CPF LIFE is a life annuity scheme that provides all Singaporeans and Singapore Permanent Residents (PRs) with lifelong monthly payouts during their retirement. A supplementary benefit is that it also enables us to leave a bequest to our loved ones, if we have remaining balances from our CPF LIFE contributions.
These lifelong monthly payouts are meant to help with daily living expenses. This should help limit the number of retired individuals who may outlive their retirement savings or have to rely on their family or the government for sustenance, especially during the later phase of their retirement.
Read Also: [Beginners’ Guide] Understanding CPF LIFE And Your Monthly Payouts When You Retire In Singapore
Determining A CPF LIFE Option That Best Suit Your Needs
There are there still at least three major decisions you have to make regarding CPF LIFE to ensure it works suitably to meet your needs.
One way to do this is to look at a “benefit illustration” in a similar way to how we may view term or life insurance policies. A sensible benefit illustration for CPF LIFE would be how much we have contributed, how much we will receive over time and how much will leave behind for our loved ones.
Let’s start with the three decisions we have to make, which affect how our benefit illustration will look like.
# 1 Deciding Our Retirement Sum
There are three options for our retirement sum. We can either choose the Basic Retirement Sum (BRS), Full Retirement Sum (FRS) or Enhanced Retirement Sum (ERS). Here’s how our retirement sums are currently set as of 2022.
| 55th Birthday On Or After | Basic Retirement Sum (BRS) | Full Retirement Sum (FRS) | Enhanced Retirement Sum (ERS) |
| 1 January 2017 | $83,000 | $166,000 | $249,000 |
| 1 January 2018 | $85,500 | $171,000 | $256,000 |
| 1 January 2019 | $88,000 | $176,000 | $264,000 |
| 1 January 2020 | $90,500 | $181,000 | $271,500 |
| 1 January 2021 | $93,000 | $186,000 | $279,000 |
| 1 January 2022 | $96,000 | $192,000 | $288,000 |
| 1 January 2023 | $99,400 | $198,800 | $298,200 |
| 1 January 2024 | $102,900 | $205,800 | $308,200 |
| 1 January 2025 | $106,500 | $213,000 | $319,500 |
| 1 January 2026 | $110,200 | $220,400 | $330,600 |
| 1 January 2027 | $114,100 | $228,200 | $342,300 |
As you can see, the Retirement Sum options are not static. They increase yearly to account for inflation and rising standards of living. In general, they will increase at approximately 3.5% until 2027. This is slightly higher than the approximately 3% increments from 2017 to 2022.
# 2 Choosing Our CPF LIFE Plan
There are also three CPF LIFE plans that we can choose from. They are the Standard Plan, Basic Plan and the Escalating Plan. Regardless of the plan we choose, the balance of our CPF LIFE premium will be paid to our beneficiaries when we pass on. This, however, excludes any interest we earn on our CPF LIFE contributions.
Source: CPF
The default plan is the Standard Plan, which provides higher monthly CPF LIFE payouts to individuals.
The Basic Plan provides lower monthly CPF LIFE payouts, which effectively retains more in your CPF LIFE to leave behind for your loved ones when you pass on. This is why it is commonly labelled as “more for loved ones”.
Lastly, the Escalating Plan, introduced on 1 January 2018, is “more for your future”. This is because it starts off by providing lower monthly payouts that gradually increase by 2% each year to help keep up with inflation and rising costs during your retirement.
# 3 Deferring Your CPF LIFE Monthly Payouts
You can start receiving your CPF LIFE payouts from the time you turn 65. However, you also have an option to defer this payout up to the point you turn 70. You cannot defer receiving your CPF LIFE payouts beyond age 70.
According to CPF, for every year you delay your CPF LIFE payouts, your monthly payouts may increase by up to 7%. Of course, this is mostly because it has more time to sit in your Retirement Account (RA) collecting interest of up to 6% per annum.
Source: CPF
Your CPF LIFE Benefit Illustration
Unfortunately, we have to rely on figures we were able to retrieve from the CPF LIFE estimator back in 2018, instead of review the updated numbers in 2022. This is because of an update to the CPF LIFE estimator tool. The latest version does not provide an estimated amount for bequest left for our loved ones anymore.
In calculating the benefit illustration, we took the higher amount of any range that CPF LIFE numbers show. We also took into consideration that a person has just turned 55 in the year (in 2018).
Also, note that these numbers are just estimates, and that the total amount you ultimately receive from CPF LIFE will be equal or higher than the initial amount you put in.
Standard Plan VS Basic Plan VS Escalating Plan
In the three tables below, we compare how your CPF LIFE monthly payouts and bequest amount would change if you opt for each of the three different CPF LIFE plans available. Again, please note that these are 2018 figures. The Full Retirement Sum (FRS) in 2022 is $192,000 and the expected CPF LIFE monthly payouts will differ as well. Nevertheless, the older figure may provide a guide for how the numbers may change today as well.
