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15 Dec 2021

Source: The Straits Times © SPH Media Limited. Permission required for reproduction

Elderly man and young boy grandfather and grandson trying to plant with a bucket of soil and spade bonding activity

 Singaporeans are living longer and healthier. Many of us now see retirement as a new life stage where we can spend more time on our passions and hobbies. The pandemic has made many of us realise the importance of retirement planning.


Mr Oliveiro turns 55 in two months. Now that his children are older, the engineer has found time for a new passion: volunteering at a charity for underprivileged children.

 

As he envisions volunteering being a big part of his golden years, he wants to find out how he can achieve his retirement goal. If he were to switch to working part-time, would he have enough savings to live comfortably during retirement?

 

As a first step, he looks at his CPF savings.

man thinking of CPF savings at age 55

Source: The Straits Times © SPH Media Limited. Permission required for reproduction

Mr Oliveiro has some money in his CPF, which he can withdraw to fund his volunteer projects. But he decides to tap on his cash savings instead as CPF savings earn higher interest.  

 

He knows that he can tap on his withdrawable CPF savings as and  when needed, and receive the money in seconds via PayNow.

CPF top-ups from age 55 to 65

Source: The Straits Times © SPH Media Limited. Permission required for reproduction

Mr Oliveiro continues to work full-time while volunteering on weekends. Whenever he can, he tops up his CPF to earn interest of up to 6% per annum*. This enables him to get higher payouts later. 
Withdraw from CPF account from age 65

Source: The Straits Times © SPH Media Limited. Permission required for reproduction

Mr Oliveiro switches to part-time work to make more time for volunteering. He can choose to start his CPF LIFE payouts. The monthly amount is based on how much he has in his Retirement Account.
Increase in CPF payouts from deferring the starting age of payouts

Source: The Straits Times © SPH Media Limited. Permission required for reproduction

Since he is still earning some income, he decides not to start his CPF LIFE payouts yet. With each year that he defers, his monthly payout will increase by up to 7%.

# No later than age 70. 

Man volunteering at age 67

Source: The Straits Times © SPH Media Limited. Permission required for reproduction

Mr Oliveiro stops working to volunteer full-time. He opts to start his CPF LIFE payouts, enjoying his new purpose without financial worries.


Worry less with CPF LIFE

 

Every Singaporean has CPF, which is the basic building block of a retirement plan. From the time you start work, you have already started saving for your future. The CPF savings you have accumulated will be used to join CPF LIFE, a national longevity insurance annuity scheme that gives you peace of mind to pursue your life’s purpose.

 

1. Payouts for life

 

Most private retirement income products pay out only for a fixed number of years. But with CPF LIFE, monthly payouts are guaranteed for the rest of your life.

 

2. Safe product with high returns

 

CPF LIFE savings enjoy high risk-free returns of up to 6% per annum*. On the other hand, returns from private sector products vary depending on market conditions.

 

3. More affordable

 

As CPF LIFE is a national scheme, the costs and risks are spread out among a larger member pool. You don’t pay for any advertising or agent commissions as the scheme is administered by the CPF Board.

*This includes the extra 2 per cent per annum on the first $30,000 and extra 1 per cent per annum on the next $30,000 of CPF savings for those age 55 and above.

**These figures are based on a member setting aside the 2021 Basic Retirement Sum, Full Retirement Sum and Enhanced Retirement Sum at age 55 without additional CPF contribution.

***Figures are estimates based on the CPF LIFE Standard Plan, for members who turn 65 in 2031, computed as of 2021.

Disclaimer: Mr Oliveiro is a fictional character created for illustrative purposes only.


Information updated as of 15/12/2021