We all need to have a retirement plan. The earlier we start working on our retirement plan, the easier it will be for us to build a nest egg for ourselves in our golden years.
In Singapore, the government has also done its part – requiring us to contribute a significant chunk of our salaries into our CPF accounts meant to save for our retirement, as well as our homes, investments and medical care. In addition, it also implemented CPF LIFE, which provides us a monthly payout in our retirement.
Read Also: 1M45: Reaching $1 Million In Our CPF By Age 45 – This Is How We Did It
What Is CPF LIFE?
CPF LIFE is short for CPF Lifelong Income For the Elderly. Administered by the government, CPF LIFE is a life annuity scheme providing Singapore Citizens and Permanent Residents (PRs) the security of a monthly payout for their lifetime.
When we turn 55, a new Retirement Account (RA) will be created for us – and our Special Account will be closed. Savings from our OA and our SA will be transferred to our RA, up to the Full Retirement Sum (FRS) of $213,000 in 2025.
These funds will sit in our RA, collecting interest returns, until we are ready to enter CPF LIFE from as early as when we turn 65 or up till the point that we turn 70.
Read Also: Retirement Planning In Singapore: How Much Do I Need To Save And Invest To Retire At Age 55?
How Much Do I Have To Set Aside At 55?
When we turn 55, we can choose from three levels of retirement sum to set aside in our RA – the Basic Retirement Sum (BRS), Full Retirement Sum (FRS) and Enhanced Retirement Sum (ERS). In 2025, the FRS is $213,000, the BRS is half this amount at $106,500 and the ERS has been enhanced to 2 times the FRS at $426,000.
Read Also: Here’s What Your CPF Full Retirement Sum Might Look Like When You’re 55
As mentioned, up to $213,000 will be transferred from our combined balances in our SA and OA when we turn 55 to meet our FRS. If we are able to pledge a property that we own, we can opt to contribute only the BRS. Of course, if we wish to receive higher payouts in our retirement, we can also opt to go with the ERS instead.
We have to also note that these figures are not static and they increase each year. They will rise every year to account for inflation and rising standard of living. To help us put in place plans to meet our desired retirement sums, the government has made known the amounts until 2027.
| 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 | $256,500 |
| 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 | $308,700 |
| 1 January 2025 | $106,500 | $213,000 | $426,000 |
| 1 January 2026 | $110,200 | $220,400 | $440,800 |
| 1 January 2027 | $114,100 | $228,200 | $456,400 |
Any remaining balances in our OA above the retirement sum that we opt to go for can be withdrawn from our CPF accounts when we turn 55. Of course, we can still let our funds sit in our OA account to continue paying for our home loans, if we have one, while continuing to earn an interest return.
Regardless of the shortfall of our CPF balances to fund our RA when we turn 55, we can still make a withdrawal of up to $5,000 from our combined OA and SA balances.
Remember, from 2025, those who turn 55 will also have their SA closed down. This means that any CPF contributions from their that were supposed to go into their SA will now go into their RA. For those who have already saved their retirement sum, this amount will instead go into their OA.
Read Also: Where Will Monthly Special Account CPF Contributions Go For Employees Above 55 Once It Closes?
How Much Interest Do We Earn In Our Retirement Account?
When our OA and SA balances are transferred into our RA at 55, we continue to earn interest on our RA savings until they are put into the CPF LIFE scheme when we turn 65.
In the meantime, the first $30,000 of our balances earn an interest of 6.0% pa, the next $30,000 of our balances earn at interest of 5.0% p.a. and our remaining balances above $60,000 earn 4.0% p.a.
What Are The CPF LIFE Plans Available?
There are three types of CPF LIFE plans – Standard Plan, Basic Plan and Escalating Plan.
On the Standard Plan, we are opting to receive a higher monthly payout each month. This plan is most likely to maximise our CPF LIFE contributions.
On the Basic Plan, we are opting to receive a lower monthly payout each month. By receiving lower monthly payouts, we are effectively choosing to leave behind a larger bequest amount to our loved ones when we pass on. This is why it is labelled as more for our loved ones.
Read Also: Standard Or Basic Plan? What You Need To Understand About CPF LIFE Plans Before Deciding
On the Escalating Plan, introduced in 1 January 2018, we are choosing to start off with a lower amount and receiving monthly payouts which increase by 2% yearly. This is to help offset ongoing inflation and rising standard of living in our retirement.
