Intro to CPF Life: 2025 Updates

CPF LIFE continues to evolve each year, providing annuity income in retirement. As the program continues to mature, understanding the program will help you plan for your future.

Overview

CPF LIFE stands for Lifelong Income for the Elderly. It was launched in 2013 as the culmination of previous efforts to setup lifetime annuities for retired persons in Singapore. If you are a Singapore Citizen or Singapore PR, you are eligible for the plan.

How it works

At age 55, the Retirement Account will be created as the fourth account in your CPF. It combines sums taken from your Ordinary & Special accounts and is earmarked for CPF LIFE. At 65, you have the option to select and start your annuity.

Choices for CPF LIFE

Choice 1—Annuity Plan Types 

There are currently three different annuity plan types within CPF LIFE. You choose your annuity type six months before you turn 65. Each annuity type focuses on different benefits, though all of them provide lifetime income:

1. Standard Plan—"More for Self”—allows for higher monthly payouts for your life, but leaves less of a bequest for your loved ones.
2. Basic Plan—"More for Loved Ones”—allows for a larger lump sum to be left to your loved ones, but has lower monthly payouts for you while you are alive.
3. Escalating Plan—"More for Future”—starts your monthly payouts lower and increases them annually for your entire life to help pace inflation.

Choice 2—Retirement Sum Amount

Your monthly annuity payment in retirement depends on both your annuity plan type and annuity starting value. CPF has three retirement account target values, called the “Retirement Sum,” each one increasing the amount of money you are paid when you retire.

Each year the amounts may increase to keep pace with inflation, thus the minimum needed for each account will increase.

Increasing your Retirement Sum

As you make contributions to CPF over your career, you will make contributions from salary if an employee, or from top-ups if self-employed. There are opportunities to increase your annual savings by making additional contributions to your Special Account when under 55, or directly to your Retirement Account when over 55. This is called the Retirement Sum Topping Up Scheme. Check your CPF account online to confirm additional savings that can be made.  

CPF LIFE—Questions & Answers

The following are frequently asked questions regarding CPF LIFE.

1. Can CPF LIFE be joined after 65? (Important for PRs)

According to CPF, yes, pending approval of application from the CPF Board anytime between age 65 and one month before you turn 80. Consult with your advisor or with the CPF board directly before making contributions to your CPF accounts.

2. Can CPF LIFE be exited? (For PRs giving up PR status only)

According to CPF, yes, you can withdraw the money from the annuity under special circumstances or when you surrender PR. Due to the complexity of exiting from CPF LIFE, please contact CPF directly for assistance.

3. Are CPF LIFE payments taxed?

According to IRAS, no, they are not. They are exempt from taxation for Singapore. If you live in another country during retirement, this may not apply as different countries have different rules for overseas annuities.

4. Are CPF LIFE payments guaranteed?

According to CPF, no, they are not guaranteed. The life annuity is managed like an annuity fund, and while it is done conservatively to preserve lifetime income, CPF has published that there is not a 100% guarantee that payments will always be at the same amount.

5. Can I change my Annuity Type once I join it?

According to CPF, you have 30 days to change your annuity plan type from the date of your first policy letter.

6. Can I move money from my Ordinary Account (OA) to my Special Account (SA)?

Yes, you can move money from your OA to your SA. This allows you to increase the amount of savings in your SA account, awarding higher interest and savings more for retirement. The drawback is, once you move money to your SA, it cannot be moved back to your OA. Please review this action with CPF or your advisor before moving any funds as this action cannot be undone.

7. Can I withdraw money from CPF?

At 55 years old, you have the option to withdraw money from your CPF account. The guidelines for this vary depending on your account, but the following are the major points:

• Your SA is used first in the creation of your retirement account, with funding equaling the Full Retirement Sum.
• If you do not have sufficient funds in your SA, then part of your OA will be used to as the difference.  
• Once your Retirement Account (RA) is created, and if you have balances in your SA and OA, you can normally withdraw the left-over balances from these accounts.
• There may be specific circumstances that limit your withdrawal capability. Please check with CPF directly regarding your accounts.

8. What are the implications for US taxpayers?

CPF is not a qualified pension per the IRS. Interest earned in all accounts is reported as on Schedule B of your annual return. CPF is required to be reported on your FBAR, and IRS form 8938 depending upon your personal circumstances.  

Please contact an advisor with Avrio Wealth if you need further assistance with CPF.

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