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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 providing different combinations of trade-off between monthly payout and bequest.
| CPF LIFE Plans With Refund |
Monthly Payout
|
Bequest *
|
| LIFE Basic Plan |
Low |
High |
| LIFE Balanced Plan |
Medium |
Medium |
| LIFE Plus Plan |
High |
Low |
| CPF LIFE Plan Without Refund |
Monthly Payout
|
Bequest *
|
| LIFE Income Plan |
Highest |
No bequest |
* Bequest is the money that you leave to your beneficiaries upon death. It consists of your savings used to join CPF LIFE less monthly payouts already received. There may not be a bequest if one passes away after the savings used to join CPF LIFE has been fully paid out in monthly payouts.
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. For example, for a male born in December 1954 who has the RA balance at 55 in the table, the payout range* could be:
| Plan Type |
LIFE Basic Plan
|
LIFE Balanced Plan
|
LIFE Plus Plan
|
LIFE Income Plan
|
| RA Balance of $40,000 |
$339 - $371 |
$362 - $396 |
$382 - $419 |
$408 - $444 |
| RA Balance of $100,000 |
$742 - 821 |
$796 - $880 |
$845- $934 |
$906 - $995 |
* 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.
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 strike a balance between your monthly payout and what you leave behind to your beneficiaries (bequest), the LIFE Balanced Plan may be more suitable for you. This is also the default plan for members who are automatically included under the scheme from 2013.
However, if you have specific needs, you may choose from the other 3 plans in the table above (CPF Life plans available).
While the LIFE Income Plan gives the highest payout, it does not leave anything for 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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