CPF LIFE is an annuity scheme that provides lifelong monthly payouts for Singapore Citizens and Permanent Residents from the age they choose to start their payouts.
Let’s join Fatimah as she explains the three CPF LIFE plans to her parents.
The Standard Plan offers higher monthly payouts in exchange for a lower bequest amount.
Under the Standard Plan, all your Retirement Account (RA) savings will be deducted as the annuity premium and paid into the Lifelong Income Fund, which will provide you with your monthly payouts for as long as you live.
If you do not choose a CPF LIFE plan by age 70, you will be placed on the Standard Plan by default.
The Basic Plan offers lower level monthly payouts and lets you leave more bequest to your beneficiaries.
Under the Basic Plan, about 10%-20%* of your RA savings will be deducted as the annuity premium and paid into the Lifelong Income Fund. The rest of your RA savings will remain in your RA and provide you with monthly payouts until one month before you reach 90 years old. Once you reach 90 years old, you will receive your payouts from the Lifelong Income Fund.
The Escalating Plan provides payouts that are initially about 20% lower than payouts under the Standard Plan, but will increase by 2% yearly. This is to help you cope with the rising cost of living over time.
Under the Escalating Plan, all your RA savings will be deducted as the annuity premium and paid into the Lifelong Income Fund, which will provide you with your monthly payouts.
For all CPF LIFE plans, payouts may be adjusted to account for long-term changes in interest rates or life expectancy. Such adjustments (if any) are expected to be small and gradual. The plan you choose will also determine how much of your CPF savings will be left for your beneficiaries.
You can use the CPF LIFE Payout Estimator for a more detailed comparison of the payout you can receive from each plan based on your Retirement Account savings.
*The amount of savings deducted will depend on how old you are when you join CPF LIFE and your gender
Information accurate as at 28/5/2018.