Choosing the right CPF LIFE plan affects how much money lands in your bank account every month after you retire. Pick the wrong one and you could leave thousands of dollars on the table over your lifetime.
CPF LIFE offers three main plans: Standard Plan (balanced payouts with moderate bequest), Basic Plan (highest monthly payouts with lower bequest), and Escalating Plan (growing payouts that increase 2% yearly). Your choice depends on whether you prioritize maximum income now, leaving money for family, or inflation protection. Most retirees choose Standard Plan for its balance, but Basic Plan suits those needing higher immediate income.
Understanding what CPF LIFE actually does
CPF LIFE stands for CPF Lifelong Income For the Elderly. It converts your CPF savings into monthly payouts that continue until you pass away.
Think of it as buying an insurance policy with your own retirement savings. You hand over a lump sum at age 65, and the government guarantees you monthly income for life.
Everyone with at least $60,000 in their Retirement Account gets automatically enrolled. You must choose a plan before your payouts start.
The choice matters because different plans offer different trade-offs between monthly income, bequest amounts, and inflation protection.
Breaking down the three main CPF LIFE plans
The government offers three core plans, each designed for different retirement priorities.
Standard Plan
This is the default option that most Singaporeans end up choosing. It balances monthly payouts with money left for your family.
You get moderate monthly income. When you pass away, your beneficiaries receive any remaining premiums plus interest, minus what you’ve already collected.
About 70% of CPF members stick with this plan because it feels like the middle ground. Not too aggressive, not too conservative.
Basic Plan
This plan maximizes your monthly payouts right from the start. You get the highest possible income every month.
The trade-off? Lower bequest amounts for your family. The government keeps more of your premiums to fund those higher payouts.
This makes sense if you have no dependents, already have other assets to leave behind, or simply need maximum income to cover living expenses.
Escalating Plan
Your monthly payouts start lower but increase by 2% every year. This protects you against inflation as you age.
At 65, you might receive $100 less per month compared to Standard Plan. By 85, you could be getting $200 more per month.
The bequest works similarly to Standard Plan. Your family gets back remaining premiums and interest.
Real numbers: how much each plan actually pays
Let’s look at actual payout amounts based on a Retirement Account balance of $200,000 at age 65.
| Plan | Monthly Payout at 65 | Monthly Payout at 85 | Estimated Bequest at 85 |
|---|---|---|---|
| Standard Plan | $1,580 | $1,580 | $45,000 |
| Basic Plan | $1,720 | $1,720 | $28,000 |
| Escalating Plan | $1,380 | $2,050 | $43,000 |
These numbers change based on your actual Retirement Account balance and prevailing interest rates when you turn 65.
Notice how Basic Plan gives you $140 more per month from day one. Over 20 years, that’s an extra $33,600 in total payouts.
But Escalating Plan eventually overtakes both other plans if you live into your late 80s. The 2% annual increase compounds over time.
How to choose the right plan for your situation
Your decision should match your personal circumstances and retirement goals.
Follow these steps:
- Calculate your expected monthly expenses in retirement
- List all your income sources (CPF payouts, rental income, part-time work, children’s support)
- Identify any gaps between income and expenses
- Consider your health and family longevity patterns
- Evaluate how important leaving an inheritance is to you
- Factor in other assets you already have
- Make your selection through the CPF website or app
“The best CPF LIFE plan isn’t the one with the highest payout. It’s the one that matches your retirement lifestyle and family obligations. I’ve seen retirees choose Basic Plan for maximum income, then regret it when they wanted to leave more for grandchildren’s education.” – Financial planning advisor at CPF advisory session
When Basic Plan makes the most sense
Choose Basic Plan if you need maximum monthly income and any of these apply:
- You have no dependents or children who need inheritance
- You already own property or other assets to leave behind
- Your monthly expenses are high and other income sources are limited
- You’re in poor health and don’t expect to live past average life expectancy
- Your spouse has their own substantial retirement savings
A 65-year-old single retiree with $150,000 in medical expenses might prioritize immediate cash flow over bequest amounts.
When Standard Plan works best
Standard Plan suits most people because it doesn’t force you to choose between income and bequest.
