If you read a lot about retirement planning, you may have built up some Income Generating Assets such as Real Estate Investment Trusts (REITs) or Retirement Income Plans. But few people talk about CPF Life.


This is not surprising because people tend to associate retirement planning with stock and property investments. Many people believe that “you need one million dollars to retire”, and that is their retirement goals.

But if you dive deeper, you will realise that the solution to your retirement is never about how much money you have or will have, but how much passive income you can receive without working.

Traditionally, if you are worried about running out of money in retirement, the solution was annuity or pension schemes. But with a decade of low-interest rate environment, many insurers have withdrawn their annuity products.

CPF Life becomes one of the best solutions for a lifetime retirement income now. In this article, I will explain to you how CPF Life works and how it complements your other retirement plans.

What is CPF Life

Similar to an annuity insurance, CPF Life is a scheme that essentially converts your CPF savings into a monthly stream of income after you retire. The difference between CPF Life and a retirement income insurance is that retirement income insurance typically has a fixed payout period, but there is no maturity for CPF Life.

Although CPF Life refers to Lifelong Income For the Elderly, it is for everybody. Sooner or later you will have to join this scheme.


You will have to join CPF Life if you are

  • A Singapore Citizen or Permanent Resident
  • Born in 1958 or after
  • Have the following Retirement Account Balances
If you turn 55 between 1 January 2013 & 30 April 2016If you turn 55 on 1 May 2016 and after
  • $40,000 in your Retirement Account when you reach 55 years old; or
  • $60,000 in your Retirement Account when you are near your payout eligibility age.
  • $60,000 in your Retirement Account when you are near your payout eligibility age.

How many plans does CPF Life have

CPF life was launched back in 2008. At that time, the CPF Life scheme offered 12 different plans. Although it offers great flexibility, too many choices always lead to confusions and bad decisions.

So the government decided to pare it down to four, and later to just two plans:

  1. Life Standard Plan – A higher monthly payout, but little left to your family
  2. Life Basic Plan – A lower monthly payout, but your family will get more if you pass away
Two Types of CPF Life Plans
Two Types of CPF Life Plans

How much monthly income can CPF Life generate

When you turn age 55, your ordinary account and the special account will be combined as a “Retirement Account”. Your CPF LIFE monthly payouts would depend on the savings you have in this account.

Before we go into the details, you need to understand one more concept called “Retirement Sum“. Retirement Sum used to be called “CPF Minimum Sum”. It is essential the amount you must have (currently set at $166,000) in your CPF before you can withdraw. You can read this article for more information about Retirement Sum.

Below are the figures projected by CPF based on CPF standard plan and payout age 65. In a nutshell,

  • If you have $83,000 CPF, you will only receive a $700 to $750 monthly payout
  • If you have more, but withdraw all your CPF above $166,000 Retirement Sum requirement, the monthly payout will be $1,280 to $1,380

But you can also allocate more CPF savings into CPF Life. The maximum savings you can put is $249,000 and your monthly payout will be $1,860 – $2,000.

If you are still confused, leave your comment here and I will answer all of them.

Retirement Account savings required at 55Your monthly payout* for life from 65
If you own a property and choose to withdraw your Retirement Account savings above your Basic Retirement Sum (subject to sufficient CPF property charge/pledge)Basic Retirement Sum (BRS)
$700 – $750
If you do not own a property or choose not to withdraw your Retirement Account savings above your Basic Retirement SumFull Retirement Sum (FRS)
$1,280 – $1,380
If you wish to put more savings in CPF LIFEEnhanced Retirement Sum (ERS)
$1,860 – $2,000

*Payout figures are estimates, based on the CPF LIFE Standard Plan and computed as of 2017.

Why you need to care about CPF Life

Just because CPF Life is compulsory, many people do not bother to understand it. You may feel that you can’t do anything about it anyway.

This is a huge mistake.

#1 You may not have enough CPF to convert

I mentioned earlier that the monthly payout of CPF Life is from your own CPF savings. But if you don’t have sufficient CPF to begin with, you simply won’t have the monthly income which you need.

How come your CPF is not enough?

The problem is that many Singaporeans have jeopardised their own retirement by diverting too much retirement savings into properties. Have you used most of your CPF to pay your mortgage loans?

A physical property gives us an illusion of wealth, but if it can’t generate a stream of income, it can’t help your retirement at all.

