Retirement Guru: Choosing the Right CPF LIFE Plan

Retirement planning is a critical milestone for Singaporeans, and CPF LIFE provides a “pension” with lifelong monthly payouts. However, selecting the right plan requires some thought. Here’s a brief overview of the three CPF LIFE options:

Source: CPF Board Website

1. Basic Plan

• Features: Offers lower monthly payouts initially, which decrease over time as your Retirement Account (RA) savings are depleted. This plan leaves a higher bequest for beneficiaries.
• Best For: Individuals who prioritize leaving a legacy and are comfortable with modest payouts during retirement.

2. Standard Plan

• Features: Provides steady monthly payouts throughout your life. While it ensures financial stability, it does not account for inflation.
• Best For: Those who prefer consistent budgeting and are okay with adjusting spending as prices rise.

3. Escalating Plan

• Features: Starts with lower payouts that increase by 2% annually to address inflation concerns.
• Best For: Retirees who anticipate rising expenses and want to maintain their purchasing power.