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Having an income for life during retirement is very important. That is why the government has introduced CPF LIFE so that members can have a monthly payout for as long as they live.
When a member joins CPF LIFE, a portion of the cash savings in his Retirement Account (RA) will be set aside as the premium for a life annuity. Combined with the remaining RA savings, the member will get a lifelong monthly income from his Draw Down Age (DDA).
Here are a few key points regarding CPF LIFE.
There are 4 LIFE plans under CPF LIFE, out of which 3 are refundable plans. Each LIFE plan provides a different combination of trade-off between monthly payout and bequest.
See table below:
| 3 Refundable Plans |
Monthly Payout
|
Bequest 1
|
| LIFE Plus Plan |
High |
Low |
| LIFE Balanced Plan |
Medium |
Medium |
| LIFE Basic Plan |
Low |
High |
| Non-Refundable Plan |
Monthly Payout
|
Bequest |
| LIFE Income Plan |
Highest |
No bequest2 |
No bequest means that no refund will be made to the member’s beneficiaries upon the member’s death even if monthly payouts under the plan have not started.
The monthly payout depends on various factors including your choice of LIFE plan, your gender, the age you join CPF LIFE and the amount of RA savings used to join the scheme.
Example: If you are a 55 year old male who chooses the LIFE Plus Plan, 100% of your RA savings will be deducted to purchase the annuity. The approximate amounts* for each of the LIFE plans are shown:
|
|
Refundable Plans |
Non-Refundable Plan |
|
LIFE
Plus
Plan |
LIFE Balanced Plan |
LIFE Basic
Plan |
LIFE Income Plan |
|
Remaining RA savings |
0% |
70% |
90% |
0% |
|
Annuity Premium |
100% |
30% |
10% |
100% |
The payout range is based on CPF interest rates of between 3.75% and 4.25% per annum and does not represent the lower and upper limits of the payout. The monthly payout may be adjusted every year to take into account factors such as CPF interest rate and mortality experience.
You can use the CPF LIFE Payout Estimator to find out how the monthly payout varies with different RA balances.
* CPF Board will inform you of the exact premium upon the issuance of your CPF LIFE policy.
Your choice of LIFE plan depends on your own retirement needs. The LIFE plans differ in the level of monthly payout and bequest that may be left to your beneficiaries.
If you wish to have a highest payout among the refundable plans but leave less for your beneficiaries (bequest), the LIFE Plus Plan may be more suitable for you.
However, if you have specific needs, you may choose from other plans with these features:
The LIFE Balanced Plan provides a balance between your monthly payout and what you leave behind to your beneficiaries.
The LIFE Basic Plan gives a lower payout than the Balanced Plan, but leaves more for your beneficiaries.
The LIFE Income Plan gives the highest payout, but does not leave anything for your beneficiaries. Thus, this plan may be more suitable for those who do not have beneficiaries.
For detailed information on CPF LIFE, please click here.
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