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Diversifying Your Income Sources: Why It Is Important To Build Multiple Income Streams For Your Retirement

Build a margin of safety with multiple income sources.

Growing a retirement nest egg

This article was written in collaboration with abrdn. All views expressed in this article are the independent opinion of based on our research. is not liable for any financial losses that may arise from any transactions and readers are encouraged to do their own due diligence. You can view our full editorial policy here.

Retirement is a major financial milestone where we transition from earning an active income from work to relying on a passive income from our investments and via CPF LIFE.

As retirement can mean different things to each of us, we need to diligently plan ahead. Some of us may wish for an active retirement involving recreational activities, maintaining a comfortable living space and going on holidays. Others may prefer an early retirement underpinned by a simple lifestyle.

Regardless of our wishes or unique circumstances, we can take steps to secure our retirement by building multiple income streams during our most financially vulnerable years. This can include our national annuity scheme, CPF LIFE, monetising our home as well as income investing.

Strengthening Our CPF LIFE Payouts

The foundation of any retirement income plan in Singapore is our CPF LIFE payouts. Providing lifelong monthly payouts from the age of 65, CPF LIFE forms our national annuity scheme.

One of the biggest benefits of the CPF LIFE scheme is that we will receive monthly payouts for as long as we live – reducing longevity risk (i.e. the risk that we outlive our CPF savings).

We can also boost our CPF LIFE payouts by saving more in our Special Account or Retirement Account – beyond mandatory CPF contributions from our monthly salary. When we make these top-ups, via the Retirement Sum Topping-Up (RSTU) Scheme, we also stand to enjoy a dollar-for-dollar tax relief of up to $8,000 a year.

While CPF LIFE is central to our retirement income strategy, it can also be financially prudent to build multiple retirement income streams.

Planning For Our Ideal Retirement Lifestyle

Average Singaporeans can expect to live up to a ripe old age of 83-years-old. Coupled with the Government’s focus on flexible work arrangements and lifelong learning, we have more freedom to take on meaningful work into our senior years. This can engage seniors in economically valuable contributions and help supplement our retirement income.

Monetising our largest financial asset – our home – can also bolster our spending power. We can rent spare bedrooms for rental income or rightsize to a smaller flat and potentially also benefit from government schemes such as the Silver Housing Bonus (SHB).

HDB owners have a third option via the Lease Buyback scheme – where we can sell part of our remaining lease to the government and use the proceeds to top-up our Retirement Account to beef up our CPF LIFE payouts.

To ensure that these options, i.e. working longer and monetising our homes, are a choice rather than a necessity to get by in our retirement, we can consider investing in a diversified income portfolio.

Read Also: Building A Healthy Investment Portfolio: How You Also Need Discipline, Stamina and Resilience

Income Investing: Ensuring Stability, Enjoying A Growth Opportunity

Many of us may not have the time, interest or expertise to build an investment portfolio that can provide consistent payouts over a long horizon. That’s why income investing can be an enriching process – with the hard work of navigating market cycles and picking high-quality dividend-paying companies managed by professionals.

For example, we can invest in abrdn’s Global Dynamic Dividend Fund to gain exposure to high-quality global equities. This gives us a two-pronged approach to build our retirement adequacy.


While, we gain an exposure to high-growth sectors such as the Information Technology (IT), Financials, and Health Care, the underlying investments are diversified across some of the biggest companies such as Microsoft, Apple, Broadcom and  Alphabet1. Collectively, the underlying investments within abrdn’s Global Dynamic Dividend Fund provide an average payout of 6.3% p.a.5

abrdn Global Dynamic Dividend Fund

Source: abrdn – Global Dynamic Dividend Fund

We can also strive to diversify our portfolio of income investments. abrdn’s Diversified Income Fund invests in equities, fixed income and multi-asset investments in listed alternatives that may be harder to access for individual investors. Additionally, listed alternatives such as real estate, infrastructure and special opportunities can provide genuine diversification – and thus, reduce our overall portfolio correlation.

Access the key asset classes


abrdn Diversified Income Fund (DIF)

Source: abrdn – Diversified Income Fund


The Diversified Income Fund not only provides a stable monthly income of approximately 5.0%3, its volatility is also typically ~50% less than equities4.

abrdn Diversified Income Fund

Source: abrdn – Diversified Income Fund


Living A Fulfilling Retirement On Your Terms

Retirement does not have to be just about financial security. It’s also about pursuing passions, hobbies, and personal goals.

Building a resilient financial foundation can provide not only the retirement lifestyle we aspire to live, but also a peace of mind that money cannot buy – especially in an increasingly uncertain world.

Underpinned by multiple income streams, we have a margin of safety. When one income stream dries up or is underperforming, others can continue to provide a payout – acting as stabilisers for a resilient retirement income portfolio.

Beyond empowering us with the financial freedom to explore our interests, we can enjoy our retirement years with confidence and security – without having to stress over depleting our retirement nest egg prematurely.

Find out how to start building multiple income streams for your retirement with a simple game, to Be an Income Champion, and stand to win a prize from abrdn.

This advertisement has not been reviewed by the Monetary Authority of Singapore.

1 Companies selected for illustrative purposes only to demonstrate the investment management style described herein and not as an investment recommendation or indication of future performance.

2 Cash deposits are measured by US Secured Overnight Financing Rate (‘’SOFR‘’). Return objective is gross of annual management charge. This is an internal performance target which the Investment Manager aims to achieve as at the date of this document. This target is not based on past performance, may be subject to change and cannot be guaranteed. Investors should always refer to the investment objective and restrictions as stated in the latest prospectus.

3 Source: abrdn, 30 September 2023. Based on annualized yield of A MInc USD share class, historical average over October 2022 to September 2023. Annualised Yield = (Dividend per share/Price (ex-dividend)) x 12 (months) x 100%. Aims at monthly distribution. Dividends are not guaranteed and may be paid out of investment income, capital gains or capital at the discretion of the Board of Directors. Any dividends paid and distributed out of the Fund’s capital will result in an immediate reduction of the Fund’s Net Asset Value per share. Past dividends are not a guide to future dividends.

4 Source: abrdn, 30 September 2023.

5 Source: abrdn, 29 Feb 2024, based on A Gross MIncA USD share class offered in Singapore as a MAS recognised scheme, historical average over March 2023 to February 2024. Aims at monthly distribution. Dividend rate is not guaranteed. Dividend may be paid out of capital. Past dividends is not a guide to future dividends.