How To Invest For Retirement In Singapore

Building a robust retirement fund often requires going beyond your CPF contributions. While CPF LIFE offers a reliable foundation, it may not fully support the lifestyle you envision. To bridge the gap, it’s wise to diversify with long-term investments across different asset classes, helping you balance risk and growth. 

The right mix of instruments will depend on your risk appetite, financial goals and investment horizon. Here are some practical options to consider when planning for retirement in Singapore.

» MORE: How to start investing in Singapore: A beginner’s guide

Target-date funds (TDFs) are professionally managed funds that automatically adjust their asset allocation as you approach your chosen retirement year. In your younger years, TDFs hold a higher proportion of equities to maximise growth potential. As the target date nears, the fund gradually shifts towards bonds and other lower-risk assets, making your portfolio more conservative over time. This “set-and-forget” approach appeals to investors who prefer simplicity but still want their investments to match their life stage. TDFs are available through major local banks and online investment platforms in Singapore.

Exchange-traded funds 

Exchange-traded funds (ETFs) are investment funds traded on stock exchanges, providing diversified exposure to a specific market sector or index. By packaging a basket of securities that mirror an index, ETFs give Singaporean investors broad market diversification at a lower cost than buying individual stocks. They are ideal for those seeking passive, cost-effective investments and can be purchased through brokerage accounts or regular share savings plans.

Index funds

Index funds aim to replicate the performance of a chosen market index, such as the Straits Times Index (STI). Because they simply track the index rather than trying to beat it, they typically come with lower management fees. For long-term retirement planning, index funds are a straightforward way to gain broad market exposure and steady growth.

» MORE: Index fund vs. ETF: The key differences

Mutual funds

Mutual funds pool money from many investors and are actively managed by professional fund managers. These managers attempt to outperform the market through strategic asset selection. Mutual funds can provide exposure to local and international markets and a wide range of asset classes. However, the active management usually results in higher expense ratios, and success depends on the manager’s skill.

» MORE: What are index funds and mutual funds?

Investing directly in individual stocks offers potential for higher returns and long-term capital growth that can outpace inflation. Dividend-paying stocks may provide a steady stream of passive income to supplement retirement funds. However, individual equities carry company-specific risks and are subject to market volatility.

Bonds, on the other hand, provide greater stability and predictable returns. Singapore Government Securities, including Singapore Government Bonds and Treasury Bills, are considered low-risk and can serve as a buffer against equity market fluctuations. Many investors hold a mix of stocks and bonds to balance risk and reward.

New investors who find direct stock or bond selection daunting can consider robo-advisors. These digital platforms build and manage a diversified portfolio for you based on your goals and risk profile, making investing accessible even with smaller amounts of capital.

» MORE: Investing S$100,000: How to build a stock portfolio

Annuities offer guaranteed income for life, helping ensure financial security during retirement. CPF LIFE, Singapore’s national annuity scheme, provides lifelong monthly payouts funded by your CPF Retirement Account (RA) savings. Private annuities from insurance companies can complement CPF LIFE by providing additional guaranteed income.

CPF retirement sum topping up

For Singaporeans and permanent residents, CPF LIFE payouts form a base level of monthly retirement income. Your payout depends on the savings in your RA and the plan you choose – Basic, Standard or Escalating.

Voluntary top-ups to your Special Account (SA) or RA via the Retirement Sum Topping Up (RSTU) Scheme can grow your nest egg faster. Contributions earn a risk-free annual interest of at least 4% and provide up to S$14,000 in tax relief each year. However, CPF LIFE payouts start only at age 65, and top-ups are irreversible.

Singapore Savings Bonds

Singapore Savings Bonds (SSBs) are government-backed and virtually risk-free, offering flexible tenures of up to 10 years. They pay interest that steps up over time and can be redeemed early without penalty. For example, a S$10,000 SSB issue in August 2025 offers an average return of about 3.2% per year if held to maturity, with interest paid every six months.

» MORE: Fixed deposits (FD) vs. Singapore savings bonds (SSB): What’s the difference?

Savings plans

Banks and insurers in Singapore offer savings plans that require you to lock in funds for a fixed term, usually three to five years, in exchange for a guaranteed interest rate. Some plans include a small insurance component for added protection. While generally less liquid than SSBs, these plans can provide slightly higher fixed returns if you can commit to the holding period.

Regular shares savings

Regular Shares Savings (RSS) plans let you invest a fixed amount, often from as little as S$100 per month, into selected stocks, REITs or ETFs listed on the SGX and certain overseas exchanges. This is an accessible way for beginners to start investing steadily over time. However, returns are not guaranteed, and you must be comfortable with market risk and prepared to stay invested long term.

