What is CPF LIFE?
The CPF LIFE scheme or annuity plan, or CPF Lifelong Income For the Elderly, is a national longevity insurance annuity scheme launched by the Singapore Government in September 2009, to insure Singapore citizens and Permanent Residents (PRs) against running out of your retirement savings, by providing you with a monthly payout from age 65, no matter how long you live.
Why Do We Need CPF Life?
You usually know how much you have saved, but usually, you would not know how much of your savings you need for living expenses monthly because no one can actually predict how long they can live. This is a dilemma: what if you spend too much, and do not have enough if you live a long, happy life? What if you spend too little, and deprive yourself from enjoying your hard-earned savings?
To add to the complexity, you are more than ever likely to live longer than the past generations with rapid advances in healthcare technology. That means you cannot predict how long you will live just by looking at past data. As a result, most people underestimate their lifespans and find their savings depleted with many more years to live.
That is why the Singapore government created CPF LIFE, to give all Singapore citizens and permanent residents peace of mind when they retire, by providing them with a monthly payout no matter how long we live.
What Are the Benefits of CPF Life?
CPF LIFE provides you with monthly retirement payouts no matter how long you live. It is also a safe product that is guaranteed by the Singapore Government, with returns of up to 6% per year.
As CPF LIFE is administered by the CPF Board which is non-profit, it does not incur costs such as advertising. As well, longevity risks and costs can also be better managed with a large member base.
The Singapore CPF LIFE payouts are also not taxable.
How Does CPF Life Works?
(1) Who Is Eligible for CPF LIFE?
You will receive a letter from the CPF Board one month after you reach age 55 to inform you if you are placed on CPF LIFE and inviting you to choose between the LIFE Standard Plan and LIFE Basic Plan. You will be given up to 6 months to choose your preference, and if you do not make a choice, you will automatically be placed under the LIFE Standard Plan.
Generally, you will be automatically included if you are a Singapore citizen or PR born in 1958 or after, and have at least SGD60,000 in your CPF retirement savings before you reach 65. If you are a Singapore citizen or PR who does not meet the criteria, you can still choose to join the scheme at any time from age 65 to one month before you reach 80 years old.
(2) Is CPF LIFE Compulsory?
Although all CPF members are automatically included into the scheme, if you have a commercial annuity product from a private insurer which pays out the same or higher monthly payout for life, you can apply to be exempted from the plan and withdraw your CPF retirement savings.
If you are not automatically included, or you have applied to be exempted from it, you will remain on the Retirement Sum Scheme and you will still receive monthly payments from your payout eligibility age until your retirement savings are fully used up. If subsequently you want to join the plan, you have until one month before your 80th birthday. You can submit an online request.
CPF members with health problems such as an illness which renders you permanently unfit from ever continuing in any employment or are terminally ill may be exempted if they qualify under the Medical Ground Scheme (MGS).
(3) When Will I Start to Get My CPF LIFE Payouts?
By default, you will start to receive the monthly payouts at the age of 65. However, if you wish to increase your payouts, you can defer the starting age up to age 70. This gives your retirement savings up to 5 more years to grow in your CPF.
(4) How Long Is the CPF LIFE Payouts?
Once you are enrolled, a part of the cash savings in your RA will be set aside as the premium for an annuity. The premium will earn CPF interest rates of up to 6%, which includes an extra interest of up to 2% from the Government.
Your payout per month will first be paid from your premium (applicable to the CPF LIFE Standard and Escalating plans, see below for details of plan). Together with your remaining cash savings, you will get a lifelong income every month from your Draw Down Age* (DDA). No matter what age you live up to, you will always receive a monthly payout, and it is guaranteed for life after the age of 65 years old.
(5) What Is the CPF LIFE Interest Rate?
CPF LIFE provides interest rates of up to 6% per year to CPF members aged 55 and above, including the extra 2% interest on the first SGD30,000 of their combined balances, capped at SGD20,000 for the Ordinary Account, and an extra 1% on the next SGD30,000.
What Are the CPF Life Plans Available?
So, which CPF LIFE plans are available, or which plan is better for you? It’s very important for you to decide on the kind of retirement lifestyle you want before choosing the right plan for yourself. Here are the three types of government annuity schemes available to you.
(1) Escalating Plan
The CPF LIFE Escalating Plan is the one for you, if you are worried about things getting more and more expensive in future. It pays you monthly, starting at SGD1,000 when you are 65 years old, and it increases by 2% every year for life. This protects you against inflation and increasing prices, and you could generally maintain your standard of living even if prices rise over the years, which they most likely would.
(2) Standard Plan
The CPF LIFE Standard Plan is the default plan, and it provides a higher level of payout per month but leaves a lower CPF LIFE bequest. It is for those who wants to keep within a fixed budget as it has a level monthly payout. If you think you can cope with rising prices in the future by cutting down on your expenses and living a more modest lifestyle, then this plan is for you. If you join with the same CPF LIFE premium as the Escalating Plan above, your payouts will start higher than the Escalating Plan, but it will remain the same for the rest of your life and will become lower than the payouts for the Escalating Plan.
