SINGAPORE – As people live longer, many risk under-planning for what may prove to be lengthy retirement years, leaving them with inadequate financial resources.
“What happens if they think they are going to live 15 or 20 years in retirement, but they end up living longer?” questioned Surya Kolluri, head of the US-based think tank TIAA Institute, which specialises in longevity and retirement research.
“Will they have sufficient savings to fund the extra years? How about their health situation? What if there are extra healthcare costs?”
The latest research by the TIAA Institute and the Global Financial Literacy Excellence Center released in March 2026 showed that 32 per cent of adults in the United States underestimated their remaining lifespan at age 65.
Meanwhile, 33 per cent correctly estimated how long they would live, 13 per cent overestimated it, and 22 per cent did not know.
There is a real risk of Singapore residents outliving their savings if they only plan up to the average life expectancy at birth of 83.9, cautioned Joelle Fong, an associate professor at the Lee Kuan Yew School of Public Policy.
Retirement experts use remaining life expectancy at 65 – which is around retirement age – as a baseline to determine how long an individual’s savings must last.
According to the latest figures from the Department of Statistics, residents who reach age 65 have an average life expectancy of 86.6 years. Males live up to 84.9 years on average, and females up to 88.1 years.
A June 2026 Manulife survey found that 78 per cent of respondents here worry about outliving their money. Furthermore, 70 per cent fear they cannot afford future care needs.
Of the 1,074 Singapore respondents aged 18 and above surveyed in February and March, 46 per cent of respondents have financial responsibilities for family members.
Of this group, 62 per cent said family financial commitments impacted their ability to achieve long-term financial readiness.
Elijah Lee, senior financial services manager at PhillipCapital, said: “Retirement is not a phase in someone’s life where they can afford to make a mistake or have the time to rebuild.”
As such, Lee has adjusted his approach for his clients by planning up to age 100, to ensure they are financially prepared if they outlive average projections.
CPF retirement basics
CPF LIFE, Singapore’s national longevity insurance annuity scheme, safeguards residents against the risks of outliving their retirement savings.
Under this life annuity scheme, CPF members receive monthly payouts from their chosen start age – anytime between 65 and 70 – for as long as they live.
Premiums are deducted from their Retirement Account (RA) a week before they start receiving their first payout.
Fong noted that Singapore manages the risk of living a very long life through collective solidarity. By pooling premiums together, all residents share the risk as one large group.
“All of us are in this (national) risk pool, whether we are going to live to 120, or we are the person who survives to 70,” she said.
While CPF LIFE offers Singapore residents a safety net in retirement, some may desire a higher standard of living in retirement or worry that inflation will erode the purchasing power of their savings.
“In terms of investment of some of the CPF monies, our current options are pretty limited,” Fong said, adding that more options could be made available for CPF members to invest and grow their retirement funds.
Those who have set aside $20,000 in their Ordinary Account (OA) and $40,000 in their Special Account (SA) can invest the rest of their CPF savings under the CPF Investment Scheme (CPFIS).
OA savings can be invested in selected stocks listed on the Singapore Exchange, exchange-traded funds and unit trusts, or in insurance products like endowments, annuities and investment-linked policies.
SA funds are limited to lower-risk investments, including unit trusts and insurance products like endowments, annuities and investment-linked policies.
Target-date funds in Singapore
The CPF Board will introduce a new “life cycle” investment scheme in the first half of 2028 to complement the CPFIS.
Designed for members who lack the financial expertise or prefer not to actively manage their investments, this as-yet-unnamed scheme will offer a small selection of simplified, low-cost and diversified funds managed by two to three commercial providers.
These life-cycle or target-date funds automatically adjust investors’ asset allocation, shifting from higher-risk assets such as equities to lower-risk assets such as bonds as they grow older.
The investments will be liquidated in phases as retirement approaches, preventing CPF members from being forced to exit the markets in a downturn.
Liquidated proceeds will be transferred to the member’s Retirement Account, up to the prevailing Full Retirement Sum, with any excess flowing into the OA.
The consolidated RA funds are used to join CPF LIFE for higher, lifelong monthly payouts.
Fong said most retirement researchers, herself included, would advocate holding some target-date funds for retirement security.
Target-date funds must be actively managed by professional fund managers, which drives up underlying costs.
Fong cautioned that management fees and other fund charges can erode net returns.
To minimise costs, the CPF Board has stated on its website that “all-in fees will be capped” so investors can retain and benefit from more of their investment returns.
Furthermore, CPF members must be mindful that investment products carry risks.
The returns are not guaranteed, so members may fail to match or beat the baseline interest rates of 2.5 per cent on the OA and 4 per cent on the SA.
CPF members who are averse to market volatility can continue to keep their savings in the CPF accounts to earn the risk-free rates.
They can consider making cash top-ups or transferring OA savings to their higher-yielding SA, instead of investing the money, to boost their CPF LIFE monthly payouts.
In the US, target-date funds have evolved to build lifetime annuities into fund structures as people are living longer.
With a portion of the fixed-income allocation replaced with an annuity, investors’ portfolios comprise equities, bonds and an annuity by the time they retire.
In Singapore’s context, this lifetime income security is already built into the system through CPF LIFE.
Retirement beyond dollars and cents
Beyond building a solid nest egg, people will have to think about what they want to do with their longer lives.
PhillipCapital’s Lee asked: “What gives you meaning? What gives you purpose?”
For some, the answer involves staying active in the workforce.
This can give them purpose, Lee said, recalling: “My dad started declining after retiring from taxi driving because he had nothing to do or look forward to.”
As Singaporeans face the prospect of longer lives, financial readiness is only part of the puzzle.
“Over and above ensuring sufficient resources, we also need to keep ourselves active with activities to lead a meaningful retirement,” Lee shared.