Retirement products

Insurance companies offer retirement income products that complement CPF LIFE. These products typically allow you to choose a premium payment period and payout age, after which you receive guaranteed monthly income for a set number of years or for life. Some plans also include bonuses or non-guaranteed returns that can boost payouts.

Singaporeans can access both CPF LIFE and the Supplementary Retirement Scheme (SRS) to fund their retirement.

CPF LIFE

CPF LIFE provides lifelong monthly payouts starting from age 65, funded by the savings in your Retirement Account. The higher your RA balance, the larger your monthly payouts will be. 

Supplementary Retirement Scheme

The Supplementary Retirement Scheme (SRS) complements CPF by offering tax benefits and flexible investment options.

There is no single figure that guarantees a comfortable retirement because everyone’s lifestyle expectations and financial circumstances are different. A frequently cited rule of thumb is to set aside 10–15% of your monthly income for retirement. This can be a good starting point, but it is important to refine the number based on your personal goals.

Here are some key steps to guide your calculations:

1.  Estimate your annual expenses 

Start by listing everyday costs such as food, utilities, transport and leisure, along with recurring expenses like healthcare and insurance premiums. Healthcare can be a major variable, as medical costs in Singapore have historically risen faster than overall inflation.

2.  Decide your retirement age 

If you aim to retire earlier than 65, you’ll need a larger buffer to cover the years before CPF LIFE payouts begin. For example, a couple retiring at 60 and spending S$4,000 a month would require at least S$240,000 to fund the five-year gap before CPF income kicks in.

3.  Factor in life expectancy 

Many Singaporeans live into their late 80s or 90s, making a retirement span of 25 to 30 years common. Financial planners often suggest targeting 70–80% of your final working income to maintain a comfortable lifestyle over this period.

4.  Account for large one-off expenses 

Major costs such as funding children’s education or a big home renovation should be planned separately from daily living needs. This ensures your core retirement funds remain intact.

Remember, CPF LIFE provides a base layer of guaranteed income, but supplementing it with investments such as ETFs, SSBs, or annuities can help close the gap between your projected expenses and CPF payouts.

Inflation refers to the general increase in prices over time, which reduces the purchasing power of money. Even modest annual inflation compounds significantly over decades. At an average 3% annual inflation rate, S$1,000 today will only buy what S$552 can purchase in 20 years. At 4%, that figure falls to around S$456.

This has two key implications for retirement planning. First, your savings target must account for rising costs. If you estimate that you need S$3,000 a month for a comfortable lifestyle today, you might need closer to S$5,400 a month in 25 years at a 3% inflation rate. Second, your investments must generate returns that at least match or exceed inflation to preserve your standard of living.

Low-yield instruments such as fixed deposits may struggle to keep pace with inflation, especially after factoring in taxes and fees. Diversifying into growth assets like equities, REITs, or balanced funds can help your portfolio stay ahead of rising prices. Even after retirement, it is wise to maintain some exposure to assets with growth potential rather than shifting everything into ultra-conservative holdings.

Singapore’s official retirement age will rise to 64 by 2026, with the re-employment age increasing to 69. These changes are designed to help older workers stay economically active and give them more time to build their retirement savings. If you are able and willing to work longer, the extra years of income can make a meaningful difference by allowing you to save more, defer withdrawals, and continue receiving employer CPF contributions.

However, it is equally important to plan for scenarios where you may have to stop working earlier than expected. Health issues, family responsibilities or company restructuring can force an unplanned exit from the workforce. Because CPF LIFE payouts only begin at age 65, you could face a gap between your final paycheque and the start of your guaranteed CPF income.

Building a separate pool of accessible savings or investments, such as a cash reserve, SRS funds, or a diversified portfolio of liquid assets, can help bridge this period. Some investors also rely on dividend-paying stocks or rental income to provide flexible cash flow. 

The key takeaway is to prepare for both possibilities: the opportunity to work longer and the risk of having to retire earlier, so that your financial plan remains resilient under different life circumstances.

Your retirement strategy should fit into your overall portfolio. Consider your goals, time horizon and risk tolerance when allocating assets across CPF, SRS and other investments.

Asset allocation strategies for Singaporean investors

Planning for retirement is a crucial aspect of financial well-being, especially in Singapore. As you navigate the complexities of long-term financial goals, understanding your savings needs and strategies at different stages of life can make a significant difference in securing a comfortable future. 

• Early Stage (20s-30s): With a long investment horizon, you can embrace more risk. Aim for a higher allocation (70-80%) to growth assets like equities, with a smaller portion (20-30%) in lower-risk assets such as bonds. Explore options like the CPF Investment Scheme (CPFIS) to diversify your CPF savings across equities, bonds, and other asset classes.