(3) Basic Plan
The CPF LIFE Basic Plan provides a lower payout per month, but leaves a higher CPF LIFE bequest. It is for those who do not mind starting with lower payouts every month, which will progressively get lower as the years pass by, and when your combined CPF balances fall below SGD60,000. This is because the extra interest that is earned on the first SGD60,000 of your combined CPF balances are credited to the RA, and paid as part of your payouts every month. As balances fall due to payouts, the extra interest earned and subsequent payouts will fall too.
When you join this plan, CPF will deduct about 10% to 20% of your RA savings as CPF LIFE premium, which can be any time from 65 to 70 years old. The payout you receive every month will first be paid from your RA, and will last to about 90 years old. After that, the monthly payouts will be paid from your CPF LIFE premium, and you will continue to receive your payouts no matter how long you live, even if your CPF LIFE premium is depleted.
For all the three plans, no matter how long you live, you will enjoy monthly payouts, and upon death, any premium balance, together with your remaining CPF savings, will be given to your beneficiaries.
How Much Will I Receive in Monthly Payouts?
If you have already chosen your CPF LIFE plan, how much you will receive every month will depend very much on how much you have in your RA when you join the scheme. The more savings that you used to join this scheme, the higher your payouts will be. Other factors that will affect your monthly payouts include your gender and age, the plan type you choose and CPF interest rates and mortality rates. An independent actuarial consultant will determine the premiums and payouts.
You can increase your payouts by topping up your RA, up to the Enhanced Retirement Sum or you can defer your payout date until the age of 70 years old because for every year that you defer, your payouts will increase by up to 7%.
You will get the monthly payouts directly into your desired bank account.
Annuity Payout Estimator
How much will you receive in monthly CPF LIFE payouts? You can use the CPF LIFE Estimator tool to find out the amount of premium needed to achieve your desired monthly payout under your selected plan. This tool is designed specially to help CPF members between age 55 and 79 estimate their monthly payouts based on their desired retirement lifestyle. This CPF LIFE calculator will take approximately 5 minutes of your time.
Here’s also an article which will give you more information on the amount of payouts you will receive.
| Retirement Sum | RA at age 55 (SGD) | Monthly Payout @ 65 | Monthly Payout @ 70 |
| Basic | 106,500 | SGD840 – 900 | SGD1,120 – 1,210 |
| Full | 213,000 | SGD1,590 – 1,730 | SGD2,120 – 2,290 |
| Enhanced | 426,000 | SGD3,080 – 3,330 | SGD4,080 – 4,420 |
You should use the CPF Board’s official calculator for personalised estimates.
What Is the Difference between the Retirement Sum Scheme and CPF LIFE?
The main difference between the Retirement Sum Scheme and CPF LIFE is that for the former, the interest is paid into your RA balances. For the latter, funds that are contributed to the scheme earns an interest that is paid to your Lifelong Income Fund, and this fund is meant to continue providing you with monthly payouts.
Can I Top Up My CPF LIFE?
If you are age 55 and above, you can top up your RA to the prevailing Enhanced Retirement Sum every year with either CPF savings or cash. In this way, you can receive higher monthly payouts.
Can I Change My CPF LIFE Plan?
You cannot change your CPF LIFE plan as this will affect the payouts of other CPF members on the scheme. But you have a free look period of 30 days to change your plan type. If you change your mind within 30 days from the date of your policy letter, you can submit a request to CPF on their website. After 30 days, you cannot change anymore, or withdraw from the Scheme.
If you are on a legacy plan such as the Basic, Balanced, Plus or Income plans which were introduced before 2013, you can switch to Standard or Escalating plans before age 80 by making a request.
Can I Cancel My Plan After I Join?
You can cancel your CPF LIFE plan after you join, for the following reasons, and upon cancellation, you will receive a refund of your premium balance. If your premium has been fully paid to you as monthly payouts, you will not get a refund as there will be no remaining balance left.
- You have to get a certification from an accredited doctor to certify that you have a reduced life expectancy due to a medical condition, is permanently unfit for work or has a permanent lack of mental capacity.
- You are going to leave or have left Singapore and West Malaysia permanently and do not intend to return for work or to live.
- You are a Malaysian citizen and have left Singapore permanently to live in West Malaysia.
- You are fully exempted from setting aside the retirement sum in your Retirement Account because you are receiving a monthly pension / annuity payout.
CPF LIFE vs Private Annuities: Key Differences
| Feature | CPF LIFE | Private Annuity Plans |
| Returns | Up to 6% risk-free | ~2% guaranteed, variable extras (source) |
| Payout Age | Starts at 65 | Flexible, can start earlier (often 55) |
| Payout Duration | Lifetime | Usually fixed term; some offer lifetime |
| Flexibility | Government-set limits | Customisable premiums, payout terms |
| Risks | Virtually risk-free, government-backed | Subject to investment risk |
| Policy Change Impact | Possible due to future government adjustments | Insurer’s terms and market returns apply |
CPF LIFE generally offers higher payouts for the same funds, but less flexibility and earlier payout options than private annuities.