Pick this option if:
- You want a balanced approach without extreme trade-offs
- You’re unsure about your future needs
- You want to leave some money for family but also need decent monthly income
- You prefer the default option that most Singaporeans choose
- You don’t want to overthink the decision
This plan won’t maximize any single factor, but it won’t minimize anything either.
When Escalating Plan protects you better
Escalating Plan makes sense for specific situations where inflation protection matters most.
Consider this plan if:
- You’re healthy and expect to live well into your 90s
- You have other income sources to supplement lower initial payouts
- You worry about rising costs eroding your purchasing power
- Your family has a history of longevity
- You have savings or investments to cover the first 10-15 years
The 2% annual increase might not match actual inflation rates, but it provides some protection against rising costs.
A 65-year-old who receives $1,000 monthly allowance from children might choose Escalating Plan, knowing the initial lower payout won’t hurt their lifestyle.
Common mistakes people make when choosing
Many retirees make these errors during plan selection:
- Choosing Basic Plan solely because it has the highest number, without considering bequest needs
- Picking Escalating Plan but not having enough supplementary income for the early years
- Ignoring their own health conditions and family medical history
- Not discussing the decision with family members who might be affected
- Forgetting that the choice is permanent and cannot be changed after payouts start
- Comparing plans based on a single metric instead of total retirement picture
- Waiting until the last minute and making a rushed decision
You have until three months before your 65th birthday to make your choice. Use that time wisely.
What happens if you do nothing
If you don’t actively choose a plan, CPF automatically enrolls you in Standard Plan.
This isn’t necessarily bad. Standard Plan works well for most people, which is why it’s the default.
But you should still review all options. Your situation might benefit from a different choice.
The automatic enrollment happens about three months before you turn 65. CPF sends multiple reminders through mail and SMS.
How to switch plans before payouts begin
You can change your plan selection anytime before your payouts start at 65.
Log into your CPF account online. Navigate to the retirement section. Select a different plan. Confirm your choice.
The system lets you change your mind multiple times. Only your final selection before payout commencement matters.
Once your first payout hits your bank account, your choice becomes permanent. No changes allowed after that point.
Special considerations for married couples
Married couples should coordinate their CPF LIFE choices.
If one spouse chooses Basic Plan for maximum income and the other chooses Standard Plan for better bequest, you balance household needs.
Consider these factors together:
- Combined monthly household expenses
- Who has higher CPF balances
- Age gap between spouses (if one is significantly younger)
- Other assets and insurance policies
- Health status of both partners
A couple where one spouse has $300,000 and the other has $100,000 might make different choices for each person’s account.
Additional CPF LIFE options you should know about
Beyond the three main plans, CPF offers two supplementary options.
CPF LIFE Standard Plan with higher bequest: You can opt for lower monthly payouts in exchange for guaranteed higher bequest amounts. This ensures your family receives at least a certain minimum.
CPF LIFE for those with smaller balances: If you have less than $60,000 in your Retirement Account, you get different payout calculations and options.
These variations exist to serve different needs, but most people focus on the three main plans.
How your retirement account balance affects everything
Your payout amounts scale directly with how much you have in your Retirement Account at 65.
Someone with $100,000 gets roughly half the monthly payout of someone with $200,000 under the same plan.
This is why financial advisors emphasize maximizing your CPF contributions during working years. Every dollar you add compounds and increases your eventual monthly income.
You can make voluntary contributions to your Retirement Account until age 65. Some people top up their accounts in their early 60s specifically to increase CPF LIFE payouts.
Tax and withdrawal rules you need to know
CPF LIFE payouts are not taxable income in Singapore. You receive the full amount without deductions.
The money goes directly into your bank account monthly. You can spend it however you want.
There are no withdrawal limits or restrictions. Unlike your CPF accounts before retirement, you have complete access to your monthly payouts.
This makes budgeting simpler. You know exactly how much hits your account every month for the rest of your life.
Making your choice with confidence
Your CPF LIFE plan selection is one of the most important financial decisions you’ll make for retirement.
Take time to run the numbers. Use the CPF calculator tools to see projections for your specific balance. Talk with family members about inheritance expectations.
Most importantly, choose based on your actual needs, not what sounds best on paper or what your neighbor picked.
The right plan gives you peace of mind knowing you have guaranteed income for life, structured in a way that matches your priorities.