Monday, 24 January 2022

Living On A Fixed Income for 30 years After 65


In my previous day job as part-time coach to the new potentials in our Leadership course, I often noticed highly educated people (especially those not from the Arts stream) like to do 2 things:

1)  Use excessive "precision" when non is needed.

2)  Like to express and rattle of numbers either to fudge, or to impress.

I had to nudge, poke, coach my mentees to use imagery with words, if they want to be understood better. 

Those of you who writes or likes poetry, you already know words work better than numbers when it comes to impressing the panties off girls!

I give you 2 examples.

In supply chain, we often spew off numbers in cubic metres how much this or that inventory is taking up our warehouse space... 

What's a better way to express these cubic metres?

What if I say we have around 30 x 40' containers of inventory instead?

Even if you never worked in supply chain before, you have seen a 40' container on the road right?

Isn't it easier to visualise 30 of these containers sitting in your warehouse than some abstract numbers in cubic metres?

What if I write in my report it cost us millions in customer returns annually?


We have billions in sales.

How to instill a sense of urgency in your communication?

Now if I write our customer returns is equivalent to the annual sales of 5 retail stores, I'll bet top management will take notice!

Can you imagine day after day, month after month, year after year, 5 of our stores are selling nothing but total crap to our customers!?

When it comes to retirement planning, lots of numbers are just thrown around casually.

Inflation, expressed in CPI numbers, is a number many like to parrot out of context, as if inflation affects everyone EQUALLY... (No, it does not)

If you are depending totally on CPF, and to be precise, CPF Life for your retirement needs after 65, that's a good example of what's it like to be on a "fixed" income. Its the closest to the pension schemes of other countries.

Now let's say you are blessed with long life like lao lee and Mahatir - you believe you can last till age 95.

That meant you'll be living on a relatively "fixed" CPF Life payouts for the next 30 years. 

I know, some of you want to be cute by saying we can choose the CPF Life Escalating Plan. Sure. But how many of you will really chose that plan? (Got you!)

Friend, if you can live till 95, ALL 3 CPF Life plans are same, same lah! Remember the monkey story of 3 bananas in the mornings, 4 in the evenings?

CPF Life sucks if we "up lorry" early. Period.

The trick to squeese blood from stone is live to 100 and beyond!

How to visualise what's life on a fixed income for 30 years?

For old fogeys age 50 and above like me, easy!

Just use our take home pay 30 years ago. 

Now imagine if we never had any pay increments or any promotional pay raises for the past 30 years.


If you take home pay was $10K per month 30 years ago, even after all the price increases all these years, life is good right? Still got left over for wine, women, and song!

If its $5K per month, I mean its still tolerable right? Maybe downgrade a bit from condo to HDB lifestyle as we get older? 

But to the average university graduate, I think take home pay $2K per month 30 years ago is more common. 

Hey! That's around the monthly CPF Life payouts if we decide to tap the CPF Enhanced Retirement Scheme at age 55! 

Well, there you go!

That's a better way to visualise how CPF Life payouts of $2K monthly would be like for you from age 65 to 95.


Not what you thought you needed? 

Well, better to realise it now than wait till you're 65!

For the past 30 years, did your life get better financially?

What did you do?


You already got the knowledge and the tools to help you decide!!!

What vehicles to ride, which path to take. Wink.


You are stuck financially like you did 30 years ago. Still earning the same $2K monthly.

$2K monthly was new graduate's pay 30 years ago. Now $2K can qualify for Workfare.

Workfare is government subsidy for low income earners... 

(Eh, this $2K can be a metaphor, not only used literally)

Insanity is doing the same thing over and over again expecting a different result,




  1. Started off with 1M65, then 4M65, 8M65, 16M65, . Yes. We can depend on SG CPF scheme.

    CPF Life is a small part of 1M65 or 4M66. LOL!

    1. CW,

      We can do a simple "Trust but Verify" scan of all those "Tarzans" that retired early, and are transparent enough to share their total networth and free cash flows openly.

      Every SINGLE one of them have CPF as a minority share - despite their CPF voluntary contributions, early refund of CPF funds used for housing, and what not...

      Not that CPF is no good. It works great as a "stabiliser" in our portfolios.

      Or coming down the mountain vehicle to reduce risks in our portfolios as our testosterone levels wanes...

      But it "sucks" as an "acceleration our way out of trouble" kind of vehicle...

      I learned this way back when taking my class 2B motorbike course.

      Those who drive would know ;)

  2. Smol,

    If one can live till 95, the one who selected CPF Life Basic plan will be kicking himself!

    If you look at govt's ACTIONS (ignore what they say), it's obvious that their solution to retirement inadequacy is to continue working, and increasing pay for lower-skill jobs.

    70 will be the new 62 (which was the new 55).

    E.g. Basic salary for entry-level garbageman will be $3,260

    6 years down the road, those retirees who complain about high cost of living will be gently pointed to such jobs. Hey, no crutch mentality ... $3+K salary plus $500 CPF Life, no good meh?!? LOL!

    At the same time, when garbagemen, road sweepers, toilet cleaners, construction workers, healthcare aides, food servers, dishwashers are all getting $3+K to $4K starting salaries, what do you think our utility bills, conservancy fees, studio apartments, and cai png will cost??? LOL!

    Hope those bleeding hearts who have been complaining about Singapore's treatment & financial suppression of low-wage workers don't regret what they wished for! Kekeke!

    For the rest of us ... time to dust off the old playbook of the 1970s & 1980s of how to grow your income even while you're not working. ;)

    1. Spur,

      1. If we can live till 95, we already have won! Never mind the differences in payouts between the CPF Life plans :)

      2. The sad truth is for those on the Save More path all their lives, come age 65, they have to choose a CPF Life Plan that is nothing but a pure SPECULATION...

