Are Your CPF Payouts Enough to Cover Your Retirement Needs?

According to OCBC Financial Wellness Index 2023, 6️⃣0️⃣% are working on retirement plan and only 3️⃣5️⃣% are on track with their plannings.

Additionally, to cover basic living needs after retirement, we should aim for a minimum of $2️⃣,6️⃣6️⃣5️⃣ per month. However, if we desire a more comfortable lifestyle including two overseas trips annually and hiring a full-time domestic helper, this figure can rise to $6️⃣,0️⃣2️⃣0️⃣. 🤨

Considering the impact of inflation, which has averaged 2️⃣.6️⃣% from 1962 to 2024 (The inflation rate averaged 4.2% in year 2023), if we take the example of $2️⃣,6️⃣6️⃣5️⃣ per month, its purchasing power 3️⃣0️⃣ years later, adjusted for inflation, would be approximately $5️⃣,8️⃣1️⃣6️⃣ per month.

To put it into perspective:

• $2,665 >>> $5,816

• $3,355 >>> $7,320

• $6,020 >>> $13,153

Here comes the second question, are CPF Life payouts sufficient to fulfil our retirement needs?

For those turning 5️⃣5️⃣ in 2024, the Full Retirement Sum (FRS) stands at $205,800. Using the same amount adjusted for 3️⃣0️⃣ years of inflation, the estimated monthly payout will range from $3️⃣,7️⃣2️⃣2️⃣ to $3️⃣,9️⃣8️⃣7️⃣. It is about 2️⃣/3️⃣ of the basic retirement lifestyle that we mentioned earlier ($5️⃣,8️⃣1️⃣6️⃣). 😮‍💨

Alternatively, individuals can opt for the Enhanced Retirement Sum (ERS), which currently sits at $308,700. If one tops up to the ERS at 5️⃣5️⃣ (because we can only start to top up ERS at 5️⃣5️⃣ ), the estimated monthly payout 3️⃣0️⃣ years from now ranges from $5️⃣,4️⃣3️⃣4️⃣ to $5️⃣,8️⃣5️⃣2️⃣, providing just enough to enjoy a basic retirement lifestyle. 🥺 （But starting next year we will have an increased ERS, which increases the monthly payout to $7,082.)

So if you think those CPF payouts are not sufficient for you, what will you do to increase your retirement savings?

1. Increase Savings Contributions: Consider allocating more of your income towards retirement savings accounts or investments outside of CPF to build a larger nest egg.

2. Extend Working Years: Continue working beyond the typical retirement age to accumulate additional savings and delay the need to rely solely on CPF payouts. (Individuals who defer payouts to age 7️⃣0️⃣ will receive about 3️⃣0️⃣% more monthly payouts compared to those who start at 6️⃣5️⃣ years old.)

3. Cut Expenses: Evaluate your current expenses and identify areas where you can reduce spending to free up more funds for retirement savings.

4. Explore Supplementary Income: Look into generating additional income streams through part-time work, freelance opportunities, or rental properties to supplement your retirement income.

5. Invest Wisely: Explore diverse investment opportunities to potentially grow your wealth over time. Consult with financial advisors to develop a personalized investment strategy aligned with your retirement goals and risk tolerance. (Despite the preference for self-help social media and online articles or forum channels, those who seek qualified advice from financial institutions have, on average, 3️⃣.3️⃣x higher rate of return on overall investments, according to OCBC.)

6. Consider Insurance Products: Explore insurance products such as annuities or retirement income plans that can provide a steady stream of income during retirement years.

📣Our team offers free advisory service for retirement planning, aiming to increase your retirement savings without sacrificing your current living standards, so drop me a chat if you would like a third-party and unbiased opinions to assess your current financial situations. 💪

根据2023年华侨银行财务健康指数，有6️⃣0️⃣%的人在制定退休计划，但只有3️⃣5️⃣%的人能预期执行其计划。

每月$2️⃣,6️⃣6️⃣5️⃣的开销可以满足在退休后的基本生活需求。然而，如果我们想要更舒适的生活方式，包括每年两次海外旅行和雇佣全zhi帮佣，这个数字可能会上升至$6️⃣,0️⃣2️⃣0️⃣。🤨

加上考虑通货膨胀的影响，如果以$2️⃣,6️⃣6️⃣5️⃣为每月zui低数额开销为例，3️⃣0️⃣年后我们需每月花费$5️⃣,8️⃣1️⃣6️⃣以达到相同的购买力。

（从1962年到2024年，通货膨胀率平均为2️⃣.6️⃣%。)

通货膨胀造成我们需要更多的退休储蓄：

$2,665 >>> $5,816

$3,355 >>> $7,320

$6,020 >>> $13,153

接下来是第二个问题，CPF养老金足够满足我们的退休需求吗？

对于那些在2024年年满5️⃣5️⃣岁的人来说，全额退休金（FRS）为$205,800。使用相同数额并根据3️⃣0️⃣年的通货膨胀进行调整，预计每月支付金额将会是$3️⃣,7️⃣2️⃣2️⃣至$3️⃣,9️⃣8️⃣7️⃣之间。这大约是我们之前提到的基本退休生活方式（$5️⃣,8️⃣1️⃣6️⃣）的三分之二。😮‍💨

另外，个人也可选择增强型退休金（ERS），目前为$308,700。如果一个人在5️⃣5️⃣岁时选择增加ERS（因为我们只能在5️⃣5️⃣岁开始投入ERS），那么从现在起3️⃣0️⃣年后的每月支付金额预计将会是$5️⃣,4️⃣3️⃣4️⃣至$5️⃣,8️⃣5️⃣2️⃣之间，刚好满足我们基本的退休生活方式。🥺（但从明年起，我们可增加更多的退休金（ERS），这将会使月支付增加至$7,082。）

因此，如果你认为CPF养老金不够多，你会怎么做来增加你的养老储蓄呢？以下是我们的建议：

• 增加储蓄额度：考虑将更多的收入分配至退休储蓄账户或CPF之外的投资中，以建立更健全的投资计划。

• 延长工作年限：超过退休年龄也继续工作，积累额外的储蓄。比起6️⃣5️⃣岁开始领取养老金的人，延迟至7️⃣0️⃣岁才开始领取的人将每月领取约多3️⃣0️⃣%的养老金。

• 削减开支：评估当前的开支，并划定可以减少支出的范围以投入更多资金用于养老金储蓄。

• 额外收入：寻找额外的收入来源，如兼zhi工作、自由职业机会或收取租金，以补充退休收入。

• 理性投资：探索各种投资机会以随着时间的推移增加你的财富。与财务顾问协商并制定与你的退休目标和风险承受能力相致的个性化投资策略。（根据华侨银行的数据，尽管人们更倾向于从社交媒体或论坛渠道获取投资建议，但那些从专业金融机构寻求帮助的人，在整体投资上的回报率平均高出3️⃣.3️⃣倍。）

• 考虑保险产品：探索诸如年金或退休收入计划等保险产品，这些产品可以在退休后提供稳定的收入。

📣我们团队提供免费的退休规划咨询服务，致力于增加你的退休储蓄而不牺牲你当下的生活品质。如果你希望获得第三方的意见来评估你目前的财务状况，请联系我。