A growing number of Singaporeans are setting their sights on early retirement, aiming to achieve financial independence well before the traditional retirement age of 62. According to a recent report by CIMB Singapore and the Nanyang Centre for Marketing and Technology, 63% of respondents aspire to achieve financial freedom between the ages of 40 and 60. Interestingly, despite acknowledging the high financial requirements; over half believe more than $1 million is needed to retire early—72% still view early retirement as a realistic goal. However, only 43% feel confident about managing their finances to get there.
The study, which surveyed over 500 Singapore residents aged 26 to 60, reveals a gap between aspirations and preparedness. While 71% of respondents say they have a financial plan, less than half (48%) have actively begun planning for retirement. This disconnect may stem from several challenges unique to the Singaporean context: the high cost of living, increasing housing prices, caregiving responsibilities, and relatively stagnant wage growth for some middle-income groups.
Age and Confidence: A Generational Divide
Younger Singaporeans appear more hopeful about their financial future. Among those under 30, 60% aim to achieve financial independence before 40, and over half (54%) express confidence in their financial planning. This optimism may be driven by greater access to financial literacy resources, digital investment platforms, and the growing popularity of movements such as FIRE (Financial Independence, Retire Early).
On the other hand, older age groups report significantly lower confidence. Only 39% of those aged 40 to 50 and 43% of those between 50 and 60 feel they are managing their finances well enough to retire early. Financial anxiety is also more pronounced with age; with 47% of respondents in the 40–50 range reports feeling “often” or “always” anxious about their financial future.
The Role of CPF and Financial Literacy
Singapore’s Central Provident Fund (CPF) plays a critical role in retirement planning. However, many Singaporeans rely heavily on CPF, sometimes at the expense of developing diverse financial strategies. While CPF provides a stable and guaranteed return, it may not be sufficient alone to support early retirement, especially given rising healthcare costs and increasing life expectancy.
Moreover, the CIMB report highlights a worrying gap in financial literacy. Although tools such as savings, stocks, and insurance are commonly used for financial growth, 39% of respondents said they were unsure how effective insurance is as an investment tool. This signals a need for better financial education, especially in areas like risk management, investment diversification, and long-term planning.
A 2022 OCBC Financial Wellness Index similarly found that only 24% of Singaporeans felt on track to meet their retirement goals. Many had not calculated how much they needed, and almost half were unsure how much they could withdraw from CPF upon retirement. These insights reinforce the CIMB findings and suggest that while aspirations for early retirement are strong, the groundwork remains incomplete for many.
Cultural and Societal Pressures
Cultural factors also influence retirement planning in Singapore. Family responsibilities, such as supporting aging parents or young children, often take financial precedence. The “sandwich generation,” typically in their 30s to 50s, faces dual pressures of childcare and eldercare, which can delay saving and investing for personal retirement.
Moreover, societal expectations around property ownership, often seen as a cornerstone of financial security in Singapore – mean many prioritize home loan repayments over long-term retirement savings. While property can be a valuable asset, illiquidity may pose challenges when cash flow is needed in retirement.
Looking Ahead: Encouraging a Mindset Shift
As more Singaporeans embrace the idea of financial freedom at a younger age, there is an urgent need to bridge the gap between ambition and action. Financial institutions, policymakers, and educators have a role to play in promoting retirement planning earlier in life. This includes:
Enhancing Financial Education in Schools and Workplaces
Financial literacy should begin early, ideally in schools, where students can learn foundational concepts such as budgeting, saving, interest compounding, and risk management. Currently, while some aspects of financial literacy are included in the Ministry of Education’s curriculum under Character and Citizenship Education (CCE), there is room to introduce more practical, real-world financial scenarios and tools.
For working adults, employers can play a crucial role by offering financial wellness programs as part of employee benefits. These might include lunchtime talks, personalized consultations, or online courses covering topics like CPF optimization, investment basics, and insurance planning. Financially literate employees are less likely to experience stress about money and more likely to make sound long-term decisions, including saving for retirement.
Promoting CPF Top-ups and Voluntary Contributions
Many Singaporeans may not be aware that topping up their CPF—especially the Special Account (SA) and Retirement Account (RA)—can significantly boost retirement savings due to the attractive interest rates (up to 4–5% per annum). Voluntary contributions to CPF not only help individuals grow their nest egg but can also reduce taxable income, offering a dual benefit.
Public campaigns and workplace seminars can help raise awareness of how and when to top up CPF, and highlight tools such as the CPF Retirement Sum Topping-Up Scheme. Additionally, CPF’s online calculators and mobile apps should be promoted more actively to help individuals visualize the long-term benefits of early and consistent contributions.
Encouraging Diversified Investment Portfolios
While CPF provides a foundation, relying solely on it may not be sufficient—especially for those hoping to retire early. Singaporeans should be encouraged to build diversified investment portfolios that include a mix of asset classes such as stocks, bonds, ETFs, REITs, and even global markets. Diversification reduces risk and increases the potential for higher returns over time.
