How to choose your CPF LIFE plan

27 Nov 2018 

CPF LIFE gives you the assurance of a monthly retirement income for as long as you l​​​​ive. There are three CPF LIFE plans: the LIFE Standard Plan, the LIFE Basic Plan and the LIFE Escalating Plan. With three options to cater to your needs, which one should you choose?

The Standard Plan offers higher level monthly payouts, while the Basic Plan offers lower level monthly payouts so that you can leave a larger bequest for your loved ones*. Under the Escalating Plan, monthly payouts are lower in the initial years, and will increase by 2% yearly.

You are only required to choose your CPF LIFE plan at the time you wish to start receiving your monthly payouts, which can be anytime between your payout eligibility age^ and age 70.

Let’s join Fatimah as she considers which CPF LIFE plan to choose.
How to choose your CPF LIFE plan.png

1. Do I want level payouts throughout the years, or payouts that increase yearly?
Fatimah will have to consider her desired lifestyle and financial needs in retirement when deciding between a plan that offers level payouts or escalating payouts.

A gradual increase in monthly payouts under the Escalating Plan can help Fatimah cope with a potential rise in the cost of living during her retirement years, and may be a suitable option if she can manage with a lower monthly payout initially.

Considering that she has other savings and financial plans to help her cope with the potential increase in cost of living, Fatimah chooses level payouts over escalating payouts.

2. Do I want to use the savings for my retirement needs or leave them for my loved ones?
Now that Fatimah has chosen level payouts, she has to decide between the Standard Plan and Basic Plan. The Standard Plan offers Fatimah a higher level monthly payout, so that she can enjoy higher payouts for her retirement. On the other hand, the Basic Plan offers a lower level monthly payout to enable her to leave a larger bequest for her loved ones#.

As Fatimah is looking forward to picking up new hobbies in retirement, such as baking and cross-stitching, she would prefer to receive a higher monthly payout to support these additional pursuits when she retires. Her children are also financially independent, so she can prioritise using her savings to meet her own retirement needs.

Based on these two questions, Fatimah is able to weigh her options according to her personal circumstances – and finds that the Standard Plan suits her needs best.

Which CPF LIFE plan would best suit your needs in the future? Perhaps you can start by asking yourself these two questions as well!

*For all CPF LIFE plans, payouts may be adjusted to account for long-term changes in interest rates or life expectancy. Any adjustments are expected to be small and gradual.
^The payout eligibility age is 65 for members born in or after 1954. For payout eligibility age of older cohorts, please refer to https://​www.cpf.gov.sg/Members/Schemes/schemes/retirement/retirement-sum-scheme.
#Any unused annuity premium (without interest) and Retirement Account savings will form a bequest and be paid to the member’s beneficiaries when the member passes away. Bequest amount differs across plan type and age of death. 

To find out the estimated payouts and bequests with different CPF LIFE Plans, try out the CPF LIFE Payout Estimator. ​


Information accurate as at 27/11/2018.

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