#2 You will face tough decisions in the future

A recent change to CPF Life gives you the option to choose your plans only when you wish to start your monthly payouts. You can do so anytime between age 65 (payout eligibility age) and 70.

But if you haven’t done your retirement planning right, you simply won’t have a stream of retirement income after you retire.

Just ask yourself, since CPF Life payout only kicks in at age 65. what passive income can you depend on if you want to retire at age 55?

Your ideal retirement income stream should be something like this:

A sample retirement income planning which I have done for my client
A sample retirement income planning which I have done for my client

As you can see, the payout from CPF Life is only a portion of the retirement income you really need.

If you are serious about your retirement…

Let me iterate this. The secret of retirement is NOT to learn an investment strategy, to buy an insurance product, to invest an index fund or save a million dollars.

The only thing you need is to build your income sources which are greater than your expenses.


Since CPF Life has only provided a foundation for your retirement income, here are the next steps for you:

  1. Set a SMART retirement goal
  2. Allocate your financial resources to build your Income Generating Assets (IGAs)
  3. Start taking passive income (dividends, coupon, etc) today, no matter how small it is.

Retirement planning can be intimating yet scary. As an independent financial adviser, I can help you navigate through the uncertainty and build sustainable retirement incomes.

If you are keen to find out more, click here for a non-obligatory retirement discovery meeting.

About the Author

Ivan Guan is the author of the popular book "FIRE Your Retirement". He is an independent financial adviser with more than a decade of knowledge and experience in providing financial advisory services to both individuals and businesses. He specializes in investment planning and portfolio management for early retirement. His blog provides practical financial tips, strategies and resources to help people achieve financial freedom. Follow his Telegram Channel to join the FIRE community.
The views and opinions expressed in this article are those of the author. This does not reflect the official position of any agency, organization, employer or company. Refer to full disclaimers here.

  • Hi,
    If I maximised my CPF life to $249,000 and have monthly payout of $1,860 – $2,000 as mentioned by you,
    will the Life standard plan and Life Basic plan be available/applicable ? Especially Life Basic plan where we can leave behind more for our family

    • Hi, Kwok Fei,

      Please note the estimated monthly payout of $1,860 – $2,000 is based on the standard plan. If you choose the basic plan for legacy, the monthly payout will be much less.

  • Hi Ivan,

    At age 55, CPF board deducted $142,941.00 from my CPF account.
    I was born in 1957, what is the CPF Life payout per month at 65 will be.

    Best Regards

  • Hi, someone advised to pick basic plan is better. Why is that so? Also, is the cpf life payout for as long as you live or only up to 80. Thank you

  • -As PR aged 53years can I TOP Up my CPF special account by paying in cash to any extend in one go or there is a limit ?
    – would I be eligible to receive payout of 1800-2000 sgd if I have SGD266k in my SA & OA at age 55 for life?
    – Will I be eligible even if I am living abroad?
    – What happens if I renounce my PR?
    Sorry to expect so much but I want take a informed decision. Thanks in anticipation.

    • Dear Sharat,

      You can call CPF to get the most accurate answer based on your particular circumstance. But I will try to answer your questions in general circumstance:

      There is a CPF cash top up limit for tax relief purpose, you can check out the details here.

      Your OA and SA will be merged into a Retirement Account when you are age 55. If you have $266K balance, you can convert $249,000 into CPF Life Standard Plan and get $1,860 – $2,000 based on CPF’s projection.

      If you renounce your PR status, you can technically make a full withdrawal of your CPF.

      If your withdrawal application is approved and you are covered under the CPF LIFE Standard or CPF LIFE Basic Plan, you will be given two options:​

      1. Terminate your LIFE policy and receive a refund of the unused premium.
      2. Retain your LIFE policy under the CPF LIFE Scheme, and you can start receiving monthly payouts from your payout eligibility age​ for as long as you live. You will need to have a Singapore personal /joint bank account for us to credit your monthly payout.
      • Thanks Ivan,
        I understand that tax relief is limited 7k only,
        However can I deposit any amount in my SA , say sgd 250k at one go?

        • Hi, Sharat

          There is a CPF annual limit of $37,740 currently. It means the sum of your compulsory CPF contribution from your employment and your voluntary contribution cannot exceed this figure per year.

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