What Happens After I Join A CPF LIFE Plan?

Source: CPF

What happens after I join CPF LIFE?
Members will choose their CPF LIFE plan when they wish to start receiving their payouts between the age of 65 to 70.
They can choose between 3 plans listed above.

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What Happens If I Chose The CPF LIFE Standard Plan?
Members who chose the CPF LIFE Standard Plan, the following will happen to their CPF account:

1. All savings in members' RA will be used as the annuity premium for CPF LIFE.
2. Premiums will be paid into the Lifelong Income Fund.
3. Interest earned on the premiums (4% + 1% + 1%) will be credited into the Lifelong Income Fund.
4. Monthly payouts will be paid from the Lifelong Income Fund for as long as members live.
5. If members passed away, all the money in their CPF and their CPF LIFE premiums that have not been paid out as monthly payouts will be given back to the members' loved ones as 'Bequest'.

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Recommended Read: The 4% Shortfall In Your CPF Retirement Fund

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What Happens If I Chose The CPF LIFE Basic Plan?
Members who chose the CPF LIFE Basic Plan, the following will happen to their CPF account:

1. 10% to 20% of the savings in members' RA will be used as the annuity premium for CPF LIFE.
2. Premiums will be paid into the Lifelong Income Fund.
3. Interest earned on the premiums (4% + 1% + 1%) will be credited into the Lifelong Income Fund.
4. 80% to 90% of the RA savings will remain in the members' individual RA.
5. Interest earned on the RA savings (4% + 1% + 1%) will be credited back into the members' individual RA.
6. Monthly payouts will be paid out of members' RA first up till the age of 90.
7. From 90 years old onwards, members will receive monthly payouts from the Lifelong Income Fund for as long as members live.
8. If members passed away before 90 years old, all the money in their CPF and their CPF LIFE premiums will be given back to the members' loved ones as 'Bequest'.
9. If members passed away after 90 years old, their CPF LIFE premiums that have not been paid out as monthly payouts will be given back to the members' loved ones as 'Bequest'.

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What Happens If I Chose The CPF LIFE Escalating Plan?
Members who chose the CPF LIFE Escalating Plan, the following will happen to their CPF account:

1. All savings in members' RA will be used as the annuity premium for CPF LIFE.
2. Premiums will be paid into the Lifelong Income Fund.
3. Interest earned on the premiums (4% + 1% + 1%) will be credited into the Lifelong Income Fund.
4. Monthly payouts will be paid from the Lifelong Income Fund for as long as members live.
5. The monthly payouts will start lower but increase by 2% each year.
6. If members passed away, all the money in their CPF and their CPF LIFE premiums that have not been paid out as monthly payouts will be given back to the members' loved ones as 'Bequest'.

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In case you didn't want to read, we've made a video for you. 😉

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Recommended Read: Save in CPF or Invest in SPDR STI ETF?

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