Full Retirement Sum is not enough to retire on!


It has been quite a while since I tinkered with the CPF website.

I remember how I used to visit the website very often back in the days when I was actively plotting how to make full use of the CPF system.


Anyway, as I close in on 55 years of age, I decided to revisit the CPF website.

That is when I get a Retirement Account set up.

I thought it would be a good idea to check on how much my Full Retirement Sum would be by then.


This was what I found:


So, it would be $220,400 for me.

My CPF-SA has more than that right now and it will continue to grow based on interest earned yearly alone.

Therefore, it isn’t a worry for me.

This was how it looked at the beginning of the year:

Then, I checked how much I would get when CPF LIFE kicks in for me at age 65.

For this, I used the CPF LIFE estimator: HERE.

I had to tell the AI that I am 55 years old now in order for it to work and then input the FRS for my age group.

It is a fun calculator to use because I was able to use sliders to change the payout age and also the amount of funds involved to see how things would look like.

Anyway, if I just stuck with the FRS of $220,400 and had the payout start automatically at age 70, I would be paid $2,380 monthly.

If I should request for payouts to start at age 65 instead, I would be paid $1,760 monthly.

Back in 2014, I published a popular blog post that has received almost 50,000 pageviews by now.

It was “To retire by age 45, have a plan.

In that blog post, I said that I wanted to retire by age 45 and thought I would be quite comfortable with $2,500 a month in passive income.

I accounted for inflation and by age 65, I would need $5,081 a month in passive income.

I calculated the required monthly passive income till age 75.

If you are interested to see all the numbers at various ages, please go the blog post and I have hyperlinked the title earlier.

So, what is the point I am trying to make?

For me, at least, the Full Retirement Sum is not enough to retire comfortably on.

At age 65, there would be an estimated shortfall of $5,081 – $1,760 = $3,321 a month.

Please don’t get me wrong. 

I think that the CPF LIFE is a very good idea because many people are not very good with money and even worse at planning for retirement funding.

So, with CPF LIFE, at least there is some kind of minimum safety net.

However, that is what it is.

A minimum safety net.

In case you are wondering what triggered this blog post, it was a news article on how Singaporeans are falling behind in savings and more can only afford basic expenses.

See article in The Business Times: HERE.

“More Singaporeans can afford only basic spending, don’t have enough savings, a survey by OCBC found.”

“Most do not have sufficient “emergency funds” or enough savings to meet their families’ needs over the next year.”

We really want to take action early to help ensure retirement funding adequacy.

During good times, don’t become complacent because bad times could hit us when we least expect them to.

Always have a crisis mentality.

It might not be fun but we should do better than those who don’t.

If AK can do it, so can you!

Note: Numbers are based on CPF LIFE Standard Plan.

Recently published:
3.75% p.a. cut-off yield for T-bill.

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