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Understand CPF LIFE and make it work for us. (Size of CPF LIFE payouts depends on a few things.)

Sunday, December 29, 2019

I shared in a recent blog on the possibility of withdrawing my CPF savings from age 55.

I also shared that my plan is really to let my CPF savings grow and to enjoy a monthly income from CPF LIFE from age 65.

Withdrawing CPF savings: How much and how?
(Maximising CPF-SA savings and returns?)

CPF LIFE is an annuity.

What is an annuity?

"An annuity is a series of payments made at equal intervals."
Source: Wikipedia.

"Annuity holders cannot outlive their income stream, which hedges longevity risk."
Source: Investopedia.

So, the money we put in our Retirement Account (RA) which will be created for us at age 55 is used to join CPF LIFE.

CPF LIFE the annuity will pay us a monthly income from age 65 at the earliest for as long as we live.

1. How much we will receive monthly from CPF LIFE will partially depend on how much money we put in our RA at age 55.

Obviously, if we put in more money, we will be able to enjoy a larger monthly income compared to someone who puts in less money.

Think Full Retirement Sum (FRS) instead of Basic Retirement Sum (BRS), for example.

2. How much we will receive monthly from CPF LIFE will also partially depend on when we want to start receiving this stream of lifelong monthly income.

The earliest we can start receiving a monthly income from CPF LIFE is at age 65.

However, we can choose to start the payouts later in life, giving more time for the annuity to accumulate funds.

We can also choose to do nothing and in such an instance, CPF LIFE will start paying us a monthly income when we turn 70.

It follows that CPF LIFE, having five more years to accumulate funds, would be able to pay a higher monthly income to us then from age 70.

3. How much we will receive monthly from CPF LIFE will also depend on the CPF LIFE plan we choose to go with.

We will only have to choose which CPF LIFE plan we want a few months before we start receiving the monthly payout.

Although I already know which CPF LIFE plan I want, things could change later on in life, of course.

I have blogged about the different CPF LIFE plans before and if you are interested in finding out more, go to the related posts at the end of this blog.

For most regular Singaporeans, an annuity is probably the best way to help ensure retirement funding adequacy. 

We should understand what CPF LIFE can do for us and we should make it work for us.

It is really that simple.

If AK can do it, so can you!

Believe it!

Related posts:
1. CPF LIFE Escalating Plan.
2. Which CPF LIFE plan is for me?
3. CPF LIFE payout estimator.


Your Ka-ki! said...


You definitely worry too much and keeps me worry as well. I wish you a good 2020 ahead with more huat and dividends increase so that will keep the BP level down a bit.

AK71 said...


The last time I checked, my blood pressure was OK.

Maybe, it is time for another check. ;)

Thank you for the well wishes.

Wishing you the best in 2020 too. :)

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