HOW much can you withdraw safely from your retirement savings to ensure that your funds last your lifetime? This remains a vexing question, as people live longer and are likely to spend more as they age.
There is a wealth of products to encourage people to save for retirement. But in retirement, options for a level of assured income appear mostly confined to the Central Provident Fund (CPF) Life scheme and insurance products. Both have their merits, but also have limitations.
The CPF Life scheme, for instance, pays an income for life but may replace only a fraction of your pre-retirement income. According to CPF calculations, a male member who turns 55 in 2025 will receive S$3,330 monthly when he turns 65, if he tops up his Enhanced Retirement Sum to the maximum of S$426,000. Insurance products’ payouts are typically for a term and they may also suffer bonus cuts.