By Daphne Lye
Senior Lead, Solutions, Research & Investment, MoneyOwl
A joint CIMB-NTU study1 released in May 2026 found that 56.3% of Singapore residents aim to save more than $1 million for “financial independence”, up from 52.3% just a year earlier. The retirement benchmark has also shifted earlier, from the 50s into the 40s, with Gen Z aiming for financial independence in their 30s.
Big numbers like these can make planning feel overwhelming, especially with the added noise of financial jargon and the plethora of insurance and investment products. But retirement planning really comes down to one main aim: making sure that you have sufficient money that enables a good life and doesn’t run out no matter how long you live.
Planning ahead matters more than ever. The same study found that fewer than half of Singapore residents have actually begun retirement planning, even as we live longer and our savings need to stretch across more decades. At the same time, more of us are experiencing job disruptions, taking career breaks, or doing gig work, so our income and CPF contributions are not as steady as they used to be.
With ambition rising faster than action, let’s bust the five biggest retirement myths holding people back, and look at how you can start building a resilient income for your future.
Myth 1: “I need a certain number of millions to retire.”
News headlines claiming you need millions to retire in Singapore often cause people to freeze up into inaction. But the reality is that such numbers aren’t meaningful.
In retirement, your focus should switch from hitting a giant savings goal to generating cash flow. A successful retirement is about building a system that pays you reliable monthly income for as long as you live – with the income for your basic needs being “extra” secure and “extra” certain. To do this, you need to look at your available income sources and plan for how to draw down your savings over time.
Ultimately, there is no one-size-fits-all number, beyond basic minimum thresholds (such as the Full Retirement Sum – see below). The right amount to save depends on several variables: when you plan to retire, the lifestyle you expect, the types of assets you currently hold and how you plan to draw down from those.
Myth 2: “My retirement is secured by my automatic CPF deductions. I don’t need to do anything more.”
CPF is a great national safety net that grows our money at high risk-free interest rates of up to 6% p.a. and provides lifelong monthly payouts through CPF LIFE when we retire. Because of this, some may assume that simply working and contributing to CPF is enough to sort out our retirement.
However, CPF is designed to cover only basic needs, aimed at a lower-middle income segment’s lifestyle as the core. For example, hitting the Full Retirement Sum in 2026 gives you about $1,780 a month from age 65. But after accounting for inflation, that will only buy about $1,460 worth of goods in today’s dollars2. Even the highest tier of the Enhanced Retirement Sum provides a non-luxurious income ($2,8203 in today’s dollars) compared to what most Singaporeans earn today4.
Furthermore, an outsized portion of our working CPF contributions in our younger years goes into our Ordinary and MediSave Accounts for our housing and healthcare needs, leaving a surprisingly low amount allocated for retirement in the Special Account.
Table 1: CPF contribution and allocation rates as of 1 January 2026
To fund the lifestyle you truly want in retirement, you need to actively build up your nest egg either by topping up your CPF or through private savings and investments.
Myth 3: “I don’t need so much for retirement. I will spend much less.”
Many of us assume that once we stop working, our spending will drop drastically. We picture a simpler, more prudent lifestyle without daily commutes or work lunches, leading us to believe we don’t need a large retirement fund.
However, prices will continue rising even in retirement. For a retirement that can easily last 20 to 30 years, the rising cost of daily essentials will silently eat away at your purchasing power. Even with modest inflation5, a lifestyle that costs $2,000 a month at age 65 will cost close to $3,000 a month by the time you are 85.
Furthermore, certain expenses will increase as you age, with healthcare being the biggest culprit. Healthcare takes up 16% of expenditure for Singapore retiree households, which is double that of the general population.6 Rising insurance premiums, a higher incidence of health issues, and unexpected out-of-pocket medical bills mean you need a solid financial buffer in your silver years.
Myth 4: “I shouldn’t spend from principal.”
Some Singaporeans hold a deep-rooted belief that they should avoid drawing the “principal” or capital amount of their retirement savings. Driven by a desire to leave an inheritance and the fear of running out of money, some retirees try to live entirely off interest, dividends, or rental income from their portfolio.
