How does the CPF LIFE Basic Plan work?
CPF LIFE Basic Plan is a legacy plan carried over from the time CPF LIFE was first introduced in 2009. Many members would find the Standard or Escalating Plan more suited to their needs. Unlike the CPF LIFE Standard Plan that gives higher and level monthly payouts, the monthly payouts under the Basic Plan are lower and will get progressively lower when your combined CPF balances eventually fall below $60,000. This is because the extra interest is earned on the first $60,000 of your combined CPF balances are credited to the Retirement Account (RA) and paid as part of your monthly payouts. As balances fall due to payouts, the extra interest earned and subsequent payouts will decline as well.
Under the LIFE Basic Plan, about 10-20% of your RA savings will be deducted as CPF LIFE premium when you join CPF LIFE, which can be any time from 65 to 70.
Your monthly payout will first be paid from your RA and is estimated to last until 90. Thereafter, monthly payouts will be paid from your CPF LIFE premium. If your CPF LIFE premium is depleted, you will continue to receive monthly payouts no matter how long you live.