I want to start with someone I call Linda, because I think you may recognise her.
She is 55. She works hard, saves diligently, and she does not like investing. In fact, she has tried her hand at some stocks and investment funds but often got it wrong. Markets are volatile, she says, and she is not wrong. Hence, she keeps a large buffer in the bank, just in case. Ask her how she feels about retirement, and she will tell you she is not too worried. She has her CPF. She has her savings. She is still working. She should be all right, but she is just unsure.
As a practitioner in retirement planning, I have learned that the difference between feeling all right and being prepared is significant. So, I want to walk you through a real planning exercise we did for Linda. Her name is not real, of course, but her numbers are relatable.
What Linda Has Done
Linda earns $10,000 a month and takes home $8,400 after CPF. She spends $6,400 and saves $2,000, which is a healthy savings rate of 20% of her gross income. She is planning to work another ten years before she retires at 65.
Here is something I have seen too often. Linda's emergency fund could cover 89 months of living expenses. Not 6 months but 89. Almost 7.5 years of spending, sitting in cash, just in case.
Many of us grew up watching our parents do something similar, keeping money in the bank because it is safe, cash is king. It is not a bad instinct, and it comes from financial discipline, but having too much sitting idle is not making her money work harder. A healthy emergency fund is 3 to 6 months of expenses.
| Financial health check | Linda's score | Analysis |
|---|---|---|
| Emergency fund | 89 months | Healthy but excessive |
| Debt to asset | Nil | Healthy |
| Debt servicing | Nil | Healthy |
| Savings rate | 20% | Healthy |
What Linda's Retirement Actually Costs
Before explaining what we did for Linda, I want to show you what her own retirement goal requires.
Linda wants to spend $5,300 a month in retirement. It is about 83% of what she spends today, which is realistic since some expenses fall away once she stops working.
But Linda is not retiring today. She is retiring in ten years, and she plans to provide for another 25 years till age 90. With 2% annual inflation,1 her retirement needs increase substantially. By 65, that same lifestyle would cost $6,460 a month. By 90, it costs $10,600.
Three Ways Forward
With Linda's actual numbers in front of us, we mapped out three paths.
Path 1: Do nothing
Linda's CPF-RA (Retirement Account) is already at the Full Retirement Sum (FRS). From 65, CPF LIFE alone pays her $1,640 a month, for life. The rest of her income comes from drawing down cash and her CPF-OA (Ordinary Account), starting at $4,820 a month ($6,460 minus $1,640), and this amount keeps growing each year just to keep pace with inflation. It works for a while, but her cash only lasts till age 87. Three years short of the 90 she is planning for.
Path 2: Max out CPF
We are very upfront about this at Havend: CPF LIFE is the best annuity in Singapore in terms of payout for life for every dollar of premium, nothing beats it. It is also backed by the government. So a natural instinct is to put as much into it as you can. Topping up Linda's CPF-RA to the Enhanced Retirement Sum (ERS) lifts her CPF LIFE payout to $3,180 a month.2 It buys her two more years than doing nothing. But her money still lasts till age 89. One year short.
Path 3: RetireSURE
Instead of choosing between holding cash and committing everything to CPF, we used both, and added a third source of income alongside them.
What We Actually Did
The first thing we did not do was ask Linda to spend less or save more. She was already disciplined. A better way for her is to optimise what she already has.
We started with the oversized emergency fund, which consists of $570,000 in cash and CPF-OA. After setting aside six months' worth of emergency fund ($38,000), Linda still has $532,000 remaining, of which we deploy about half the amount ($270,000) for planning.
First, we topped up her CPF-RA by $170,000. This amount sits between FRS and ERS. It is a calculated point. CPF is powerful, but once committed, it cannot be surrendered or reversed, so we always weigh that strength against its illiquidity before deciding how much to put in. This lifted her CPF LIFE payout to $2,840 a month.
Second, we added an insurance annuity with a $100,000 single premium, topped up by $12,000 a year for ten years. This gave Linda another stream of income: $614 a month from 65, stepping up to $1,538 a month from 71 onwards.
With the three working together, CPF LIFE, the annuity plans, and a smaller but better-managed cash drawdown, Linda's retirement income can last till age 90, meeting her goal.
Why We Still Believe in Insurance Annuities
As I mentioned earlier, CPF LIFE is the best annuity, but why do we still recommend anything else?
Not because CPF LIFE is lacking. It is because CPF LIFE, once committed, cannot be surrendered, except in cases of severely shortened life expectancy. An insurance annuity does not carry that same rigidity. Here is how CPF LIFE compares with retirement income plans in more detail.
If Linda's circumstances changed, such as a medical need, a family emergency or simply a change of heart, she could surrender her annuity anytime. If she does so, say, at age 75, she could get back $150,000, guaranteed. It is an option within the plan in case life does not go exactly as expected.
There Is Still Room to Go Further
Even after all this, Linda's plan only put about half of that idle cash to work. There is more room for exploration. She could make future plans to leave a larger bequest for her loved ones, or simply to allow her to be more generous to herself or others instead of holding it back.
We did not push her to use all of it. Not everyone needs to optimise every last dollar, and there is real value in a buffer to give her options for other things she can consider in the future.
What I Would Want You to Take From This
I do not think Linda did anything wrong. Saving diligently, staying wary of markets, keeping a large buffer are the instincts of someone who takes her future seriously, and I respect that.
But good instincts are not the same as a coordinated plan. It was only once we looked at her cashflow, her CPF, and her insurance together, as one picture, that she had the assurance of income certainty for her retirement.
If any part of Linda's story sounded familiar to you: the healthy but oversized emergency fund, the CPF you have never quite run the numbers on, the retirement figure you are quietly hoping is "probably enough". Those are the three things a RetireSURE Assessment starts with.
Where RetireSURE Fits In
Linda's plan did not start with a product. It started with her own numbers. That is the thinking behind RetireSURE, Havend's structured retirement planning service, which looks at retirement through our 3Cs framework: Cashflow Management, Coverage, and Certainty of Income.
In practical terms, that means understanding how much you need to spend in retirement, how much of that is already met by CPF, how much more needs to be secured to cover your essential expenses for life, and whether your medical and long-term care coverage can absorb a health event without it reaching your retirement income. We have written separately about three ways to structure retirement income.
RetireSURE looks at your Cashflow, Coverage and Certainty of Income (the 3 Cs) before any product conversation, so your retirement income is locked in with the highest probability of success, without relying on investments. Want an honest look at your own numbers? Reach out for our RetireSURE Assessment:
Book a RetireSURE Assessment| 1 | 2% is used here as a long-term planning assumption, in line with Singapore's long-run average core inflation. It is a planning assumption rather than a forecast. Havend Pte Ltd, The CPF Playbook: A Holistic Guide to Using CPF for Retirement, 2026. Download the CPF Playbook. |
| 2 | CPF LIFE payout figures are estimates for Linda's cohort and will vary with the year a member turns 55, the amount set aside, and the CPF LIFE plan selected. Use the CPF LIFE Payout Estimator for your own figures. |