Do I have enough to retire on?

It’s a question that has been playing on my mind. You see, I’ve been working since the age of 16. I’m 41 this year. I have four online businesses bringing me multiple sources of income. While it may sound like I would have no problem retiring soon, truth be told, I’m like most people my age.

We are a part of the sandwich generation and still figuring out how to best provide for our loved ones while worrying about our retirement.

What is a ‘sandwich generation’?

According to Wikipedia, a sandwich generation is a group of middle-aged adults who care for both their ageing parents and their own children.

In other words, we have to face twin financial pressures of supporting both the old and the young. As a result, we would exhaust our savings and very often, neglect our own retirement planning.

And this turns into a vicious cycle. If we don’t have enough to retire on, we then pass the financial burden onto our children to care for us when we are old.

I certainly do not want my kids to be my retirement plan.

Creating a retirement plan is crucial for ensuring a comfortable retirement and avoiding the burden of financial dependence on our children. It’s important to make informed financial decisions and develop a plan that includes strategies for saving enough money for the transition. 

This could include opening retirement accounts, making necessary investments, or setting up automatic recurring deposits. And as our savings start to build, we should be mindful of the financial mistakes to avoid during retirement to spend our retirement funds more effectively. 

So what are my options?

Apart from downgrading my lifestyle, monetising my house by moving to a smaller flat or continue working, a better option for me would be to start planning for my retirement now.

My retirement plan

First things first, how much money you need to retire really depends on your current lifestyle, and also the lifestyle that you envision yourself living when you retire.

Estimate how much money would you need on a monthly basis to cover your rent/home-instalment, food, transport, basic necessities and perhaps for leisure? Would you like to travel? If so, how often? Or perhaps, you’re very sociable. You like to host dinner parties. Or you love shopping.

Those things add up. And remember to consider inflation too.

A well-crafted retirement plan can help prevent us from feeling anxious and depressed about money issues and maintain our standard of living and independence during our retirement. By taking retirement planning seriously and starting the process as soon as possible, we can prevent ourselves from becoming a burden on our children in the future. 

But how do we develop a retirement plan? 

I live a pretty simple life. Branded bags and shoes aren’t my cup of tea. But I enjoy dining out with friends or hosting dinner parties at home. I can imagine that when I’m older and when the kids have all moved out, I probably would like to continue socialising over meals and not having to cut back on the quality of food that I eat or stop doing what I enjoy.

I’ve seen my friend’s parents who didn’t have enough to retire on. Not only did they have to downsize and count every single dollar, every time a huge expense occurs (medical fees, travel plans, etc), it becomes a burden on their children. It could take a toll on siblings’ relationships when they constantly have to discuss who’s responsible for their parents’ expenses.

I certainly do not want to feel like a burden to anyone.

What do I do to ensure I have enough to retire? 

Now that we have a plan outlining the strategies for saving for retirement, it’s time to put it into action. Saving for retirement may seem daunting, but there are many ways to make it more manageable. For example, we can try cutting back on expenses, such as eating out less or canceling subscriptions we don’t need. We can also consider downsizing our home or car or finding ways to earn extra income.  

In my case, my first go-to plan for retirement is to build my business to a stage where it could run without me. For it to become a sustainable business which I could either pass on to one of my children or hire a CEO to run it on my behalf or cash out and sell for a lump sum.

You’ve probably heard people say “make your money work for you.” I’d certainly like that but I’m a very careful person. I like to know and fully understand what I invest in. I have investments in properties, unit trusts and investment funds.

For those of you who are not business owners or simply don’t have time to manage your own investments, you can consider investing in Exchange-traded funds (ETFs), unit trust or even those long-term investment plans that comes with an insurance policy. Do talk to your financial advisor about your long-term financial needs and goals.

I must say that every investment requires careful consideration and varying degrees of time needed to manage and monitor. And one of the easiest and risk-free methods to grow your retirement savings is to continue to contribute to your CPF or find ways to optimise your CPF savings.

And even as a business owner, I pay myself a salary and contribute to CPF regularly.

How does CPF help in growing my savings for my future? 

If you’re employed, CPF requires zero effort on your part. Your contribution and your employer’s contribution go automatically into your CPF accounts every month. Everyone knows that. But in case you aren’t sure, our CPF contributions go into these three accounts – Ordinary Account (OA), Special Account (SA), and MediSave Account (MA) (The Retirement Account is created at 55 years old):

If you’re self-employed, you can also choose to make cash or CPF contributions to your other CPF accounts, on top of the mandatory MediSave contribution.

So there, whether you realise it or not, you do have a retirement plan in CPF already.

How can you maximise your retirement plan with CPF?

If you have discretionary income, meaning that you have money left to save or spend after your necessities are paid, I do encourage you to top up to your Special Account (SA), ie. grow your retirement savings.

Why? Because not only does your savings in your SA earn you attractive, risk-free interest rate of up to 5% p.a.*, topping up your SA with cash under the Retirement Sum Topping-Up Scheme also allows you to enjoy tax relief**equivalent to the amount of cash top-ups made (up to $7,000). It’s better than putting cash into a bank account and lose money to inflation. To find out how much you can top up, you can visit the CPF website and login with your Singpass to my cpf Online Services > My Messages.

If you are also making cash top-ups for your loved ones – parents, parents-in-law, grandparents, grandparents-in-law, spouse and siblings, you can enjoy additional tax relief** of up to $7,000 per calendar year. You can also check if you or your loved ones are eligible for the Matched Retirement Savings Scheme, which can double cash top-ups made to the RA, up to $600 per year, from 2021 to 2025.

The thing is – you don’t have to make a large amount for top-ups. It can be small and regular. Even with just $50 a month, it’ll still make an impact over time.

“Sikit sikit, lama lama jadi bukit” is one of my favourite Malay idioms which mean “Just a little and over time, it becomes a hill”. And it’s certainly true with savings and investing.

With the power of compound interest, top-ups of $50 a month would accumulate to over $12,000 in 15 years***.

What we need though is time. And that’s why if you haven’t looked into maximising your CPF account as your retirement plan, I urge you to start now. Don’t wait until it’s too late.

A dream retirement is certainly achievable if we plan ahead. If you don’t know where to even begin, don’t worry. You can always ask for advice and become financially savvy by finding out more. Information is at our fingertips. Don’t make “not knowing” an excuse for not starting. For the best and most accurate information about retirement planning with CPF, head over to and follow CPF on their social channels. Gotta love the bite-sized financial tips!

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* Members who are below 55 years old are paid an extra interest of 1% per annum on the first $60,000 of their combined balances (capped at $20,000 for Ordinary Account (OA)). Members who are 55 years old and above are paid an extra interest of 2% per annum on the first $30,000 and 1% per annum on the next $30,000 of the combined balances (capped at $20,000 for OA).

** Only cash top-ups within the current Full Retirement Sum are eligible for tax relief. Tax relief is subject to a personal income tax relief cap of $80,000. Terms and conditions apply.

*** Computed using the base interest of 4 per cent per annum on your Special or Retirement Account.