How to Start Planning For Retirement in Your 20s and 30s

How can millennials and Gen Zs start planning for retirement? Here are a few early retirement planning tips that may help you.

Priscilla Lee

by Priscilla Lee on Feb 22, 2024

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Planning for retirement in your 20s or 30s may sound early, but if you consider the soaring inflation in Singapore, starting your legacy planning in advance is no longer good to have but a must.

Based on 2023’s 4.8% inflation rate, a bowl of fishball noodle priced at S$5 now can easily cost you a whopping S$20.40 in 30 years. This means the amount you perceive as a nest egg enough for retirement may have to multiply by a few times in 30 years. If this is not a red alert to nudge you to start saving early for retirement, what is?

A quick look at Singapore’s consumer index over the past 20 years may offer more insight into the escalating prices of your everyday expenses:


Related: Is It Enough to Retire with S$6,000 In Monthly Expenses Given The Current Inflation Rate?

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FIRE Movement — Why More Young People to Want Early Retirement

Since the 2010s, the Financial Independence, Retire Early (FIRE) movement has been motivating millennials and the Generation Zs to revitalise their lifestyle to gain financial independence for early retirement. The movement first originated from the best-selling book Your Money or Your Life by Vicki Robin and Joe Dominguez, and Early Retirement Extreme by Jacob Lund Fisker. The ‘FIRE retirement planning tips’ eventually gained popularity via online communities and social media.

Young people like the millennials and Gen Zs desire a flexible lifestyle that allows them to prioritise personal experiences and fulfilment. Financial independence and early retirement naturally mean escaping financial stress and enjoy their passions and self-actualisation at a faster pace.

Unlike the older generations who are constantly worried about the cost of living in Singapore and used to working long and hard to build wealth, the younger ones are used to instant gratification. They are more willing to leverage the FIRE tips defined by frugality, extreme savings and investment to fast-track their retirement goals. The abundance of tech-enabled channels also allows them to reap more opportunities like remote work, online businesses and investing to accumulate their nest egg in a shorter timeline.

Related: Retiring With S$6,000 Monthly: How Much Do I Need to Earn Now?

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How Much Do You Need To Retire in Singapore

If you are a millennial or a Gen Z who wants early retirement before Singapore’s official retirement age of 63 years old, there are a few retirement planning tips that may help you achieve that goal. But before you start calculating, you must first ask yourself what kind of lifestyle you want to have at retirement and how much monthly expenses you may incur.

According to a 2019 study, a retired person aged 65 needs an estimate of S$1,379 a month or S$16,548 per year, to sustain a basic standard of living. Bear in the mind this sum does not include random expenses like vacations, healthcare and hobbies. With inflation, this amount will definitely increase significantly over time too.

Assuming you are 25 years old, how much do you think you will need to retire in Singapore at 50? In Singapore, the average inflation rate is 2.6% per year. This implies that your basic yearly expenses at retirement will easily come up to S$31,436 per annum in 25 years. Given that the average Singaporean’s life expectancy is 84 years, you will need to have at least S$1,068,824 set aside by the time you hit 50. This amount is a close estimate to a 2021 survey conducted by Fullerton Fund Management which found that Singaporeans’ desired retirement will require S$1.4 million.

Of course, the numbers can increase according to your preferred retirement lifestyle. If you want to have a few vacations a year and live your life to the fullest with active socialising, you must be prepared to set aside higher reserves.

Related: Key Lessons From the FIRE Movement Everyone Can Benefit From

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Grants To Consider When Planning for Retirement

The government understands how the rising cost of living in Singapore can affect retirement planning, hence many grants and subsidies have been introduced to help retirees manage their finances. Here are some government schemes that you may want to take into consideration while planning for early retirement.

ComCare Long Term Assistance (LTA)

Under this programme, seniors can obtain long-term monthly cash assistance ranging from S$640 to S$1940 if they are unable to work due to old age, illness or disability or have inadequate family support or savings to rely on for daily needs. Medical expenses assistance at public healthcare institutions and free or highly subsidised social support services are also part of the programme.

Refer to a Social Service Office for information.

Enhancement for Active Seniors (EASE)

This programme was introduced in 2012 as part of Housing Development Board’s (HDB) Home Improvement Programme (HIP). Seniors can enjoy subsidies of up to 95% to install improvement items such as grab bars and slip-resistant bathroom floors to make their homes more elderly-friendly.

Refer to HDB for more information.

Lease Buyback Scheme (LBS)

This is another HDB programme to assist seniors who live in a 4-room or smaller flat to sell part of their flat’s lease back to HDB to receive a stream of income during their retirement years while still living in it. The proceeds will be used to top up their CPF Retirement Account (RA) to join CPF LIFE, which will provide seniors with a monthly income for life.

Refer to HDB for more information.

Majulah Package

This was first announced at the 2023 National Day Rally and it comprises three Central Provident Fund (CPF) top ups for those born in 1973 or earlier. The first is the Earn and Save Bonus which is a S$1,000 per year CPF funds top up. Second is a one-time S$1,500 Retirement Savings Bonus for those who have not met the CPF Basic Retirement Sum. The third component is a one-time MediSave Bonus of up to S$1,000.

Refer to CPF for information.

Seniors’ Mobility and Enabling Fund

This scheme is offered by Agency for Integrated Care (AIC) to seniors who require mobility and assistive devices for daily independent living and to remain ambulant in the community. The government will also provide funded home care and healthcare items. Subsidies will also be provided for purchase of catheters, milk supplements, thickeners, adult diapers, nasal tubing and wound dressings.

Refer to AIC for information.

Silver Support Scheme

The Silver Support Scheme offers seniors aged 65 and above with low incomes during their working years and now have less in their retirement cash supplements a cash benefit of S$360 to S$900 every quarter. The amount depends on the type of HDB flat they live in.

Refer to CPF for information.

Related: Guide To Retirement Planning in Singapore


Early retirement means you must be extremely disciplined in saving, investing and extra mindful of your spending. To ensure you can meet your financial goals, having a savings account that offers a generous interest rate and an online broker that you can let you trade efficiently will be more important than ever.

Check out the list of best savings accounts and best online brokerages in Singapore. The information will enable you to make informed decisions when selecting the right savings account and online broker to grow your finances.

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