are generally taxable
You can find more details on IRAS’s official page here.
4. Supplementing CPF: Building a Holistic Retirement Plan
Relying solely on CPF might not be enough, especially if you have aspirations to travel, enjoy hobbies, or maintain a higher standard of living. Here’s how you can supplement your CPF:
1. Private Retirement Plans
Consider private retirement plans offered by insurers and financial institutions:
- Endowment plans
- Annuities
- Investment-linked policies
These can be tailored to match your desired retirement age, income needs, and risk profile.
2. Investments
Diversify your portfolio with investments in:
- Stocks and REITs
- Unit trusts
- ETFs
- SGS bonds and T-bills
Be mindful of the risk involved and always consult a licensed financial adviser.
3. Real Estate Income
Rental income from property can serve as an additional income stream. However, this requires capital outlay, property management, and comes with market risk.
5. Retirement Planning Milestones: Age-by-Age Guide
| Age Range | Retirement Planning Focus |
|---|---|
| 20s–30s | Build CPF savings, start investing, purchase insurance |
| 40s | Review net worth, increase CPF top-ups, assess long-term goals |
| 50s | Plan for Retirement Account (RA), consider private annuity products |
| 55 | OA & SA transfer to RA; assess CPF LIFE options |
| 65+ | Start receiving CPF LIFE payouts; manage drawdowns & expenses |
6. Retirement Planning for Self-Employed Persons (SEPs)
SEPs are not required to contribute to their OA or SA but must contribute to MediSave. However, they can voluntarily contribute to boost their CPF savings and qualify for CPF LIFE.
Tips for SEPs:
- Set aside a portion of monthly income for CPF top-ups
- Take advantage of tax reliefs via RSTU (Retirement Sum Topping-Up) Scheme
- Build a diversified investment portfolio outside CPF
7. Staying Active in Retirement: Jobs for Retirees
Retirement doesn't have to mean stopping work entirely. Many Singaporeans choose to remain active through part-time roles or flexible employment. This helps supplement income and keeps you socially and mentally engaged.
Explore practical options in our guide on Jobs for Retirees in Singapore.
8. Digital Tools and Resources
Here are some helpful CPF tools to project your retirement payouts:
- CPF LIFE Estimator – Estimate monthly payouts based on current savings
- My CPF Mobile App – Track contributions and view retirement readiness
- CPF Retirement Planning Service – One-on-one consultations (online or in-branch)
Start Planning Smarter, Retire Happier Later!
Planning for retirement in Singapore is more than just saving — it’s about strategising. With CPF as the bedrock, complemented by private savings and prudent investments, Singaporeans can look forward to a secure and fulfilling retirement.
Make full use of government schemes like CPF LIFE, voluntary top-ups, and tax reliefs. Stay proactive, review your goals regularly, and seek professional advice where needed. Your future self will thank you.
