Retirement checklist by age

Financial planning for retirement is a journey that evolves with each stage of life. From Central Provident Fund (CPF) contributions to healthcare planning, we break down retirement planning into simple, age-specific steps. 

By the end, you'll have a clear checklist to help you feel confident and ready for retirement in Singapore. 

Takeaways

Your 20s: The earlier you save, the more your money grows over time. Tools like CPF contributions can help build a strong foundation.

Your 30s and 40s: Focus on growing your savings while managing other priorities, like family and healthcare.

Your 50s: As you get closer to retirement, consider a shift to safer investments and plan for rising healthcare costs.

Your 60s: CPF LIFE and the Supplementary Retirement Scheme (SRS) can be used to ensure steady income and tax savings in retirement.

Your 20s are the best time to start building a strong financial future. Since you have plenty of time ahead, even small, steady efforts now can grow into big rewards later.

Here's how you can begin:

Create a financial action plan

Work out a monthly budget to understand how much you can save. Make saving a part of your plan by setting aside some of your income before spending on non-essential things.

Build an emergency fund

Set aside 3 to 6 months' worth of expenses in an emergency fund. This ensures you're financially prepared for unexpected situations, so you won't have to dip into your retirement savings.

Start saving early with CPF contributions

Time is your greatest ally when it comes to saving and investing. Even small, regular contributions to your CPF or savings account can grow significantly over time thanks to compound interest. For example, if you save SGD200 a month starting at age 25, you could have over SGD100,000 by age 65, assuming a 4% annual return. See CPF FAQs for up-to-date CPF interest rates.

Explore investment options

Your 20s are a good time to consider higher-risk investments, like unit trusts or Exchange Traded Funds (ETFs). Starting with government bonds or fixed deposits is safe, but since you have a long time to invest, you can handle market ups and downs and grow your money through compounding.

Your 30s are a time when both your career and personal life grow. You might be earning more, but you also have more financial responsibilities. 

Here's how to plan for retirement effectively in your 30s:

Boost your CPF contributions

Take advantage of your CPF account by increasing contributions. Consider transferring funds from your Ordinary Account to your Special Account to accelerate growth. Growing your Special Account early is a smart strategy, as it benefits from high interest rates and tax relief opportunities.

For more details, visit the CPF Retirement Income page.

Diversify your investments

At this age, you can take a balanced approach to retirement planning. Diversification helps manage risk while maximising potential rewards, keeping your portfolio aligned with your long-term goals. For example, you might diversify by investing in real estate or dividend stocks.

With the HSBC Wealth Dashboard, you can manage your investment portfolio and build your wealth at any time. You need to be registered for HSBC Online Banking to access the Wealth Dashboard.

Explore the idea of 'mini' and 'multi retirement'

A mini retirement is a longer career break, lasting months or years, to travel, spend time with family, pursue hobbies, or learn new skills. It often leads to life-changing shifts, like a new career or outlook. Multi retirement is the practice of taking multiple mini retirements throughout your life.

If you're an investor in your 30s, this means planning your finances to support these breaks while still growing your wealth. It’s about balancing short-term enjoyment with long-term financial security.

As you enter your 40s, retirement planning becomes more urgent. Beyond the basics of saving and investing, here are 3 things to address:

Maximise your CPF contributions

You'll get good interest rates with your CPF Special Account – up to 6% per year – helping your retirement savings grow faster. You can add extra money to your account to boost savings and get tax benefits. This is especially helpful as you get closer to joining the Lifelong Income For the Elderly (CPF LIFE) scheme, which gives you monthly payouts for life.

Balance competing financial priorities

In your 40s, you may find yourself part of the 'sandwich generation', supporting elderly parents and children. It's essential to strike a balance between these responsibilities and your own retirement savings. Use tools like the 50-30-20 budgeting rule to allocate funds effectively.

Protect your income and assets

It's important to protect your income and savings as you reach your peak earning years. Safeguard your finances with insurance like HSBC Singapore's life, health, and critical illness plans to cover emergencies.

You should also plan how your assets will be passed on. Update your CPF nomination and create a will to ensure your savings and assets go to the right people. These steps protect your family and secure your future. After these steps, it's time to ask yourself, how much do you need to retire at 50, and adjust your plans accordingly.

Your 50s are the time to shift your focus from growing wealth to preserving it.

When you turn 55 in Singapore, a new Retirement Account will be automatically created for you, and your Special Account will close. After saving your Full Retirement Sum (FRS), you can withdraw any extra savings from your Ordinary Account. The FRS is the amount you need to save, and it depends on the year you turn 55. Once it's set, it stays the same for the rest of your life.

Shift to safer investments

As you approach retirement, consider moving your portfolio toward lower-risk options like bonds or HSBC Life Savings Protector plans. These investments help protect your savings while providing steady returns.

Be smart about taxes you'll pay in retirement

In Singapore, CPF LIFE payouts are tax-free, providing steady retirement income. Other income, like private annuities, may be taxed. The Supplementary Retirement Scheme (SRS) helps you save more with tax-deductible contributions and partially taxed withdrawals after retirement. 

Plan for rising healthcare costs

Healthcare expenses are a big concern for Singaporeans, especially with longer life expectancies. Review your insurance coverage and consider upgrading to plans like the Singapore government's CareShield Life for long-term care. With good healthcare coverage now, you can avoid financial stress later.

As you enter your 60s, it's time to transition from accumulating wealth to managing it wisely. This is the decade to make sure your financial plans support a secure and fulfilling retirement.

Here's what you could do in your 60s:

Reassess your retirement goals

Take a closer look at your retirement plans and calculate how much you'll need to retire comfortably in Singapore. Use tools like the HSBC legacy planning calculator to evaluate your progress and identify any gaps in your savings. 

Stay engaged with semi-retirement

More and more people are enjoying 'semi-retirement' as the best of both worlds. It can keep you physically and mentally active while also giving the all-important social element that work can bring. 

Plan your legacy

Planning your legacy ensures your wealth is distributed according to your wishes while supporting your family's future. HSBC Singapore offers solutions like trusts, insurance, and inheritance planning to help you manage wealth transfer effectively.

For more details, visit HSBC Singapore's legacy planning page.