The government and financial institutions can work together to improve access to low-cost, beginner-friendly investment platforms. Initiatives such as robo-advisors, dollar-cost averaging (DCA) programs, and Regular Savings Plans (RSPs) offered by local banks are a good start. What’s needed is more education around how these work, who they’re suitable for, and how to balance them with other financial commitments.
Demystifying Insurance as a Financial Tool
Insurance is often seen only as a form of protection, but it can also play a critical role in retirement planning—especially with products like endowment plans, annuities, and investment-linked policies (ILPs). However, the CIMB report revealed that 39% of Singaporeans are unsure of insurance’s effectiveness as a growth tool, reflecting a clear need for better consumer education.
Insurers and financial advisers should prioritize transparency and simplicity in explaining policy terms, returns, and costs. Workshops or webinars comparing different insurance products—and illustrating how they fit into a broader financial strategy—can help individuals feel more confident when making long-term financial decisions.
Supporting Digital Platforms that Simplify Budgeting and Planning
Today’s digital-savvy generation has access to a wide range of financial apps and platforms that can streamline budgeting, saving, and investing. Apps like Seedly, Endowus, StashAway, and MoneyOwl in Singapore provide users with clear dashboards, goal-setting features, expense tracking, and portfolio management.
To encourage widespread adoption, these tools should be integrated into national financial literacy campaigns and made easily accessible through partnerships with banks, schools, and employers. Furthermore, enhancing mobile CPF services and creating seamless links between CPF accounts and investment platforms can empower Singaporeans to take control of their financial future with just a few clicks.
The Role of Financial Advisors in Supporting Singaporeans Toward Early Retirement
In the evolving financial landscape of Singapore, where many aspire to retire early but struggle with confidence and clarity, financial advisors play a crucial role. They are not just product providers—they are educators, strategists, and long-term partners in a person’s financial journey.
Bridging the Financial Literacy Gap
Despite access to information, many Singaporeans remain uncertain about key financial concepts such as CPF optimization, insurance planning, or the risks and returns of different investment instruments. Financial advisors are uniquely positioned to break down complex ideas into simple, actionable plans tailored to individual circumstances.
For example, they can help clients:
- Understand the nuances of CPF Life schemes
- Evaluate whether to top up their CPF SA or invest the funds
- Decide between term and whole life insurance
- Compare endowment plans versus market-based investments
Advisors also help clients avoid common pitfalls—like being underinsured or overexposed to risky assets—and empower them to make confident decisions.
Creating Personalized, Goal-Based Plans
Every individual’s journey to early retirement is different. Some may be single and focused on wealth accumulation, while others may have family responsibilities or dependents. Financial advisors assess a client’s life stage, income, lifestyle needs, risk appetite, and long-term goals to craft a realistic, customized financial roadmap.
This may include:
- Budgeting and debt management
- Setting up regular investment plans (e.g. RSPs, ETFs, ILPs)
- Choosing the right mix of retirement products
- Planning for children’s education while saving for retirement
- Mitigating risks through insurance and estate planning
Such comprehensive planning helps clients take deliberate steps toward financial independence—even if they start late.
Acting as Accountability Partners
Staying on track with financial goals requires discipline, especially over long periods. Financial advisors act as accountability partners, conducting regular reviews and helping clients adjust their plans when life circumstances change—such as a job switch, marriage, or market downturn.
They also keep clients focused on long-term goals, helping them manage emotional reactions to short-term market movements—something especially important for those aiming to retire earlier than average.
Offering Access to Financial Tools and Products
With many investment and insurance options available today, the average person may feel overwhelmed. Financial advisors serve as curators, guiding clients toward appropriate tools and platforms—from CPF-approved annuities to tax-efficient savings plans and diversified portfolios.
Advisors can also integrate technology—such as budgeting apps, digital dashboards, and risk profiling tools—into their advisory process, helping clients track their progress with clarity and convenience.
Supporting Families and Intergenerational Planning
As Singapore’s population ages and multigenerational households become more common, financial advisors are also helping families plan together. This includes helping parents support children through university while also planning for their own healthcare and retirement needs.
Some advisors now specialize in intergenerational wealth planning, which ensures financial security across three generations—something increasingly important for clients in their 40s and 50s.
While the desire for early retirement among Singaporeans is strong, especially among the younger generation, there remains a significant gap in readiness. With proper planning, improved financial literacy, and early action, the dream of retiring early can move from aspiration to reality.
Disclaimer
Every effort has been made to ensure the accuracy of the information provided, but no liability will be accepted for any loss or inconvenience caused by errors or omissions. The information and opinions presented are offered in good faith and based on sources considered reliable; however, no guarantees are made regarding their accuracy, completeness, or correctness. The author and publisher bear no responsibility for any losses or expenses arising from investment decisions made by the reader.