      Which plan is better will depend a lot on WHEN we go sell salted eggs!

      3. But for those on the Earn More path, its a lot easier based on risk/reward - something we are used to ;)

      And it helps if we are NOT depending on the CPF Life payouts during retirement to cloud our decision making!

      I'm not a bleeding heart (that's clue to which plan I would choose).

      Yup. Having a bit of volatility and inflation hitting 4% would keep us mentally active to prevent dementia during old age!

      Active investing/trading as alternative to Bridge or Mahjong? LOL!

      Use it, or lose it! (Here's looking at you, "passive" folks!)

      As for how much we will be paying in future as in inflated lifestyle costs for the higher starting salaries to service workers, those of us who have studied or worked overseas in Japan, Europe, or US would know.

      "Akan datang".

    2. Smol,

      Choosing which CPF Life plan is pretty simple ... check one's own health picture, family history.

      If one still doesn't have the 3 highs (BP, blood sugar, cholesterol) at 65, Standard plan would be reasonable.

      If one looks like this at 70+, then Escalating plan probably is the way to go. 🤣

      Chances are this method will allow one to maximise payouts while potentially minimising the "bleeding heart" issue.

      The fact that one can be hit by a lorry tomorrow (get it? Up lorry? Lol) doesn't preclude the fact that using random coin flips or emotional biases to make selection is probably not the most efficient way. :P

    3. Spur,

      That's what big daddy is banging on ;)

      If one is dependent on CPF entirely for retirement - no dividends, no rental income, no interests from bonds, no allowance from children - then of course the person riding the ComfortDelgro bus would likely focus just on PAYOUTS.

      Then there's people like me - risk/reward speculators who are no bleeding hearts.

      1. When I die I've no control. "Maximising" payouts based on a moving target is an exercise in make belief or faith.

      2. But I can calculate the risk/rewards if I die early (you are right, accidents can happen), how much my family will get for forgoing some of the monthly CPF payouts.

      I have no children, but I have 2 siblings. I rather they get my CPF than some strangers I don't know. "Water don't flow to other people's farm."

      3. I'll be 55 end of this year. It helps I've decided to take as much money OUT of CPF as legally possible, therefore ensuring my CPF Life payouts to be as MINIMUM as possible too. LOL!

      I'm a small government guy. Its clear which direction big daddy is going.

      I rather walk myself than hop onto the bus, thank you very much!

    4. Smol,

      Umm, the payouts I referring to includes BOTH monthly disbursements as well as any potential bequest amounts. ;)

      The risk/reward lies more in terms of health status & family history.

      The BRS/FRS/ERS choice can be separate from the risk-reward choice of Basic/Standard/Escalating.

      I view the BRS/FRS/ERS selection as being more of
      (1) how competent of money mgmt outside of CPF?
      (2) how trusting of govt?

      I have friends & ex-colleagues who decided (or intend) to go for Basic, because of some underlying condition, even if it's just pre-hypertension that is well controlled, or family history of cancer even though the guy is in tip-top fitness currently.

      Govt knows the "game" too. That's why Basic plan monthly disbursements are reduced after about 20 years. They could have structured the later annuity portion of Basic plan to match the initial payouts, but didn't. ;)

      Of course if CPF monies form only 5% or 10% of our liquid networth, then the decision doesn't need to be so clinical & logical. Where's the fun in that? 😁

    5. Spur,

      1. The reduced payouts for Basic plan is "minuscule" in dollar terms... And that only kicks in after age 85.

      What coincidence! That's the age big daddy forecasted most of us will expire quietly into the night...

      If $100-$200 monthly makes a big difference during retirement, I think we have bigger issues to focus on ;)

      2. I rather hedge in case I got struck by lightning between age 66 to 82. I mean if I up lorry during my 70s, my siblings would be in their 70s too.

      My CPF, though small, can benefit them till their 90s. The big chunk would be my assets OUTSIDE of CPF. Hope my siblings are not too happy when I'm gone! LOL!

      If I reached my expiry date in my 90s, I don't think my siblings have any use for my bequests - CPF or non CPF assets. They are in their 90s too! I mean duh!

      3. Anyway, one thing I'm certain of is big daddy will keep making adjustments and changes along the way.

      We can discuss all we want about CPF Life, big daddy may even overhaul it completely like they did with Eldershiled with Careshield - from voluntary to compulsory; from age 40 to 30 - not enough critical mass for socialising mah!

      If not enough CPF members choose the CPF Life plan they expected, of course they will make changes to the other 2 plans so the majority will choose "what's good for them"!

      Big daddy knows best!

  3. I hope to be the last man standing to send off my older ones, and then work, and work, maybe at a slower and slower pace but wiyh lower pay and not drawiung down much except for medical and sending off expenses. When all is done, let me pass away at my workplace.

    No need cpf calculation

    But well, there is a just a wish

    1. Sillyinvestor,

      You remind me of Anita Mui.

      When we love what we do, we'll do it till our last days...

      How many people so lucky as to do what they love?

      We have minister mentors; I hope we have teacher mentors for dedicated teachers like you too!

      I too would like to work part-time for as long my legs and health can carry me.

      I must say I'm enjoying this 2 day workweek routine of mine!

      If everyday is Sunday; Sunday soon loses its meaning...

  4. Smol,

    Your earn more approach do add value and interest in life.


    1. WTK,

      Like they say, "Its better to love and lost than never to have loved at all."

      Wishing you a fantastic year of the Tiger!

    2. Smol,

      Happy Tiger year to U. Totally agree. Experience is better than non experience. Risk taking is worthy!



Related Posts Plugin for WordPress, Blogger...