If you're in the workforce and think Singapore is an expensive place to live, try doing it without an income.

That's exactly what retirement is - when you continue to have similar daily living expenses while no longer receiving a salary from your employment.

This is why retirement planning is so important, and many financial advisors and financially savvy people advocate that we start growing our retirement nest egg from the time we earn our first paycheck.

It can be intimidating to start accumulating a large nest egg that we may need for our retirement and to start investing to grow our savings for our retirement.

However, we cannot sit on these excuses and need to start as early as possible.

If we're feeling overwhelmed, here are 5 things that many of us may already be doing today to prepare for our retirement, and we simply need to prudently build on them to further improve our retirement plans.

#1 CPF

During our working years, both our employers and us contribute a chunk of our salary towards our CPF accounts.

The first and most immediately important way we use our CPF monies is to pay for our home from balances in our CPF Ordinary Account (OA).

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What many of us may overlook is the fact that we are also slowly building towards our retirement through smaller contributions to our CPF Special Account (SA).

Our SA balances also grow at a pace of 4.0 per cent per annum (p.a.), which is higher than the 2.5 per cent p.a. paid to our OA balances.

Signifying the growing importance of retirement as we age, we contribute an increasing amount to our SA over the course of our career.

When we initially start working, we contribute 6 per cent of our salary to our SA. This grows to 7 per cent (above 35 to 45), 8 per cent (above 45 to 50), and 11.5 per cent (above 50 to 55).

At 55, our CPF Retirement Account is created and we typically have to contribute into the Full Retirement Sum (FRS). Following this, our SA contributions drop to 3.5 per cent (above 55 to 60), 2.5 per cent (above 60 to 65) and 1.0 per cent (above 65).

When we turn 65, we are able to tap on our Retirement Account funds by receiving CPF LIFE monthly payouts. CPF LIFE, our national annuity scheme, is an important retirement safety net in Singapore.

It provides citizens and permanent residents the assurance of a guaranteed lifelong income, regardless of how long we live, after we retire from the workforce.

While CPF LIFE is meant to provide a basic retirement income for us, we cannot pin our entire retirement needs on it, especially if we intend to spend more than what is minimally required in Singapore.

#2 HOME

Without realising it, we are also strengthening our retirement safety net by paying for our home. There are three main ways we can monetise our home for our retirement.

We can tap on the Lease Buyback Scheme (LBS) to sell the tail-end of our HDB flat's lease that we will unlikely need back to HDB.

HDB flat owners need to ensure that the remaining lease can last the youngest owner till they are at least 95.

The funds we receive will flow into our CPF Retirement Account to beef up our CPF LIFE monthly payouts. We also stand to receive an LBS bonus ranging from $5,000, $10,000 or $20,000.

The second way to monetise our home is to right-size. Once we retire and have adult children that move out to start their own families, we can choose to sell larger homes and move to one that is appropriate for us and our spouse.

Obviously, we can sell our private properties to right-size to a smaller flat. When we right-size our HDB flats, we also start to receive a Silver Housing Bonus (SHB) and receive a cash bonus of up to $20,000 as well.

Finally, we can choose to rent out spare rooms to receive recurring income each month. We can also rent out the entire home and live with our adult children, or we can have our adult children live with us and contribute towards the household expenses.

#3 LIFESTYLE

It is not uncommon to hear people saying that they can reduce their expenses when they retire. However, after being used to a certain way of life for so long, it will definitely be difficult to cut them out.

As we progress in our career and start drawing in a higher salary, it can be very easy for us to be enticed into lifestyle inflation. We can afford eating out at expensive restaurants, buying branded goods, going for frequent overseas holidays, getting a car and allow many other expenses to creep into our lifestyle.

If we live prudently today, more money can be channelled into our savings and retirement nest egg to grow immediately. When we retire, it will help us to live that same prudent lifestyle more easily.

#4 SAVINGS PLANS

Another way you may also be building your retirement nest egg is through a savings policy from your insurance company. With a savings policy, you receive a lump sum payout at the end of your policy term.

Many savings policy also offer protection against death, total and permanent disability (TPD), and terminal illness - to provide your family with the assurance that they receive the funds you have intended to build for them.

#5 CHILDREN

Given the option, no parent would want to rely on their children as their retirement plan. However, it may be necessary as they gave up large chunks of their savings to bring up their children, educate them and let them live a comfortable life while growing up.

Even without overly planning it, our children will very likely have the filial obligation to help us in our retirement. If we don't want to rely on them - and we shouldn't because they will have their own family and children to take care of - we need to plan for our retirement conscientiously from as early as possible.

THERE IS NO ONE-SIZE-FITS-ALL RETIREMENT PLAN

There are many variables that will factor into how we plan, including:

1. Our investment horizon: How long do we have until our retirement;
2. Amount of retirement funds we need: Based on the lifestyle we intend to live and also considering how inflation will impact our spending power;
3. How financially savvy we are: To choose the right kind of investments or products to put our savings into the long-term;
4. Our risk appetite: How much risk are we willing to take with our investments
5. How much we intend to leave behind: Do we want to leave a legacy for our loved ones

This article was first published in Dollars and Sense.