• Mid-Stage (40s-50s): As retirement approaches, gradually reduce your equity exposure (60-70%) and increase your allocation (30-40%) to conservative assets like bonds and dividend-paying stocks. This strategy helps safeguard your accumulated wealth while still allowing for growth. Consider using the Supplementary Retirement Scheme (SRS) to further diversify your CPF savings, enjoy tax benefits, and invest in a broader array of retirement-focused products.

• Late Stage (60s and beyond): At this stage, capital preservation is key. Allocate a larger portion (70-80%) of your portfolio to lower-risk assets like bonds and a smaller portion (20-30%) to equities. Ensure a significant portion of your investments provides stable income, such as Singapore Savings Bonds (SSBs) and annuities. CPF LIFE will also be a vital component of your retirement income strategy.

» MORE: How to start saving for retirement at Age 50

Portfolio rebalancing and diversification

Rebalance periodically to maintain your chosen allocation as markets and life circumstances change. Diversify to reduce risk:

• Active and passive: Combine actively managed mutual funds with passive ETFs and index funds.

• Industry: Spread investments across sectors to smooth out economic cycles.

• Size: Include large-cap, mid-cap and small-cap companies.

• Growth and value: Mix growth and value stocks to capture different market dynamics.

• Geography: Invest in both Singapore and global markets for broader opportunities.

No single strategy fits everyone. Blend approaches to suit your needs and consider dollar-cost averaging to build your portfolio steadily.

When putting together a retirement portfolio, there is no single template that works for everyone. Your financial situation, risk tolerance and long-term objectives will guide your decisions. Still, four universal factors deserve close attention: growth potential, income potential, capital preservation and flexibility. Balancing these elements helps ensure that your investments not only meet your day-to-day needs but also keep pace with changing market conditions over the decades.

1. Growth potential

Your portfolio should grow at a rate that outpaces inflation to protect your purchasing power over the long run. Without adequate growth, rising prices will steadily erode the real value of your savings.

For younger investors with many working years ahead, a higher allocation to growth assets such as equities, REITs or equity-focused unit trusts can be appropriate. These instruments historically provide higher returns over long periods, though they can be volatile in the short term. 

As you approach retirement, you will want to gradually reduce exposure to high-volatility assets. Shifting a portion of your portfolio into lower-risk investments such as government bonds, high-quality corporate bonds or target-date funds can help lock in gains and provide stability. 

2. Income potential

A strong retirement portfolio should also generate a steady cash flow to cover daily living expenses. This can come from dividends, bond coupon payments, rental income or annuity payouts.

Government bonds and high-grade corporate bonds provide predictable interest payments and are generally less risky. Dividend-paying stocks, REITs and certain balanced funds can offer higher yields, but their payouts are not guaranteed and may fluctuate with market conditions.

Annuities and CPF LIFE stand out for their guaranteed income, which can serve as a dependable foundation. Many retirees use a mix of these income sources to create a layered strategy—for example, relying on CPF LIFE for essential expenses and supplementing it with dividend income for discretionary spending.

3. Capital preservation

As retirement approaches, preserving the money you have worked hard to save becomes a priority. Market downturns can be particularly damaging if they occur just before or during retirement, when you have less time to recover.

Low-risk instruments, such as fixed deposits, SSBs, Treasury Bills, and high-quality government or investment-grade corporate bonds, can help safeguard your principal. While their returns are more modest compared to equities, these products offer stability and peace of mind.

Some investors adopt a “bucket strategy”, where near-term spending needs are held in cash or short-term bonds, while longer-term funds remain invested in assets with higher growth potential. This approach helps protect the capital needed for immediate expenses while maintaining a portion of the portfolio positioned for future growth.

4. Flexibility

Flexibility refers to how easily you can access or adjust your investments as your life circumstances change. Liquid assets like stocks, ETFs and SRS funds can be bought or sold quickly, giving you the ability to respond to emergencies or new opportunities.

Other products, such as private equity funds, certain insurance-linked retirement plans or long-term annuities, may lock up your money for years. Exiting early can result in penalties or losses. While these less liquid investments often offer the allure of higher returns — known as the liquidity premium — you must carefully weigh whether the potential gain is worth the reduced access to your funds.

A balanced retirement portfolio typically combines both liquid and illiquid assets. This ensures you have a reliable stream of income and growth potential while maintaining the ability to adjust your strategy if your financial needs, health or market conditions change.

Planning for retirement in Singapore requires balancing growth, income, preservation and flexibility. By diversifying across these different instruments and adjusting your strategy as you age, you can build a retirement portfolio that matches your personal goals and provides financial security well into the future.