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11 October 2023

SOURCE: DollarsAndSense

Young child's and father's hands planting young plant

As one of the richest countries in the world on a GDP per capita basis, it’s likely that wealth transfer is a conversation many families would have. Many older Singaporeans might want to “leave some money behind” for the next generation and consider this their legacy.

What is a legacy?


A legacy can mean many things. Often, it is seen in the form of financial assets left to someone in a will – HDB flat, savings and investments, insurance policies, and CPF savings we leave behind upon our passing. These financial assets give our children (or grandchildren) a leg up in life, or something (like a house) they can remember us by.

Leaving a legacy via CPF


This might be why some Singaporeans choose to withdraw a lower monthly payout from their CPF by opting for the CPF LIFE* Basic Plan at age 65. Among the 3 CPF LIFE plans, the Basic Plan provides a lower monthly payout. As such, since a lower amount is withdrawn each month, there could be more left behind for beneficiaries.


[*CPF Lifelong Income For the Elderly (CPF LIFE) is a longevity insurance annuity scheme that allows us to not worry about outliving our savings. Even if we withdraw a higher amount each month by choosing the CPF LIFE Standard Plan or Escalating Plan, CPF LIFE will continue providing payouts no matter how long we live. Additionally, the CPF LIFE Escalating Plan provides an annual increase of 2% in payout to cope with rising prices.]


The CPF LIFE Basic Plan is a plan that existed when CPF LIFE was first introduced in 2009. The payouts get progressively lower when one’s combined CPF balances fall below $60,000, as the extra interest earned is credited to your Retirement Account (RA) and paid as part of monthly payouts. As balances decrease due to payouts, the extra interest earned, and subsequent payouts will also decrease.


For example, a 55-year-old female who sets aside the Full Retirement Sum of $198,800 (as of 2023) at 55, can receive monthly payouts of about $1,410 under the Basic Plan from age 65. However, by age 95, the monthly payout will be reduced to $1,390.

Screenshot of CPF LIFE Estimator

One important misconception to highlight, is that in choosing the Basic Plan, it doesn’t guarantee a larger amount of CPF savings for your beneficiaries. In fact, as we live longer, it is likely that you will exhaust your CPF savings and premium balances, leaving no inheritance under any of the three CPF LIFE plans.


In such cases, selecting the Basic Plan might not be the best choice, especially considering that you would have received lower payouts as compared to your peers who have selected the Escalating and Standard Plans.


The most useful feature of CPF LIFE is that members will enjoy lifelong payouts on all CPF Life plans regardless of how long they live, so there is no need to worry about outliving your CPF savings. This lifelong payout feature of CPF LIFE is vital, especially since Singaporeans now live longer than before with the advancement of healthcare.


However, leaving a legacy could also extend to non-monetary items such as parents’ belief and values. These may include learning from our parents how they manage money and skills on how to save and invest. These valuable life lessons can give children a feeling of security and continuity as they can be applied in life and passed down to future generations.


It is often assumed that our children want us to leave them financial assets when we pass on. But what exactly are the thoughts of young Singaporeans’ when it comes to their parents leaving a financial legacy for them?


In this third and final article of our three-part content series, DollarsAndSense spoke to a few Singaporeans who are in their 20s and 30s to find out what they think about receiving a financial legacy from their parents, and if they think that this is important.


Read part 1: Singapore retirees share how they maintain their lifestyle amid inflation


Read part 2: Do Singaporean retirees really spend lesser during retirement? Here’s what we found out

A legacy can be a safety net, but older Singaporeans should ensure they have enough for their own needs first


Charles, 35 (not his real name), feels that Singapore is becoming one of the most expensive cities to live in, and for parents who can afford to leave a financial legacy (e.g. property, inheritance) for their children, this would provide a safety net.


For Charles, his mom bought him an insurance policy at a young age, and now that the policy has matured, he has the flexibility of withdrawing funds from the policy to help him with his big-ticket purchases such as a property and home renovation. There is also an inheritance that both he and his sibling could receive in the future.


However, Charles shared that “it’s vital for older Singaporeans to ensure that they have enough for their own retirement before worrying about leaving a financial legacy to the next generation which (to him) is a good-to-have.”

One should take ownership over their own retirement

Aaron, 32 (not his real name), believes that “while parents do not have to leave something substantial behind for the next generation”, it would be ideal if “the next generation isn’t left worse off.”


He feels that “the next generation’s financial future is their own responsibility, and that they shouldn’t depend on being left with a financial legacy”. By ensuring that they have enough for their own retirement, their adult children would not become “sandwiched” in having to care for both their parents and their young.


This is why, Aaron, whose mom is a homemaker and whose dad is retired, has no expectation for his parents to leave him a financial legacy. He would rather that his parents spend all the money they have during their lifetime, without leaving any debts for him and his sibling.

A legacy goes beyond just financial assets

Agreeing with Aaron that parents should focus on planning for their own retirement instead of worrying about leaving a financial legacy for their children is Brenda (not her real name), a 22-year-old university student. She thinks that “it would be good if they (her parents) set aside funds for their own retirement as it takes some of the pressure off my shoulders.”


For Brenda, she finds that it’s important for parents to impart their financial knowledge to their children. By sharing their valuable experiences and wisdom, the young would inevitably be more financially savvy.

Leaving a non-financial legacy should be your priority during retirement

According to the younger Singaporeans we spoke with, they prefer their parents to have enough for their own retirement, either via CPF LIFE payouts and/or other income sources, rather than for their parents to worry about leaving a financial legacy for them.


And, as underlined by Brenda, parents should focus on sharing their financial knowledge, experiences, and wisdom with their children. By helping them cultivate good financial habits, parents can empower their children to lead financially healthier lives.

Rethinking your retirement journey: Choosing the right CPF LIFE plan for your ideal lifestyle

Since all CPF LIFE plans provide lifelong payout, the key to choosing your CPF LIFE plan lies primarily in your preferred type of lifestyle. With the cost of living expected to increase in our retirement years, it is also important to consider how willing you are to adjust your lifestyle as things become more expensive. The Escalating Plan is designed to help you maintain your preferred standard of living with monthly payouts that increase by 2% yearly. The Standard Plan requires you to embrace a fixed budget with level payouts, potentially leading to future reductions in your lifestyle as the cost of living rises over time. With the Basic Plan, you’ll need to adjust your lifestyle to buy even lesser as payouts gradually decrease in the future. For retirees who are already on the Basic Plan, you can still switch to the Escalating Plan or the Standard Plan, even after the 30-day grace period of your selected CPF LIFE plan.

Elevating your retirement by seizing the day to build a legacy of prosperity

In essence, securing your financial future in retirement not only liberates you from dependence on your children but also empowers them with newfound financial freedom.


This journey offers your children a wealth of advantages: from reduced stress and enriched relationships to an elevated quality of life, the potential to leave behind a legacy of generational prosperity, freedom of choice, and peace of mind.


Start today to seize each day to create treasured memories with your family, as these memories will transcend time, serving as an enduring legacy for generations yet to come. And as shared by Brenda, “If you give a man a fish, you feed him for a day. If you teach a man to fish, you feed him for a lifetime.”

This article was written in collaboration with CPF. All views expressed in this article are the independent opinion of based on our research. is not liable for any financial losses that may arise from any transactions and readers are encouraged to do their own due diligence. You can view our full editorial policy here.


This article was first published on Dollars and Sense. Information in this article is accurate as of date of publication.