As the needs of everyone are different and there’s no one-size-fits-all, this simple retirement planning calculator would allow you to estimate how much you need to retire in Singapore.
Basically, we want to find out that total lump sum needed at retirement age.
The Average Monthly Expenses of a Retiree in Singapore
One of the fields required is how much retirement income you need in today’s value.
Now to find an average of how much retirees are spending isn’t that easy.
It’s because retirees could be staying in households where there are active income earners (their children) and vice versa. This will mean that expenses may be shared between them. Furthermore, retirees could also live on their own.
But here are some data from a survey done:
| Average Monthly Household Expenditure | |
| HDB (1 to 2 rooms) | $1,545 |
| HDB (3 rooms) | $2,709 |
| HDB (4 rooms) | $3,933 |
| HDB (5 rooms & executive) | $5,504 |
| Condo & Other Apartments | $7,963 |
| Landed Properties | $10,500 |
| Total | $4,906 |
| Average Monthly Household Expenditure (households comprising solely non-working persons aged 65 years and over) | |
| HDB (1 to 2 rooms) | $891 |
| HDB (3 rooms) | $1,206 |
| HDB (4 rooms) | $1,555 |
| HDB (5 rooms & executive) | $1,948 |
| Condo & Other Apartments | $4,571 |
| Landed Properties | $4,645 |
| Total | $1,966 |
| Average Monthly Household Expenditure Per Household Member (households comprising solely non-working persons aged 65 years and over) | |
| HDB (1 to 2 rooms) | $678 |
| HDB (3 rooms) | $786 |
| HDB (4 rooms) | $979 |
| HDB (5 rooms & executive) | $1,061 |
| Condo & Other Apartments | $2,679 |
| Landed Properties | $2,171 |
| Total | $1,154 |
But these averages shouldn’t matter to you.
SIDE NOTE
Most people's finances aren't a plan. They're a collection of separate decisions: a policy bought years ago, investments that don't talk to each other, a will that's still on the to-do list.
If that sounds familiar, there's a fix that doesn't require becoming a finance expert.
Here's the 7-step framework we use to organise everything into one system.
How Much You Need for Retirement
In deciding how much you need for retirement, you shouldn’t be looking at the average of what retirees are spending.
This figure should entirely come from you based on what type of retirement lifestyle you desire.
How much do you expect to spend during your retirement years?
Here are some of the typical expenses to think about:
If you tabulate everything (you can use a budget/expense calculator or template), you’ll get your monthly figure in today’s value, and then you can put that into the retirement calculator.
But there are other ways to calculate this. All including the above method are still estimates, which is why constantly reviewing your finances is important.
Another way to estimate your retirement expenses is to take 80% of your current monthly expenditure.
3 Inferences You Can Make From Your Numbers
After inputting all your numbers, here are some scenarios that can happen:
QUICK CHECK
Can you answer these three questions?
1) How much would your family receive if something happened to you tomorrow?
2) What monthly income will your savings and investments actually produce at 65?
3) Who gets your assets, in what proportion, if you never get round to a will?
Most people can answer one at best. Not because they're careless, but because nobody's shown them the order to work through things.
That order exists. Here's the 7-step framework, from income and protection through to investments and estate planning.
1) Retirement Shortfall Is Positive or Negative
If your Retirement Shortfall is Negative
Congratulations! If you continue to do what you’re doing, then you’re likely to hit your goal. However, it’s always good to create a buffer to cushion against the unexpected. Or you can consider estate planning to leave more for your dependants.
If your Retirement Shortfall is Positive
It’s time to do something about it.
Continuing at this pace, you might not be able to achieve what you want in the future. Steady gains are what matters now. You can just start small to get into the habit of saving for retirement.
2) The Monthly Amount to Save From Now to Retirement Age Is Too High
The assumption is that you’re saving this amount in the bank.
If it’s too high, the workaround is to save/invest in alternate assets that can generate potentially higher returns, which will then bring that figure down.
There are various retirement solutions available. For those who are more conservative, consider annuity plans as they are usually capital guaranteed upon maturity, and provide guaranteed and non-guaranteed income.
3) The Time Period to Save Is Fixed
Whatever you’ve entered will be what you desire.
That includes your intended retirement age.
This means that the number of years you have from now till then stays fixed.
As your shortfall doesn’t change, if you were to start saving/investing later, the monthly savings needed will only increase, and the journey will only get steeper.
So, start saving for retirement as soon as possible to capitalise on time and the power of compounding.
What’s Next?
When you know how much you need to retire and how much you have right now, you have a better idea of where you stand.
If you feel like something needs to be done, the next question is “where do you start?”
To begin, you can check out our guide on retirement planning in Singapore.
Also, find out what are some of the best retirement solutions available.
BEFORE YOU GO
Everything on this site is written for everyone. But your financial goals, your responsibilities, and what you already have in place are yours alone.
FullCircle is our comprehensive financial planning session. You'll walk away with a clearer picture of where you stand and what to prioritise, across protection, retirement, and estate planning.