Enough in CPF for Retirement?

Recently, I had a conversation with my friend on how we can use our CPF to help us prepare for our retirement. As we were discussing, it made me realize that I am not aware of how much I need to retire and how much I would need in my CPF in order to fund that retirement. So after that conversation, I went back to take a closer look at my retirement needs and below is the result.

To start, I need to determine how much I will need monthly when I retire. I had come up with a rough estimate below based on today's dollar.  

Category	SGD$/Month
Meal	900
Transport	200
Medical Insurance	500 (based on AIA)
Utilities/internet Bills	200
Misc	200
Total	2000

  

With this figure, I used CPF retirement estimator  to see how much I will need to have to fund a equivalent of $2000 monthly payout (in today's dollar) for 20 years when I retire. 

Based on the calculator, I will need about $1 million (future dollar) to receive about $4443 (future dollar) per month when I retire. This translate to about $450,000 in today's dollar. Unfortunately, I am still very far away from $450,000 in my CPF today. 

So I went on to calculate how long I need to work in order to accumulate $1 million in my CPF in the future. It seems like an impossible task to hit that magic $1 million figure. However after working through the numbers, I am able to save $1 million in my CPF when I hit 55.

The assumptions in my calculation are listed below

1) Interest policy from CPF remains unchanged

2) No gap in my employment with same pay and 1 month fixed bonus

3) Transfer of OA to SA until SA reached Full Retirement Sum

4) Full Retirement Sum and Basic Healthcare Sum did not change.

5) No major withdrawal from CPF except for Medishield Plan

Hopefully my Investment portfolio can supplement the monthly payout in the future to cater for other additional entertainment expenses.

Happy Value Investing