Is CPF LIFE Enough for My Retirement?
CPF LIFE alone might not be enough for your retirement, especially if you wish to maintain the same standards of living while you were still in the workforce. Of course, other than CPF LIFE, there are many ways you can invest in order to grow your retirement income. Some good options to consider are retirement or investment plans that can help you design your own desired retirement lifestyle, with the flexibility to let you decide when you want to retire and how much you wish to receive upon retirement. You can also choose to invest in other instruments such as properties, stocks, gold or others. You can always reach out to an experienced financial advisor to help you.
* Age at which members are allowed to withdraw their CPF savings in the form of monthly payouts. The DDA for members who turned 55 from 1999 to 2004 is 62. This has been gradually increased to 65 for those who will turn 55 in 2009.
Common Misconceptions About CPF LIFE
- Not all CPF members receive the same payout; amounts depend on Retirement Account savings, chosen plan, age, and gender. For more information, click here.
- There is no fixed minimum sum required to join CPF LIFE, but higher Retirement Account balances yield larger payouts.
- You have a 30-day window to change your CPF LIFE plan after joining; some older legacy plans allow switching to new Standard or Escalating plans before age 80.
- CPF LIFE monthly payouts are not taxable in Singapore, but overseas retirees should check local regulations.
- Payments are designed to be lifelong, but payout amounts may adjust in response to life expectancy and interest rates over time.
5 Mistakes to Avoid with CPF Withdrawal and Planning
(1) Planning Finances Around a Large Lump-Sum Withdrawal at 55 Without Considering CPF LIFE Restrictions
Many Singaporeans mistakenly believe they can withdraw all their CPF savings at 55 and plan major expenses like property purchases or overseas relocation based on this expectation. In reality, most funds at 55 are committed to the Retirement Account and CPF LIFE monthly payouts begin only from age 65. Not understanding CPF LIFE may leave retirees unable to access the funds they expected in a single sum, potentially derailing their financial plans at a critical point.
(2) Not Meeting Full or Basic Retirement Sum Requirements Before Applying for Withdrawals
Withdrawals above certain limits are only allowed after setting aside the Full Retirement Sum (FRS) or Basic Retirement Sum (BRS) in the Retirement Account. Some retirees discover too late that they have not met these requirements, resulting in rejected or delayed applications and forced adjustments to their retirement plans. Planning ahead using the Retirement Dashboard and CPF calculators can help ensure smooth withdrawals and sufficient monthly payouts.
(3) Neglecting Long-Term Inflation Impact on Fixed Standard Plan Payouts—Consider the Escalating Plan If Feasible
Choosing the CPF LIFE Standard Plan means accepting fixed monthly payouts that do not adjust for inflation over decades. While initially higher, these payouts may lose real value as living costs rise, potentially impacting the retiree’s lifestyle and financial security. Consider the Escalating Plan, which provides yearly increases and better protects against price hikes in essentials like healthcare and food.
(4) Failing to Review Available Plan Options and Not Leveraging Top-Ups for Higher Payouts
Many CPF members stick with the default plan or miss opportunities to increase their future payouts by topping up their Retirement Account with cash or CPF savings. Regular reviews and strategic top-ups can significantly boost monthly income and strengthen long-term financial security. Proactive financial planning—ideally starting at least five years before turning 55—can help retirees take full advantage of CPF LIFE’s benefits.
(5) Relying Solely on CPF LIFE for Retirement Income Without Supplementary Private Savings or Investments
CPF LIFE offers security, but it may not be sufficient for retirees who want to maintain their working lifestyle or cover unexpected expenses, such as medical emergencies or travel. Sole reliance on CPF may result in financial shortfalls as costs rise; supplementing with private savings, investments, or insurance plans ensures a robust retirement income.
Practical Financial Planning Tips for CPF LIFE
- Use the official CPF LIFE Estimator tool to simulate expected monthly payouts based on your Retirement Account balance, chosen plan, and payout start age.
- Consider topping up your CPF Retirement Account with cash or CPF savings to boost future payouts and enjoy tax relief.
- If not in urgent need of retirement payouts, delay the start date up to age 70 to increase your monthly payout by up to 7% per year deferred.
- Regular, small top-ups to your Special or Retirement Account can leverage compound interest for higher future payouts.
Got More Questions About CPF LIFE?
You’re not alone — and we’re here to help. Our experienced financial advisers (with over 10 years of experience in the field) can guide you through your CPF LIFE options, so you can make informed decisions for a secure retirement.
Reach out to us at hello@vivacityasia.com for a free consultation — no jargon, just answers that make sense.