This may the golden number to receive after retirement and while ambitious, it isn’t impossible. We’ve done up the numbers to help you grasp this challenge.


Many Singaporeans aspire to get $3,000 a month after retirement. Singapore’s median gross monthly income, as of 2016, is $4,056.  So $3,000 a month represents, more or less, an income replacement level just above 70 per cent. This is ambitious, but not impossible. Here is how much you may need to invest, to get this amount:

Using the four percent rule

Before we understand how to get $3,000 a month at retirement, we need to look at a common rule of thumb.

The four percent rule is a guideline, often used to plan retirement. This guideline states that your retirement fund should last to the end of your life, if you withdraw no more than four per cent from it every year.

This is based on a study by financial adviser William Bengen in 1994, in which portfolios of stocks and bonds were studied over a 50-year period. This 50-year period was between 1926 and 1976, and were especially disruptive years (many stock market crashes and rallies happened in this time, as well as World War II).

The study concluded that, if only four per cent of the retirement fund is withdrawn every year, then the retirement fund will not fail to last at least 30 years.

As such, let’s assume that the $3,000 you get every month ($36,000 a year) will have to constitute four per cent of your total retirement fund.


We are aware that not every financial adviser considers the four per cent rule accurate. We have listed some contingencies below. Each person’s financial needs differ, and as such no rule of thumb can be 100 percent accurate. The four percent rule should be taken as a guideline only, and not as a fixed rule.

For more precise financial planning, you can speak to one of our retirement experts at RAY ALLIANCE Financial Advisers. Alternatively, check out our financial planning wizard at, which will can also identify insurance policies that can help you reach your financial goals.

How much do you need at retirement then?

Assuming $36,000 a year is four per cent of your total retirement fund, you will need $900,000 in total by the time you retire. However, things get a bit more complicated due to inflation.

In 20 or 30 years, the value of $900,000 today will be much less. This is because the cost of living increases every year, as the economy grows. In Singapore, and most developed countries, you can count on the rate of inflation being about three per cent per annum.

Let’s say you are 35 years old this year, and will retire at age 65. In 30 years, the value of $900,000 today is just around $370,788*.

In order to have the same purchasing power as $900,000 today, in 30 years time, the amount you will need is actually closer to a whopping $2.18 million.

Now again, this is not exact – it will depend heavily on the make-up of your portfolio, and on the state of the economy in 30 years (which no one can predict).

*Amount / (1+inflation rate)^number years

** Amount x (1+inflation rate)^number years

Some contingencies to consider

Some assumptions are also being made regarding your portfolio. For example, it’s assumed that you will have a mix of assets that provide a constant stream of income; examples can range from perpetual income bonds to a house that you rent out.

If your assets that don’t provide any steady income (e.g. gold bars), then you will have to sell them off for money. This will mean you need even more at retirement, as your assets do not generate any income to slow the rate at which you deplete them.

Speak to a wealth manager or financial adviser for more details on what to put in your retirement portfolio, or follow us on Facebook.

How can I possibly make that much money?

It is not impossible to have $2.18 million in assets at retirement (remember, you don’t necessarily need all this in cash – renting out the flat you have, or downsizing your home, can all contribute to your retirement fund). However, it isn’t easy either – you’ll have to be a disciplined saver.

For example, if you can save 30 percent of your monthly paycheck (say you make around $4,000), and grow it at five per cent per annum, you will get just over a million dollars over 29 years. Remember that your CPF Special Account (CPF SA) already gives an absolute return of  4 percent per annum.

However, you will also need to supplement your CPF with other financial products, and even a little bit of side-income can help. There are insurance policies that can further grow your wealth (in some instances with returns as high as seven to nine per cent), as well as various funds you can consider.

For more details, you can contact one of our experts to customise a financial solution for you. Alternatively, use our online wizard to browse for more options.


Share this page:
Share on Facebook
Share on LinkedIn