Recently, my mother has been a little worried.
You see, she has been out of the workforce for close to 5 years. At the age of 60, coupled with a 20-year employment history of working in a family-run business, she is not in an ideal position to re-enter the workforce.
Yet, instead of enjoying her retirement, she worries that her savings aren’t enough to tide her through retirement.
She is also unsure of what the Central Provident Fund (CPF) scheme entails and has obviously never heard of CPF Lifelong Income For the Elderly (CPF LIFE).
So I took it upon myself to find out what CPF LIFE is about, and how much exactly, will we be getting in monthly payouts when we hit 65. Hopefully, it’ll give my mother peace of mind. haha.
TL;DR: How Much Will I Receive in Monthly CPF Payouts When I Retire?
Note: Calculations are based on the retirement sums for 2022 and assuming the person is born in 1967.
What is CPF LIFE?
Just a quick introduction, CPF LIFE is a life annuity scheme that provides a monthly payout from retirement age for as long as you live for all Singapore Citizens and Singapore Permanent Residents (SPR).
Basically, CPF LIFE provides you with your monthly retirement income from your CPF.
Fun fact: Something I never knew either, the ‘Life’ in CPF LIFE stands for Lifelong Income For the Elderly.
When you hit the age of 65, you will be able to choose the different types of payouts you can receive monthly, from the CPF Board.
HUH? I Can Choose My Payouts?
Yes, you can! In fact, you can choose from three different payout plans based on your needs. To put it simply, here’s a breakdown of the CPF Life Basic, Standard, and Escalating Plans:
| CPF Life Basic Plan | CPF LIFE Standard Plan | CPF LIFE Escalating Plan | |
|---|---|---|---|
| What Is It? | Gives you lower monthly payouts. This means: More savings for your beneficiaries. (Remember to do your CPF Nomination!) | Default plan for everyone. | Lower initial payouts. The payouts increases by 2% yearly to cope with inflation. |
| Best For... | If you'd want to leave some $ for your loved ones. | Yourself | For future needs. |
| Upon Death | Any unused annuity premium (without interest) and Retirement Account savings, will be paid to your beneficiaries upon your death | ||
If you’re still confused, here’s an illustration done up by CPF!
When Do I Need To Choose My Plan?
You can choose your preferred LIFE plan to receive your monthly payouts anytime between the ages of 65 and 70. Members who don’t choose their LIFE plan by age 70 will automatically be placed on the default plan — the CPF LIFE Standard Plan.
How Much Will I Be Getting For My CPF Monthly Payouts?
If you are enrolled in the CPF LIFE Standard Plan, here’s how much you will be getting based on how much you have in your CPF at age 55!
| Retirement Account Savings at 55 | Your monthly payout for life from 65 onwards |
||
|---|---|---|---|
| Basic Plan Age 65 | Standard Plan (Default) | Escalating Plan | |
| Basic Retirement Sum (BRS) in 2022: $96,000 | $750 (Age 65) $750 (Age 85) $680 (Age 95) | $830 | $650 (Age 65) $970 (Age 85) $1,190 (Age 95) |
| Full Retirement Sum (FRS) in 2022: $192,000 | $1,420 (Age 65) $1,420 (Age 85) $1,340 (Age 95) | $1,550 | $1,230 (Age 65) $1,820 (Age 85) $2,220 (Age 95) |
| Enhanced Retirement Sum (ERS) in 2022: $288,000 | $2,080 (Age 65) $2,080 (Age 85) $2,010 (Age 95) | $2,280 | $1,800 (Age 65) $2,680 (Age 85) $3,260 (Age 95) |
These amounts are calculated based on the assumption that you have a CPF LIFE Policy and are born on, or before 1978.
For those born before 1978, you can calculate your estimated payouts using the CPF LIFE Estimator.
How Can I Increase My CPF Payouts?
If you think that these amounts are not enough for you to tide through retirement, you can make cash top-ups or CPF transfers (or both) into your Retirement Account (RA)!
With proper planning, you can also depend on your investment payouts and dividends to further supplement your retirement income.
How Will I Get My $$$?
Monthly payouts will be paid directly into your bank account via Inter-Bank GIRO by the fourth working day of each month.
If the GIRO transfer isn’t successful because you closed your bank account, the money will be paid into your CPF OA for withdrawal.
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