So there was an article in the papers a few weeks back that said a $3,000,000 portfolio is needed for retirement. That seems daunting. Scary. Seemingly beyond the possible.
I presume that magic number was derived based on a need to generate $120,000 per year for 4% extraction from the $3,000,000 portfolio.
But this can be reduced significantly for a Singaporean couple who can max out their CPF accounts. If both husband and wife (assuming of same age) can meet the Enhanced Retirement Sum ($250,000 to $275,000), they can collectively generate close to $50,000 per year from age 65 from CPF LIFE payouts (CPF LIFE Estimator).
That being the case, the investment portfolio will only need to generate the remaining shortfall of $70,000 per year. That means a portfolio of $1,750,000. Seems far less daunting.
So all in, that is a combined investment portfolio of $1,750,000 investment portfolio, plus $250,000-$275,000 each in CPF-SA account. More do-able?
For more info on CPF LIFE: How much CPF LIFE payout will I receive?
p/s: Ok ok, so if you math it up, it should be $2,250,000 to $2,300,000 in terms of net asset value.