Your golden years may be far into the future, but your retirement planning should begin as early as possible. As inflation brings up the cost of everything—from healthcare to even your daily necessities—there's no saying as to how much things will cost in maybe ten to twenty years from now. Depending on the lifestyle you'd like to live once you sign off from your career, do you think you'll actually have enough in place to retire comfortably?
Here's where the CPF Lifelong Income For the Elderly, otherwise known as CPF LIFE, comes in. In short, it is a national longevity insurance annuity scheme that'll provide you with regular monthly payouts for as long as you live.
Why choose CPF LIFE?
Of course, there are other options out there such as the private annuity plans, but CPF LIFE isn't another investment product, but rather, it's an insurance product. You'll find that most private retirement income plans often have a limit on payouts, but with CPF Life, it'll carry on for the rest of your days.
As CPF LIFE is guaranteed by the Singapore Government and administered by the CPF Board, you'll bet set to earn high and risk-free interest that's up to 6% per year and there will be no costs incurred as well. It's all win, no losses here.
All you'll need to do is consider your desired retirement lifestyle, and from there, you'll have three options of CPF LIFE plans to choose from: Escalating, Standard, and Basic. From there, you can figure out how much you'll need as your monthly payout and the premium you'll need to pay, which you can also make manual cash top-ups or CPF transfers if it isn't enough. Lastly, get ready to receive your payouts! However, if you decide you'd like to defer your payouts, you'll gain a 7% increase for each year you defer.
CPF LIFE plans will secure you a monthly payout, however, in the event of your death, if there is any premium balance left (along with any savings), it will be distributed back to your loved ones. You'll be protecting not only yourself, but your loved ones in the long run.
Are you eligible for CPF LIFE?
If you meet these criteria, you'll automatically be included in CPF LIFE:
Of course, if you're not automatically included, you can opt to join CPF LIFE whenever you're ready to start receiving payouts. On the other hand, you can also choose to be exempted from the scheme if you meet the criteria set as well.
It's high time for you to start your retirement planning, because the earlier you start, the more time you'll have and the more you'll be able to save to live a more comfortable life after you retire. Look out for your future self by doing the hard work today.
If you're ever in need of any help with retirement planning, reach out to me and I'd be more than glad to assist you!