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October 2014

What is CPF LIFE?

 

It is a lifelong income scheme for the members. Upon members’ Draw-Down Age (DDA) i.e. of 65 years old, there will be a monthly payout for as long as he or she lives.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

How will CPF LIFE start?

When you reach 55 years old, CPF will create your Retirement Account (RA) using the savings in your Ordinary Account (OA) and Special Account (SA). Based on your choice of plan and the savings set aside in your RA, CPF will deduct CPF LIFE premium in instalments from your RA.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

What are the CPF LIFE plans available? 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1. LIFE Standard Plan

2. LIFE Basic Plan  

 

 

 

 

 

 

A ‘bequest’ is the money that you leave to your beneficiaries after your death.

 

What if I am not placed on CPF LIFE? 

 

You will have to stay on the existing Minimum Sum (MS) Scheme and receive monthly payouts for about 20 years, starting from your DDA. If there is not enough money in your fund to make payouts for 20 years, CPF will let you know. Or, you may choose to join CPF LIFE any time between age 55 and one month before your 80th birthday. 

 

Case Study:

 

Mr. Tan has $100,000 in his RA and will be placed on CPF LIFE.

 

As he chooses the LIFE Standard Plan, CPF will deduct $77,500 (the Minimum Sum Cash Component that applies to him) from his RA as the first annuity premium for his LIFE Standard Plan. The rest of his RA savings ($22,500) will stay in his RA until his DDA.

 

About 1-2 months before Mr. Tan reaches 65 years old, CPF will deduct the rest of his RA savings ($22,500) together with any interest that has built up and any other new money in Mr. Tan’s RA as the second annuity premium for his LIFE Standard Plan.

 

When he reaches 65 years old, Mr Tan will receive a monthly payout of between $822 and $908 for as long as he lives.