Table 1: Full Retirement Sum + Standard Plan + Commence payment at age 65
| Age Member passes On | Full Retirement Sum (FRS) at 55 | Total Amount Received In CPF LIFE Monthly Payouts ($1,473/mth) | Bequest Left Behind | Total Amount Received From CPF LIFE |
| 70 | $171,000 | $88,380 | $171,422 | $259,802 |
| 75 | $171,000 | $176,760 | $88,522 | $265,282 |
| 80 | $171,000 | $265,140 | $8,379 | $273,519 |
| 85 | $171,000 | $353,520 | $0 | $353,520 |
| 90 | $171,000 | $441,900 | $0 | $441,900 |
*If we contributed the FRS of $192,000 (in 2022) in our Retirement Account when we turned 55, the Standard Plan would have provided a monthly payout of $1,550.
Table 2: Full Retirement Sum + Basic Plan + Commence payment at age 65
| Age Member passes On | Full Retirement Sum (FRS) at 55 | Total Amount Received In CPF LIFE Monthly Payouts ($1,345/mth) | Bequest Left Behind | Total Amount Received From CPF LIFE |
| 70 | $171,000 | $80,700 | $223,719 | $304,419 |
| 75 | $171,000 | $161,400 | $187,949 | $349,349 |
| 80 | $171,000 | $242,100 | $143,904 | $386,004 |
| 85 | $171,000 | $322,800 | $89,670 | $412,470 |
| 90 | $171,000 | $403,500 | $24,734 | $428,234 |
*If we contributed the FRS of $192,000 (in 2022) in our Retirement Account when we turned 55, the Basic Plan would have provided a monthly payout of $1,420 until about age 95. Thereafter, payouts would drop to about $1,340.
Table 3: Full Retirement Sum + Escalating Plan + Commence payment at age 65
| Age Member passes On | Full Retirement Sum (FRS) at 55 | Total Amount Received In CPF LIFE Monthly Payouts (Increasing 2% yearly from $1,166/mth) | Bequest Left Behind | Total Amount Received From CPF LIFE |
| 70 | $171,000 | $88,308 | $187,130 | $275,438 |
| 75 | $171,000 | $170,352 | $111,126 | $281,478 |
| 80 | $171,000 | $260,928 | $31,194 | $292,122 |
| 85 | $171,000 | $360,960 | $0 | $360,960 |
| 90 | $171,000 | $471,396 | $0 | $471,396 |
*If we contributed the FRS of $192,000 (in 2022) in our Retirement Account when we turned 55, the Escalating Plan would have provided a starting monthly payout of $1,230. This would increase to about $1,820 by the time we turn 85, and $2,220 by the time we turn 95.
Also Read: Here’s What Your CPF Full Retirement Sum Might Look Like When You’re 55
From the three tables above, you can see that if you live longer, you will definitely get more out of CPF LIFE. This is because you will be drawing out more in monthly CPF LIFE payouts over the years.
This happens is because funds in CPF LIFE continue to earn an interest of 4% per annum. This interest is paid to the Lifelong Income Fund, which is meant to provide the monthly CPF LIFE payouts for those who are fortunate enough to live to a much older age. This is meant to de-risk retirement for everyone by pooling the interest earned from those who do not live as long to allow those who live longer to continue receiving a livelihood via CPF LIFE payouts.
Another very clear observation is that the Basic Plan serves its purpose by providing your beneficiaries a larger bequest amount at every age as well as all the way till if you pass on after age 90.
Compared to the Standard Plan and the Escalating Plan, you no longer have anything to bequest to beneficiaries close to after your 80th birthday. This means you need to know what you want to use your CPF LIFE for – just for yourself or for your beneficiaries as well.
In terms of which plan gives you the best return, until age 85, it seems like the Basic Plan. However, if you live beyond that, the Escalating Plan starts being a lot more attractive. The standard plan provides the poorest overall benefits, but you do get more of your money out of it earlier.
Full Retirement Sum VS Basic Retirement Sum VS Enhance Retirement Sum
In the following three tables, we depict how your CPF LIFE monthly payouts and bequest amount differ when you opt to contribute the Full Retirement Sum, Basic Retirement Sum and Enhanced Retirement Sum. As a caveat again, these figures are from 2018, and we can just reference them with our 2022 CPF LIFE contributions.
Table 4: Full Retirement Sum + Standard Plan + Commence payment at age 65
| Age Member passes On | Full Retirement Sum (FRS) at 55 | Total Amount Received In CPF LIFE Monthly Payouts ($1,473/mth) | Bequest Left Behind | Total Amount Received From CPF LIFE |
| 70 | $171,000 | $88,380 | $171,422 | $259,802 |
| 75 | $171,000 | $176,760 | $88,522 | $265,282 |
| 80 | $171,000 | $265,140 | $8,379 | $273,519 |
| 85 | $171,000 | $353,520 | $0 | $353,520 |
| 90 | $171,000 | $441,900 | $0 | $441,900 |
*If we contributed the FRS of $192,000 (in 2022) in our Retirement Account when we turned 55, the Standard Plan would have provided a monthly payout of $1,550.
