What are the CPF LIFE plans available and which is the right plan for me?
There are three CPF LIFE plans available for you to choose from – Escalating Plan, Standard Plan and Basic Plan.
It is important to plan for your retirement with inflation in mind. Assuming you are receiving $1,000 of monthly payouts today, in 20 years’ time, you may need about $1,500 to buy the same items as today. Which plan you choose depends on how willing you are to adjust your retirement lifestyle, as things become more expensive.
If you are worried about the rising costs of living, you can consider the Escalating Plan which provides monthly payouts that start lower initially but grow by 2% every year for life. The growing payouts protects you against inflation and generally helps you maintain your retirement lifestyle. Read more about how the CPF LIFE Escalating Plan works.
If you are willing to live a more modest lifestyle and buy less as years pass, you may find the Standard Plan which provides steady payouts suitable for you. Payouts do not grow to protect you against inflation so you'll have to lower your lifestyle to buy less as things get more expensive in the years ahead. Payouts start higher than the Escalating Plan, but will eventually become lower than the Escalating Plan. Read more about how the CPF LIFE Standard Plan works.
If you don’t mind starting with lower monthly payouts which will be progressively lower later on, then the Basic Plan is good enough. The Basic Plan is a legacy plan carried over from the time CPF LIFE was first introduced in 2009. Compared to the Standard Plan which gives higher and steady monthly payouts, Basic Plan payouts are lower and will get progressively lower when your combined CPF balances eventually fall below $60,000. Read more about how the CPF LIFE Basic Plan works.
In all three plans, you will enjoy payouts no matter how long you live, your premiums will enjoy risk-free CPF interest rates, and any remaining CPF LIFE premium balance will be given to your beneficiaries, together with your remaining CPF savings when you pass on. In other words, you and your loved ones will always get back the premium that you have put into CPF LIFE.