Most people think retirement planning is about saving enough. But the truth is more nuanced. Singlife’s Financial Freedom Index found that 71% of Singaporeans aren’t confident they can retire when they want, with having enough for retirement ranked as one of their biggest financial stressors¹. A 2025 Fidelity report adds to this, showing that 42% of Singaporeans expect to outlive their retirement savings².

This gap isn’t from a lack of saving. It’s driven by rising costs, longer lifespans and lifestyle goals that sit beyond basic needs. Inflation creeps up each year, healthcare and long-term care costs continue to climb and many of us want to enjoy the lifestyle we’ve worked hard for, from travel and dining to supporting our families. Over time, it’s easy for a mismatch to form between the retirement you want and what you've built so far. That shortfall is known as the retirement gap.

Realising you might have a retirement gap can be unsettling, but it doesn’t mean you are behind. What matters now are the practical steps you can take from wherever you are in your savings journey to start narrowing it. Here are three strategies that can help you build a more resilient foundation for your future retirement.

Diversification

Diversification simply means spreading your investments across different asset types. A well-diversified portfolio blends different risk levels, so you are not overly exposed to any single product or market cycle. As a result, some of your money grows faster, some stays steady, and together they help smooth out the ups and downs. The CPF Board also highlights diversification as a core principle of sound, long-term investing³.

Examples of instruments that support diversification include:
• Unit trusts that offer flexible, low-cost exposure to global markets
• Investment-linked policies (ILPs) that combine long-term growth with protection
• Exchange traded funds (ETFs) that provide diversified market exposure
• Fixed deposits or Singapore savings bonds that offer lower-risk stability.

Diversification becomes even more important as you approach retirement, when short-term volatility can have a bigger impact on your savings.

Layering

Layering is about organising your retirement income streams by purpose, rather than viewing retirement as one large pool of money to draw down from. Different income sources are assigned to support three key layers in retirement, so essential needs, lifestyle spending and protection costs are each funded intentionally. For example, if you plan to spend S$10,000 a month, here’s how that might be drawn down across the different layers:

Base layer: basic income
This income layer covers your non-negotiables such as utilities, food, transport and daily living costs. Out of $10,000, you may need $5,000 to cover your basic expenses and the income source funding this necessity should be stable and predictable.

Examples of income sources that could support the base layer include:

• CPF LIFE payouts
• Bonds or fixed income investments
• Stable passive income streams such as rental income

Second layer: lifestyle income
Once the basics are covered, this layer supports your retirement lifestyle. From the remaining S$5,000, you may choose to allocate around S$3,000 towards lifestyle desires such as travel, hobbies or leisure activities. This layer is more flexible as spending can be adjusted when markets are weaker or priorities change.

Examples of income sources that could support your lifestyle spending include:

• Index-linked annuities
• Retirement income plans
• ETFs or equities during favourable market conditions

Third layer: essential protection
The remaining S$2,000 should be set aside for essential protection costs such as hospitalisation, health, long-term care and critical illness premiums. These are expenses tend to rise sharply as people age yet many underestimate or forget to include when planning for retirement. Failing to account for these rising costs can result in premiums draining your lifestyle budget, or even worse, causing vital policies to end right when you need them most.

Plan for these costs deliberately by setting aside low-risk savings or investment instruments specifically to fund protection premiums. This allows premiums to be paid specifically from dividends, payouts or planned withdrawals, without having to touch the other income streams.

Examples of income sources that could be used to support your essential protection needs include:

• Investment-linked policies (ILPs)
• Endowment or savings plans
• Low to moderate risk investment funds

Layering income this way makes retirement planning simpler to manage. With distinct layers covering your basic needs, lifestyle spending and protection costs, potential gaps become easier to spot, allowing you to plan for them earlier. 

Sequenced Income Planning

Building on the layering concept, sequenced income planning is about timing when different retirement income sources are used across your retirement years. This matters because your spending needs are likely to change as you age. While S$10,000 a month may be sufficient when you first retire, rising living costs and healthcare needs may mean that the same amount is no longer enough later in life.

Rather than relying on a single fixed payout throughout retirement, sequenced income planning involves planning for different investments to mature or start paying out at different stages. This way, you’ll have reliable income to support you in the earlier years of retirement, while other savings are left to grow so they can help meet higher expenses later. By aligning when your income becomes available with how your needs evolve, this approach helps your retirement income stay resilient over time.

Here’s how sequencing could look for someone planning to retire at 65:

Early retirement (65–70):

• Rely on CPF LIFE for foundational income
• Draw down coupon from bonds for additional stability

Mid-retirement (70–80):

• Leverage payouts from maturing endowments
• Switch on growth-linked income plans or ILPs with withdrawal features
• Leverage equity portfolios or unit trusts to help offset inflation

Late retirement (80 and above):

• Tap remaining ILP value for supplementary cash flow
• Draw down from index-linked annuities 

Are you ready to manage your long-term care needs?

Your age affects how retirement strategies are applied. While the core principles of diversification, layering and sequencing remain relevant, the mix of income sources, risk level and timing of payouts should change as you move through different stages of life.

Younger investors can afford to lean more into growth-oriented tools such as ILPs, exchange traded funds (ETFs) and other long-term investments like endowments or unit trusts. With time on their side, compounding becomes a powerful engine for building future retirement income.

Older investors, on the other hand, often benefit from prioritising predictability. Instruments such as Index-linked annuities, retirement income plans and bond portfolios can provide more stable cash flow, while sequenced income planning helps manage volatility.

While the retirement gap is real, it’s manageable with thoughtful planning. With Singlife’s range of retirement solutions and guidance from a financial adviser representative, you can explore options that support the lifestyle you want when you retire.

^Notes

^{1. Source: Singlife, “Singlife Financial Freedom Index 2025”, accessed on 20 November 2025.}

^{2. Source: Fidelity International, “A decade behind: Fidelity research reveals the 10+ years retirement savings gap, with Singapore being more prepared than rest of the world”, accessed on 20 November 2025.}

^{3. Source: Central Provident Fund Board, “How does diversification helps to limit my risk in investing?”, accessed on 20 Nov 2025.}