Table 5: Basic Retirement Sum + Standard Plan + Commence payment at age 65
| Age Member passes On | Basic Retirement Sum (BRS) at 55 | Total Amount Received In CPF LIFE Monthly Payouts ($801/mth) | Bequest Left Behind | Total Amount Received From CPF LIFE |
| 70 | $85,500 | $48,060 | $86,751 | $134,811 |
| 75 | $85,500 | $96,120 | $41,587 | $137,707 |
| 80 | $85,500 | $144,180 | $0 | $144,180 |
| 85 | $85,500 | $192,240 | $0 | $192,240 |
| 90 | $85,500 | $240,300 | $0 | $240,300 |
*If we contributed the BRS of $96,000 (in 2022) in our Retirement Account when we turned 55, the Standard Plan would have provided a monthly payout of $830.
Table 6: Enhanced Retirement Sum + Standard Plan + Commence payment at age 65
| Age Member passes On | Enhanced Retirement Sum (ERS) at 55 | Total Amount Received In CPF LIFE Monthly Payouts ($2,140/mth) | Bequest Left Behind | Total Amount Received From CPF LIFE |
| 70 | $256,000 | $128,400 | $255,685 | $384,085 |
| 75 | $256,000 | $256,800 | $135,418 | $392,218 |
| 80 | $256,000 | $385,200 | $19,273 | $404,473 |
| 85 | $256,000 | $513,600 | $0 | $513,600 |
| 90 | $256,000 | $642,000 | $0 | $642,000 |
*If we contributed the ERS of $288,000 (in 2022) in our Retirement Account when we turned 55, the Standard Plan would have provided a monthly payout of $2,280.
You can clearly see a big jump in the monthly CPF LIFE payouts you receive on the different retirement amounts that you may choose to contribute to your Retirement Account and CPF LIFE plan.
At the lower end of the spectrum, the Basic Retirement Sum of $801 per month may barely provide a person an adequate amount to live on. If you choose to contribute the Basic Retirement Sum, it’s important to ensure that it is not your only source of income.
On the other hand, the Enhanced Retirement Sum allows you to receive a monthly payout of up to $2,140. This is more than 70% of what a person earning the median income in Singapore takes home today. This could be a good option for you if you’re looking to sustain yourself with just CPF LIFE payouts.
Starting CPF LIFE Payouts At 65 VS Deferring CPF LIFE Payouts Till 70
The following graphs show you how much you can expect to receive if you decide to go with the Basic Retirement Sum (BRS), but opt to start receiving payouts at 65 (table 7) and 70 (table 8) respectively.
Table 7: Basic Retirement Sum + Standard Plan + Commence payment at age 65
| Age Member passes On | Basic Retirement Sum (BRS) at 55 | Total Amount Received In CPF LIFE Monthly Payouts ($801/mth) | Bequest Left Behind | Total Amount Received From CPF LIFE |
| 70 | $85,500 | $48,060 | $86,751 | $134,811 |
| 75 | $85,500 | $96,120 | $41,587 | $137,707 |
| 80 | $85,500 | $144,180 | $0 | $144,180 |
| 85 | $85,500 | $192,240 | $0 | $192,240 |
| 90 | $85,500 | $240,300 | $0 | $240,300 |
*If we contributed the BRS of $96,000 (in 2022) in our Retirement Account when we turned 55, the Standard Plan would have provided a monthly payout of $830.
Table 8: Basic Retirement Sum + Standard Plan + Commence payment at age 70
| Age Member passes On | Basic Retirement Sum (BRS) at 55 | Total Amount Received In CPF LIFE Monthly Payouts ($1,081/mth) | Bequest Left Behind | Total Amount Received From CPF LIFE |
| 70 | $85,500 | $0 | $170,816 | $170,816 |
| 75 | $85,500 | $64,860 | $105,955 | $170,815 |
| 80 | $85,500 | $129,720 | $44,056 | $173,776 |
| 85 | $85,500 | $194,580 | $0 | $194,580 |
| 90 | $85,500 | $259,440 | $0 | $259,440 |
*If we contributed the BRS of $96,000 (in 2022) in our Retirement Account when we turned 55, the Standard Plan would have provided a monthly payout of $1,130.
Read Also: CPF Medisave: Here’s How Your Basic Healthcare Sum Might Look Like When You’re 65
One key observation is that simply deferring your CPF LIFE payouts from 65 to 70, will increase your monthly payouts by nearly 35%. For those who work past their retirement age or with the means to defer payouts to 70, this could be a good way to receive higher payouts when you get older.
The main reason you get higher payouts by deferring CPF LIFE till you turn 70 is because your funds in your Retirement Account continue earning interest for a further five years compared to those who start withdrawing at 65.
There’s No ‘Best’ CPF LIFE Hack
The above tables and depictions are only meant to let you know how much you can expect to receive if you opt for the different choices available, as well as the strengths and weaknesses of each options.
There really isn’t one way that we should go about receiving our CPF LIFE payouts as each of us face diverse circumstances in life. We should understand our circumstances and choose the best option for receiving our CPF LIFE payouts.
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