Source: CPF
You do not have to choose the plan you want to go on when you turn 55. You will be asked by CPF again closer to your 65th birthday or when we choose to start receiving our CPF LIFE payouts.
How Much Will I Receive In Monthly Payouts?
Depending on the retirement sum we choose to contribute to CPF LIFE and the plan we opt to go on, we will receive between $750 and $1,850 in monthly payouts. Below is an approximate monthly payout plan.
Read Also: Retirement In Singapore: Calculating How Much You Really Need
| Retirement Account At Age 55 | What Your Retirement Account Will Grow To By Age 65 | Standard Plan (Default) | Basic Plan | Escalating Plan |
| Basic Retirement Sum (BRS): $106,500 | $160,000 | $900 (for life) |
$820 (up till age 95, when payouts drop to $750) |
$710 (Initial amount, and payouts increase 2% every year) |
| Full Retirement Sum (FRS): $213,000 | $315,000 | $1,700 (for life) |
$1,560 (up till age 95, when payouts drop to $1,480) |
$1,340 (Initial amount, and payouts increase 2% every year) |
| Enhanced Retirement Sum (ERS): $426,000 | $625,000 | $3,310 (for life) |
$3,020 (up till age 95, when payouts drop to $2,950) |
$2,610 (Initial amount, and payouts increase 2% every year) |
Source: CPF LIFE Monthly Payout Estimator
Read Also: Retirement Planning Beyond CPF LIFE: Here Are 3 Other Ways To Supplement Your Monthly Income
When Do I Start Receiving My CPF LIFE Payouts?
When we turn 65, we will start receiving our CPF LIFE payouts credited into our bank account each month.
We can also choose to defer payments up to the time we turn 70 years old. This is to enable our funds to continue compounding by earning interest of up to 6.0% p.a. According to the CPF website, we stand to receive up to 7% more in payouts per year for each year we defer receiving CPF LIFE payouts from 65 to 70 instead.
Read Also: Retirement Planning In Singapore: 3 Lesser-Known Facts About CPF LIFE
What Happens To My CPF Life Contributions If I Pass On?
We will never take out of the CPF LIFE less than what we put into the scheme.
User Question On JustAsk: I Have Set Aside The CPF LIFE Full Retirement Sum. What Happens To The Rest Of My Monies And Earned Interest If I Pass On One Year After Receiving My CPF LIFE Payouts?
Consider this scenario, we put in $213,000 in our RA at age 55. This should increase to a minimum of $315,000 by the time we turn 65. In fact, it could be slightly more, at around $333,000 if we take into consideration earning the additional 1% interest on our first $60,000 in CPF balances and extra additional 1% on the first $30,000 of CPF balances after we turn 55.
If the entire amount goes into our CPF LIFE scheme, we will receive a monthly payout of approximately $1,700. If we were to pass on after receiving just one monthly payout, our loved ones would be bequeathed with the amount we contributed to CPF LIFE, minus any payouts we receive. In our example, this will amount to $315,000 – $1,700 = $313,300.
If we only pass on when we turn 83, or close to the average life expectancy in Singapore, we would have received nearly $367,200. In this scenario, we will unlikely leave behind any bequests to our loved ones as this is more than the $315,000 we initially put into CPF LIFE.
Note that we do not take into consideration interest returns on the amounts put into CPF LIFE for these computations. This is because the interest earned on our retirement funds contributed into CPF LIFE is already factored into the monthly payouts that we receive.
Secondly, when we start receiving CPF LIFE payouts, we are first drawing down from what we contributed to CPF LIFE in the first place. After this amount has been exhausted, our lifelong monthly payouts will be drawn from the pooled interest that we and other CPF LIFE members have accumulated.
Source: CPF
More Beginners’ Guides To Check Out
Here are some other useful beginner’s guides that you might also be interested to read:
[Beginners’ Guide] Buying Insurance In Singapore
[Beginners’ Guide] Fresh Graduates’ Guide To Starting Work In Singapore
[Beginners’ Guide] How To Start Trading In Singapore
[Beginners’ Guide] How To Start Investing In Singapore
[Beginners’ Guide] Buying A Property In Singapore
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