Here’s a prudent retirement plan amid the latest CPF changes

CHANGES to the Central Provident Fund (CPF), announced a month ago, have sparked discussions on retirement planning in various media and finance chat groups. So how should you regard CPF Life? What should a person age 55 and older do when the Special Account (SA) closes next year for them?

These decisions cannot be taken in isolation without considering retirement planning holistically. Start with crafting a good spending plan by first listing down all your assets which can give you an income. Based on the meaningful life that you want to live, carefully estimate your expenses at different stages in retirement.

For example, in the first five years of retirement, you may need S$10,000 a month, going down to S$8,000 a month in the next five years, before reducing it to S$6,000 a month for the rest of your life. From these estimated expenses, decide what amount is absolutely necessary (essential) with the remaining amount being good to have (discretionary).