5 types of retirement income every Singaporean should have

Picture this: it’s your 65th birthday. You’ve spent decades working hard, raising a family, and saving diligently. You step into the next chapter of life hoping to relax, travel, and pursue hobbies. But a quiet concern lingers: will my money last?

For many Singaporeans, this concern is very real. Research by OCBC shows that nearly 60% of Singaporeans aged 55 and above feel CPF alone may not be sufficient for a comfortable retirement. When rising healthcare costs, inflation, and lifestyle aspirations are added to the mix, relying on a single income source becomes increasingly risky.

The solution lies in diversifying retirement income. Instead of depending on CPF alone, Singaporeans can structure their finances so multiple income streams work together to provide stability, flexibility, and peace of mind.

Here’s how that works in real life.

1. CPF LIFE payouts: the reliable foundation

Mr Tan, 65, has accumulated close to the Full Retirement Sum (about $161,000 in 2016: the year he turned 55). Under CPF LIFE, he receives approximately $1,200–$1,300 per month, depending on the plan he chooses. This guaranteed income forms the backbone of his retirement, covering daily essentials such as food, utilities, and basic living expenses.

Why it matters

• CPF LIFE protects against longevity risk, ensuring payouts last for life.
• Members can choose from Standard, Basic, or Escalating plans, depending on income needs and inflation concerns.
• Payouts are government-backed, providing stability regardless of market conditions.

Real-world insight

According to data from the CPF Board, retirees on the Escalating Plan enjoy payout increases of about 2% annually, helping preserve purchasing power over time.

CPF LIFE may not fund every lifestyle goal, but it provides a dependable base that allows retirees to build additional income streams with confidence.

2. Personal savings:  your liquid safety net

Mrs Lim, 62, keeps about 12 months of living expenses in a readily accessible savings account. When her air-conditioning unit breaks down during a hot Singapore summer, she pays for the replacement immediately without touching investments or long-term income plans.

Why it matters

• Liquid savings prevent retirees from selling investments during market downturns.
• Most financial planners recommend 6–12 months of expenses in accessible cash.
• Savings provide flexibility for healthcare costs, family needs, or spontaneous lifestyle choices.

Practical insight

Local retirement planning studies and adviser experience consistently show that retirees with adequate emergency savings experience lower financial stress and greater confidence in managing unexpected expenses.

Personal savings may not deliver high returns, but they act as the buffer between comfort and crisis.

3. Investment income: strategic growth and flexibility

Mr and Mrs Ong, both in their late 50s, hold about $150,000 in a diversified portfolio of ETFs and bonds. Their investments generate roughly 4% annually, providing about $500 per month to cover groceries and utilities, while CPF payouts remain untouched for larger lifestyle goals.

Why it matters

• Investments help retirees outpace inflation over long periods.
• They provide a flexible income stream that can be adjusted over time.
• Diversified portfolios reduce reliance on any single asset class.

Evidence-based perspective

Over full market cycles, Singapore equity markets have historically delivered mid- to high-single-digit annualised returns, supporting long-term income generation when managed prudently.

Investment income gives retirees optionality allowing them to enjoy discretionary spending without eroding core retirement capital.

4. Annuities: predictable income top-ups for later life

Ms Wong, 60, sets aside part of her savings to purchase a deferred income annuity. The plan begins paying around $300 per month from age 70, supplementing her CPF and investment income.

Why it matters

• Annuities provide guaranteed payouts, independent of market performance.
• Deferred annuities are ideal for late-retirement healthcare and longevity needs.
• They reduce the risk of outliving accumulated savings.

Industry insight

According to the Life Insurance Association Singapore, demand for deferred income annuities has risen steadily over the past few years, reflecting retirees’ desire for predictable, lifelong income.

Even a moderate premium (e.g. ~$50,000) can meaningfully enhance monthly retirement income without investment risk.

5. Property and rental income: lifestyle flexibility

The Cheong family continues living in their 4-room HDB flat and rents out two spare bedrooms, generating about $1,500 per month. This rental income funds travel, hobbies, and family activities without relying solely on CPF LIFE payouts.

Why it matters

• Rental income provides relatively stable cash flow.
• It allows retirees to unlock housing value without selling their home.
• Income can be channelled toward lifestyle goals rather than necessities.

Market context

Recent HDB rental statistics indicate gross rental yields of about 4–5% in mature estates, making property a meaningful supplemental income source for eligible homeowners.

Bringing it all together

A diversified retirement income portfolio for a typical Singaporean couple at 65 might look like this:

Key takeaways

• Diversification is critical: No single income source is sufficient on its own.
• Blend guarantees with growth: CPF LIFE and annuities provide stability; investments and property add flexibility.
• Plan for uncertainty: Liquid savings protect against unexpected expenses.
• Review regularly: Retirement strategies should evolve with life stages and market conditions.

Retirement is not just about having money, it is about building income streams that work together. With the right structure, Singaporeans can replace uncertainty with confidence and turn retirement into a stage of life defined by choice, comfort, and freedom.