Managing CPF for your retirement

Managing CPF for your retirement

25 Oct 2018 | 3 min. read

CPF savings can help provide for your basic needs during retirement. Learn how to build up your CPF savings, and how much CPF LIFE payouts you may receive.

Key takeaways

  • You can top up your CPF savings for a larger nest egg.
  • CPF LIFE provides a monthly income for the whole of your retirement.
  • If you opt to start your payouts later, you can receive a higher monthly retirement income.

How CPF works

In a nutshell, this is how CPF supports your retirement:

  1. Your CPF contributions accumulate during your working life.
  2. You earn risk-free interest on your CPF savings, at higher rates than from banks. You also earn interest on the interest – a compounding effect that sees your savings grow faster.
  3. When you reach 55 years old, your Special and Ordinary Account savings, up to the Full Retirement Sum (FRS), will be transferred to a Retirement Account. You can withdraw the remaining savings, if you wish, after setting aside the FRS.
  4. If you're born in 1958 or after, and have at least $60,000 in your Retirement Account 6 months before you reach your payout eligibility age (PEA), you will be automatically included in CPF LIFE.
  5. From your PEA, you can opt to start receiving CPF LIFE monthly payouts for as long as you live.

By managing your CPF well, you can be assured of a regular income that covers your basic needs upon retirement.

Learn more: CPF Overview

Building up your CPF savings

The more you have in your CPF accounts, the more income you will have when you retire. It makes sense, therefore, to build up these savings.

You can do this through:

  • Cash top-ups to your Special Account (SA) or Retirement Account (RA) under the Retirement Sum Topping-up Scheme. You can also top up your loved ones' SA and RA.
  • Transferring funds from your OA to your SA, which earns higher interest.
  • Voluntary contributions to your 3 CPF accounts or to your Medisave account as an employee or as a self-employed person.
  • Investing part of your CPF funds, if you have the knowledge and risk appetite for it. Remember that all investments carry the risk of loss. If you are not confident, you should leave your CPF money to draw interest risk-free.

Your CPF LIFE payouts

CPF LIFE payouts are fundamental to a CPF member's retirement plan. If you don't have a retirement plan, your CPF LIFE payouts are even more important.

CPF LIFE payouts would depend on:

  • Your gender and age
  • RA savings used to join CPF LIFE
  • The LIFE plan type you choose
  • CPF interest rates and mortality rates

The premiums and payouts are determined by an independent actuarial consultant.

Here is an estimate of the monthly payout you'll receive at retirement, based on the Retirement Sum set aside at age 55 and the different plan choices:

RA Savings at 55
Your monthly payout for life from 65 onwards

Standard Plan (default plan)

Basic Plan Escalating Plan
Basic Retirement Sum (BRS)
$85,500
$720 - $770
$680 - $700 $550 - $610 (initial amount)
Payouts increase by 2% every year.
Full Retirement Sum (FRS)
$171,000
$1,320 - $1,410 $1,240 - $1,290 $1,010 - $1,110 (initial amount)
Payouts increase by 2% every year.
Enhanced Retirement Sum (ERS) $256,500 $1,910 - $2,060 $1,810 - $1,870 $1,470 - $1,620 (initial amount)
Payouts increase by 2% every year.

Note: These monthly payouts are estimates and computed as of 2018. Payouts may also be adjusted to account for long-term changes in interest rates or life expectancy. Such adjustments (if any) are expected to be small and gradual.

Do you need your payouts yet?

You can choose when, from age 65 to 70, to start receiving your monthly CPF LIFE payouts. For every year you defer being paid, this income increases by up to 7%.

You might want to start your payouts later if, for example, you have other sources of income still, such as from part-time work.

You can use the CPF LIFE Payout Estimator to estimate the monthly payouts you might get. The calculator allows you to select the payouts to start between 65 and 70.

Find out more:

Last updated on 05 Nov 2018