What happens to my Retirement Account savings when I join CPF LIFE?
It is dependent on the CPF LIFE plan you choose. If you opt for the Escalating or Standard Plan, all your Retirement Account (RA) savings will be used as your CPF LIFE premium.
If you opt for the Basic Plan, about 80-90% of your RA savings will be directly used to provide payouts until age 90. The remaining 10-20% will be deducted as your CPF LIFE premium when you join CPF LIFE and used to provide payouts from age 90 for the rest of your life. As less is used for your CPF LIFE premium, the monthly payout will be lower compared to the Standard Plan. The Basic plan payouts will also decrease correspondingly as your balances are withdrawn over time to provide you with monthly payouts and earn less extra interest*.
* The extra interest is earned on the first $60,000 of your CPF balances and is used to increase your payouts.