While leaving money for the next generation is laudable, this mindset often leads to taking more risks, such as being concentrated in property, in a small number of stocks or bonds, and/or taking on big credit risk with “junk” bonds that pay a high coupon.
Should these investments fail, the consequences are not just a smaller legacy. What is more significant is the resultant loss or reduction of income. When these risks materialise, you open up a brand-new set of insecurity in your lattermost years. Because you have the least capacity to handle it at this time, you inadvertently and counterproductively become financial dependant on your family.
Instead, please understand and accept that your retirement portfolio’s primary purpose is to fund your golden years. Ensuring your own financial stability should take precedence over passing down wealth, especially if you have limited savings, so that you take care of yourself well and by so doing, free your family from worry.
A well-structured retirement plan accounts for “decumulation” – the gradual, safe drawdown of your principal alongside returns, in a way that stretches your money for as long as it is needed. With a sustainable withdrawal strategy and the right financial tools, you can comfortably enjoy your hard-earned money without the anxiety of running out of money in your later years.
Myth 5: “Retirement planning is too difficult. I give up.”
Figuring out how CPF, cash and investments all work together to create a sustainable monthly income can feel overwhelming. Given the complexities of inflation, changing policies, and the sheer number of variables involved, it is understandable why many people put off planning altogether.
However, gaining clarity on your financial future is no longer a difficult process. MoneyOwl’s Retirement Income Builder tool is designed to simplify the math, allowing you to independently map out a personalised plan at your own pace – combining both CPF and non-CPF sources of retirement assets.
This is totally free to use, with no call to buy any product or attend any in-person session that might lead to sales, and no collection of personal particulars.
The Retirement Income Builder is part of MoneyOwl’s suite of Decision Intelligence offering born out of our social purpose to enable better financial security for all.
By simply inputting your age and gender, current assets and your desired monthly retirement income, the tool projects your future income sources. It calculates your CPF LIFE payouts and models a sustainable drawdown strategy for your private assets from age 65, giving you a clear picture of how long your savings will last.
The A.I. engine also describes to you how your current retirement situation fares in terms of Safety, Sufficiency and Flexibility – more on this in our next article.
If there is a shortfall, you have actionable options to improve your retirement readiness. Whether it involves adjusting your savings rate, optimising your investments, or making CPF top-ups, you can learn more about your options and see how they improve your retirement outcome.
Start Planning with Confidence
Retirement planning doesn’t have to be a guessing game nor a source of anxiety. By clarifying common myths and misconceptions, the path forward becomes clear: focus on sustainable cash flow, account for inflation, build upon your CPF foundation, and don’t be afraid to enjoy the wealth you have worked so hard to build.
The best time to gain clarity on your financial future is today. Take five minutes to plug your numbers into the free Retirement Income Builder and discover what your future paycheck looks like.
Disclaimer: While every reasonable care is taken to ensure the accuracy of information provided, no responsibility can be accepted for any loss or inconvenience caused by any error or omission. The information and opinions expressed herein are made in good faith and are based on sources believed to be reliable but no representation or warranty, express or implied, is made as to their accuracy, completeness or correctness. MoneyOwl shall not be liable for any loss or expense whatsoever relating to investment decisions made by the reader. This article has not been reviewed by the Monetary Authority of Singapore.
- Source: CIMB Attitudes and Beliefs towards Financial Independence Report 2026 ↩︎
- Based on male CPF member turning 55 in 2026 on the CPF LIFE Standard Plan. Inflation assumed to be 2% p.a. ↩︎
- The Enhanced Retirement Sum payout from 2036 is $3,440. When adjusted downwards for inflation, that amount is $2,820 in 2026. ↩︎
- Ministry of Manpower: Median gross monthly salary from employment of full-time employed residents in 2025 is $5,775. ↩︎
- Inflation assumed to be 2% p.a. ↩︎
- Based on Household Expenditure Survey 2022/2023 – health expenditure per member among retiree households is $224 per month, compared to the total average expenditure of $1,384. ↩︎
