Whenever the word “retirement” is mentioned, for some reason the magic number has always seemed to be $1 million. That has long been held up as the ultimate goal for anyone hoping to retire comfortably.
In Singapore, we often portray it as the benchmark that, once achieved, almost guarantees financial freedom and peace of mind. Just think of common $1 million references, such as the “1M65” personal finance movement that aims to get your CPF balances to $1 million by the time you’re 65.
But, given the rising cost of living in Singapore, coupled with longer life expectancy and a desire for a higher quality of life, $1 million may not be enough to retire on.
Here’s why that might be the case and how to think about the “magic number” for retirement.
Read Also: How Much You Need To Earn To Live Comfortably In Singapore
What Are Singaporeans’ Retirement Goals
Given Singapore has one of the highest GDP-per-capita figures in the world, it’s no surprise that the cost of living is high. Everything is imported and everyone in Singapore has been brought up understanding that we have no natural resources.
So, what’s actually the ideal number for Singaporeans? According to HSBC’s Affluent Investor Snapshot 2025 survey, affluent investors (i.e. those with investable assets from US$100,000 to US$2 million) in Singapore were asked how much they’d need to retire comfortably.
It found that Singaporeans expect to need about US$1.39 million (roughly S$1.8 million) to retire comfortably. This is above the survey’s global average of US$1.05 million – which is somewhat unsurprising.
Singapore’s number was also the second-highest from the countries surveyed, trailing only the US.
For many individuals here, the reality is that a comfortable retirement may require nearly double the $1 million milestone number.
But a comfortable in Singapore is not just about hitting a number. Primarily, it’s about sustaining a lifestyle that you want to live but doing it through decades of inflation, healthcare costs, and the unpredictability of stock markets.
The question then becomes “How far can $1 million really take me if I stop working at 55, or even earlier?”
Read Also: Retirement Planning In Singapore: How Much Do I Need To Save And Invest To Retire At 55?
The Reality Of An Early Retirement In Singapore
The maths becomes unviable very quickly. Imagine someone who chooses to retire at 55 with $1 million set aside. Based on the CPF LIFE payout estimator, an average Singaporean who has met the Full Retirement Sum (FRS) of $213,000 at age 55 in 2025, can expect to receive $1,730 per month from CPF LIFE but only when turning 65.
This can help meet some costs, but may not cover everything. Furthermore, it only starts at 65, and those planning to retire 10 years earlier can’t tap into those payouts until then.
If you have a $1 million nest egg that’s expected to stretch from age 55 to, say, 85, then that’s 30 years of expenses. Without investment growth, though, that’s only about $33,000 a year, or $2,750 per month. Divided between a couple, that’s $1,375 a person. According to a research on the Minimum Income Standard (MIS) in Singapore, that’s less than the $1,492 that it found a single elderly person 65 and older will need each month.
So, having a $1 million retirement pot can feel sizeable, but it leaves little room for luxuries like travel and hobbies, nor is it a very reassuring amount to combat rising medical bills, or provide a legacy that your children or grandchildren can build on.
Inflation Is The Silent Killer
Remember that inflation is the “silent killer” that eats away at your savings and your purchasing power in retirement. Even if you and your spouse are disciplined enough to spend $2,750 a month, inflation is constantly eroding your cash pile. You will quickly find that you cannot buy the same amount of things with your same $2,750 monthly retirement income.
Singapore’s average inflation rate has hovered between 2% and 3% over the long term, and in recent years we’ve seen it spike higher. What costs $2,750 a month today could require $5,000 or more a in two decades. There’s also a risk that inflation continues to remain elevated and eat away at your spending power more quickly.
A $1 million nest egg that feels sufficient today risks being inadequate when you’re still relatively young but unable to return to the workforce.
For example, at a 3% annual inflation rate, the purchasing power of your $2,750 a month income would be able to buy 55% of the goods that it can buy today.
Healthcare Is A Hidden Cost In Retirement
Healthcare is the cost that most people may underestimate when planning for an early retirement. That’s mainly because when we’re planning for retirement, we tend to be younger and healthier. Thinking about the potential for significant healthcare costs isn’t easy to imagine.
While Singapore’s healthcare system is efficient, many people may choose to go private for a more comfortable and convenient treatment – and they have to pay dearly for this option. Even with insurance, where costs can also spiral quickly, out-of-pocket expenses due to deductibles and co-insurance can be significant.
Furthermore, early retirees, who may not yet qualify for subsidies targeted at the elderly, may find themselves facing even heavier healthcare cost burdens in the first decade or two of retirement.
Private Integrated Shield Plans and riders help but remember that premiums rise sharply with age, and insurers can revise benefits whenever they feel like it. If a significant chunk of that $1 million is earmarked for healthcare contingencies, the pool for daily living significantly shrinks.
Read Also: Complete Guide To Buying A Private Integrated Shield Plan
Lifestyle Expectations Are Rising
Retirement today is not simply about quietly living off kopi and kaya toast. Many of us see it as a chance to travel more, spend time abroad, or enjoy activities they could not fit in while working. But the more ambitious the lifestyle, the faster the money runs out.
A single, long-haul dream family vacation each year could easily shave $10,000 to $20,000 off your retirement pot when you take into account accommodation, flights, spending on food and entertainment as well as other associated costs.
Even smaller luxuries like dining at nicer restaurants or buying yourself a luxury item occasionally can strain your monthly budget. This explains why surveys consistently show that younger Singaporeans are setting loftier retirement goals than the traditional $1 million.
Along with higher lifestyle expectations, we also cannot ignore longevity risk. While the average life expectancy is around 84 years today, it also means half of the people will live longer than that. We need to ensure that our retirement pot can last our lifetime, and not find out at the worst possible time, in our mid-80s that we won’t have enough.
Read Also: Only 3 Ways For Singaporeans To Have Enough For Retirement: Save More; Spend Less; And Retire Later
Plan For A Realistic Retirement Income
To hit higher retirement income targets, we need to save and invest more. The HSBC survey found that Singapore investors’ single largest allocation remains cash (at 24%), which is very high if we are serious about growing our wealth to meet our retirement goals.
Therefore, the investment rule of thumb dictates that the more risk we take on, the higher the potential reward. That means investing a larger proportion of our investable assets in global stocks – also known as equities.
By aiming to generate a conservative, average long-run return of 7% per annum (p.a.) on our equities portfolio (which is at the low end of global stocks’ average return over the past 20 years), we can better prepare ourselves for an early retirement.
Of course, there’s also the CPF cushion when we hit 65 but if we do want to think seriously about getting more money at 65 from CPF LIFE then it might be worth considering topping up your FRS to the Enhanced Retirement Sum (ERS) when you reach 55.
While the ERS is a hefty $426,000 in 2025, it does mean a potential $3,300 monthly payout for life once you reach 65. That would certainly provide a bigger cushion than the CPF LIFE monthly payout from the FRS.
Reframing The Singapore Retirement Dream
Ultimately, the $1 million retirement dream number is an outdated way to plan for retirement. While it may be enough for a group of us, for others, it may be too low, especially if we plan to retire early on. Instead of asking “How do I get to $1 million?” the better question might be “What lifestyle do I want, and how much does that lifestyle really cost over 30 years?”
For some, $1 million may indeed be enough if they live frugally, stay healthy, and supplement with CPF later. For most, though, the reality is that early retirement requires closer to double that figure, if not more.
