For most Singaporeans and permanent residents (PRs), CPF LIFE payouts forms your basic monthly income during your retirement. The exact CPF LIFE payout you eventually receive is computed based on your CPF Retirement Account (RA) balance and the type of plan you choose to go on – Basic Plan, Standard Plan or Escalating Plan.
How much you have in your RA is dependent on your mandatory contributions to your CPF Special Account (SA) and Ordinary Account (OA) during your working years.
The bigger the amount you have in your RA, the greater your monthly CPF LIFE payouts will be.
One easy way to boost your retirement nest egg is to make voluntary contributions to your SA. The amount we contribute will go directly into our SA (or RA if we are aged 55 or above), earning us a risk-free interest of at least 4% per annum. In addition to this, we also enjoy a tax relief of up to $14,000 per year when we tap on the Retirement Sum Topping Up (RSTU) Scheme on contributions to our and our loved ones’ CPF accounts.
The drawback is that CPF LIFE monthly payouts only start from age 65. If we intend to retire earlier, we can’t count on our CPF LIFE payouts for our living expenses until you turn 65.
In addition, any voluntary top-ups you make into your CPF account today is also irreversible.