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Planning for Retirement

Planning for Retirement: Using the Rule of 375 to Ensure Financial Security

Retirement planning is a multifaceted process that involves careful consideration of various factors such as longevity, inflation, the desire for early retirement, and lifestyle expectations. To streamline this process, the “Rule of 375,” inspired by Amry Rocha Kima, offers a simple but useful method to estimate the savings for couple required to maintain different lifestyle levels during retirement.

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Understanding the Rule of 375

The Rule of 375 is a financial guideline that helps retirees estimate how much they need to save by multiplying an indicative monthly retirement expenditures estimation by 375. This factor accounts for longevity, inflation, and provides a buffer for early retirement. Let’s explore how this rule applies to different retirement lifestyles using specific assumptions based on the Central Provident Fund (CPF) Retirement Sum Schemes for 2025.

Integrating Rule of 375 with CPF Life Retirement Sum Scheme Concept

We utilize methodologies based on CPF Life’s payout projections base on the 2025 Retirement Sum Criteria to provide required savings estimations for various lifestyle.

The Minimum Sum Requirement in 2025 is $213,500. Here is an example of how much an individual will receive monthly from age 65 onwards, based on the amount they have in their CPF Retirement Account (RA) at the age of 55 in 2025:

BRS ($106,500): will allows an individual to receive a CPF Standard life income of $805/mth from age 65

FRS ($213,000): will allows individual to receive $1,710/mth (Allows for basic lifestyle)

Traditional ERS (319,500) = will allow individual to receive $2,510/mth (Allows for enhanced lifestyle)

New ERS in 2025 (4x BRS/$426,600) = will allow individual to receive  $3,330/mth (Allows for comfortable lifestyle)

Basic Lifestyle

Monthly Expense: $1,710 x 2 = $3,420 (including spouse)

Required Savings: $3,420 * 375= $1,282,500

A basic lifestyle assumes reliance on the CPF Minimum Sum for both you and your spouse, aimed at covering essential living expenses without much room for luxury. This level ensures that basic needs such as housing, food, healthcare, and other necessities are met.

Enhanced Lifestyle

Monthly Expense: $5,020 (including spouse)

Required Savings: $5,020 * 375 = $1,882,500

The enhanced lifestyle reflects a moderate upgrade from the basic, allowing for additional comforts and occasional leisure activities. This spending power can afford a better quality of life while still being cautious with expenses.

Comfortable Lifestyle

Monthly Expense: $6,660 (including spouse)

Required Savings: $6,660 * 375 = $2,497,500

A comfortable lifestyle provides for a higher standard of living, enabling more frequent travel, dining out, and other enjoyable activities. This budget ensure you and your wife can enjoy your golden years with fewer financial worries.

Luxury Lifestyle

Monthly Expense: $13,320 (including spouse)

Annual Expense: $13,320 * 375 = $4,995,000

The luxury lifestyle represents a very high standard of living, equivalent to twice the Enhanced Retirement Sum (ERS) for both you and your spouse. This plan supports a life of comfort and indulgence, allowing for premium experience, extensive travel, and other high-cost activities.

Factors Considered in the Rule of 375

Longevity: The rule accounts for a longer life expectancy, ensuring that savings do not deplete prematurely. This is crucial as individuals are living longer and retirement periods can most likely extend beyond the current life expectancy.

Inflation: By using a higher multiplier, the rule incorporates the impact of inflation over the years, maintaining purchasing power and ensuring that retirees can afford their lifestyle as costs increases.

Early Retirement: The rule provides a buffer for those who choose to retire early, giving them a financial cushion to support an extended retirement period.

Lifestyle Expectations: By categorizing different levels of retirement lifestyles, the rule helps individuals plan according to their specific needs and desires, whether it’s maintaining basic needs or enjoying a luxurious retirement.


The Rule of 375 offers a practical approach to retirement planning by providing clear savings targets based on anticipated living expenses. While these targets might seem out of reach for some, understanding how to plan and allocate your investments can help you achieve your retirement goals and live at your own terms.

By understanding the required savings for various lifestyle levels, individuals can better prepare for a financially secure retirement.

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My post provides my industry insights, insurance tips, and investment strategies. Alongside, I own Moneyline.sg, a financial comparison platform, and is the Founder and Branch Director of Synthesis, an advisory group within Synergy FA. With 15 years of experience in financial services, I aim to offer valuable expertise

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