Longevity Risk: The Overlooked Threat in Singapore’s Retirement Planning

When most people talk about retirement, their fear is simple: “What if I don’t save enough?”

But here’s the twist: in Singapore, with one of the world’s highest life expectancies (over 83 years and still rising), the greater risk isn’t dying too soon.
👉 It’s living much longer than you planned for.

This is called longevity risk, and while it sounds like a blessing, it’s one of the biggest financial challenges of our generation.

1. What Exactly is Longevity Risk?

Longevity risk is the danger of outliving your retirement savings.

Imagine retiring at 65 with a well-built nest egg that you expect to last until 80. But if you live until 95 — that’s 15 years of unfunded living expenses.

The result?

• Forced downsizing or lifestyle cuts.

• Becoming dependent on children or relatives.

• Losing freedom to choose quality healthcare or maintain independence.

It’s not just a financial issue — it can impact dignity, family harmony, and quality of life in your final decades.

2. Why Singapore is Especially Vulnerable

Longevity risk is a global concern, but in Singapore, the challenge is magnified:

• Life Expectancy is Climbing: Average life expectancy is already 83, with many living into their 90s. Medical advances may push this further.

• Healthcare Inflation: Healthcare costs here rise faster than general inflation. A dollar today won’t buy the same hospital care in 20 years.

• Longevity Gender Gap: Women live longer than men (about 3–5 years more on average). For single women or widows, this means an even longer financial horizon.

• CPF Limitations: CPF LIFE provides lifelong payouts, but often covers only basic needs — not lifestyle upgrades, rising costs, or unexpected medical bills.

3. The Common Miscalculation

Most people underestimate how long they’ll live.

A survey by the Institute of Policy Studies found many Singaporeans expect to live until their late 70s — underestimating by nearly a decade.

That gap can equal hundreds of thousands in additional funding needs.
And because people underestimate, they also under-save.

I’ve seen clients who thought they had “enough” — only to realise that their funds would run dry in their 80s, leaving their 90s uncertain.

4. Strategies to Counter Longevity Risk

Here’s how you can prepare:

1️⃣ Layered Income Streams
Don’t rely on just one source. Combine CPF LIFE with private annuities, REIT dividends, or structured retirement income plans. That way, income doesn’t dry up even if one stream slows.

2️⃣ Healthcare Shielding
Separate healthcare protection from retirement income. Hospitalisation and critical illness insurance ensures your retirement savings aren’t wiped out by medical bills.

3️⃣ Longevity Insurance Products
Some plans begin payouts only at 80 or 85. They act like a “second engine,” kicking in precisely when most people risk running short.

4️⃣ Dynamic Retirement Reviews
Revisit your plan every 3–5 years. Life expectancy isn’t static. A flexible approach ensures your plan adjusts as conditions (and health) evolve.

5️⃣ Mindset Shift
Stop planning “until 80.” Start planning for 100. It sounds extreme, but building in buffers reduces stress and preserves freedom in your later years.

5. What This Means for You

Longevity risk reframes retirement from “how to get there” to “how to stay there.”

It’s no longer just about:
✔️ Reaching retirement comfortably.

It’s about:
✔️ Staying financially independent for decades beyond retirement.

It’s not about predicting the exact year you’ll live to — it’s about ensuring your money lasts no matter what.

5. What This Means for You

Longevity risk reframes retirement from “how to get there” to “how to stay there.”

It’s no longer just about:
✔️ Reaching retirement comfortably.
It’s about:
✔️ Staying financially independent for decades beyond retirement.

It’s not about predicting the exact year you’ll live to — it’s about ensuring your money lasts no matter what.

Your Retirement Specialist | Retirement Expert, SG Retirement Advisor, and Wealth Advisor.
🌐 https://www.yourretirementspecialist.com/home