How The Target Is Worked Out
The target is the pot of savings that could support your spending. It is your yearly spending divided by a withdrawal rate. At 4%, the target is 25 times your yearly spending: $48,000 a year needs $1,200,000.
The 4% figure comes from studies of United States shares and bonds over past 30-year periods. It is a starting point for thinking, not a promise. Markets elsewhere and in future may behave differently, and a retirement that starts at 50 lasts much longer than 30 years. Try 3% or 3.5% to see a more cautious target.
The table then shows how long your current savings and monthly saving take to reach the target at three rates of return that you choose. Because the rates are after inflation, the answer is in today's dollars. If you tick the CPF LIFE box, your payout is subtracted from your spending first, which lowers the target.