Saving for your retirement is easier with the CPF Lifelong Income For the Elderly (CPF LIFE) Scheme, which gives you lifelong monthly payouts from the age of 65. With three CPF LIFE plans to choose from, here are what you need to consider.
1. What type of retirement income do you need?
Deciding what type of retirement income you need from your CPF LIFE plan is key to choosing the right one for you. There are three CPF LIFE plans:
In all three plans, you will enjoy payouts for as long as you live, and any remaining CPF LIFE premium balance will be given to your beneficiaries - together with your remaining CPF savings - upon death.
2. How much do you need?
After you've decided on the most suitable CPF LIFE plan, the next step is to work out the amount of monthly payouts you want. This includes thinking about the lifestyle you wish to have in your retirement years, and the expenses that will come with it.
Click here to use the CPF LIFE Estimator to find out the amount of CPF savings you will need to achieve the desired monthly payout under your preferred CPF LIFE plan.
3. How can you meet your goal?
If you think you will fall short of your goal, there are two things you can do to help you meet your goal.
You can use cash or your CPF savings to top up your CPF Special Account (if you are below 55) or Retirement Account (if you are 55 or above)*. Starting early with small, regular top-ups can make a big difference over time. Adding $5 a day to your CPF savings will net you over $35,000 in 15 years** with the power of compound interest.
If you do not have an immediate need, you can also defer the start of your CPF LIFE monthly payouts. For every year that you defer the start of the payouts, your monthly payouts will increase by up to 7 per cent. The latest you can start your payouts is at age 70, after which they will automatically begin.
*The savings in your Special Account and/or Ordinary Account, up to the Full Retirement Sum, are transferred to your Retirement Account when you turn 55.
**Computed using the base interest of 4 per cent per annum on your Special or Retirement Account.
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