New CPF Changes in 2010

CPF LIFE
From 2013, CPF mem­bers born in 1958 or later with at least $40,000 in their Retire­ment Account (RA) at age 55 will be auto­mat­ic­ally included in CPF LIFE. Those with less than $40,000 will not be auto­mat­ic­ally included at 55. How­ever, such mem­bers will be auto­mat­ic­ally included at DDA if they have $60,000 in their RA then. This $60,000 is equi­val­ent in value to $40,000 at age 55, com­poun­ded at 4% over 10 years.

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Aging Crisis: Are you prepare for it?

The num­ber of people aged over 60 by 2050 is pro­jec­ted to be 1.2 bil­lion, the same pop­u­la­tion as in China today. This will pose crit­ic­al eco­nom­ic prob­lem when there are few­er young people in the work­force to sup­port the increas­ing pop­u­la­tion of the eld­erly.

In Singa­pore, the pop­u­la­tion of those aged 65 and above is expec­ted to treble to a mil­lion by 2030, which is one in every five people.  By 2050, the world’s pop­u­la­tion of those aged 65 and over will be one in every six people. Japan, Singa­pore, South Korea and Hong Kong are the four Asi­an coun­tries among the world’s 10 fast­est aging pop­u­la­tions.

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CPF LIFE Simplified

Singa­pore Nation­al LIFE Long Income Scheme, CPF LIFE, is a new scheme that will provide lifelong income for cit­izens from age 65 onwards. This annu­ity scheme will be imple­men­ted in year 2013 for those who are age 50 and below in 2008. Cit­izens will need to set aside Min­im­um Sum (MS) in their CPF Retire­ment Account when they reach 55 years old. The MS can be made up all in cash, or part cash and part prop­erty, with the prop­erty form­ing up to 50% of MS. Part of this MS will be used to pay for the CPF LIFE premi­um at age 55.

There are twelve options avail­able for CPF LIFE, as shown below, when it was first intro­duced in 2008:

Draw-down age 65 70 75 80 85 90
Refund Option

Yes

No

Yes

No

Yes

No

Yes

No

Yes

No

Yes

No


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All About CPF LIFE

Singa­pore Nation­al LIFE Long Income Scheme, CPF LIFE, is a new scheme that will provide lifelong income for cit­izens from age 65 onwards. This annu­ity scheme will be imple­men­ted in year 2013 for those who are age 50 and below in 2008. Cit­izens will need to set aside Min­im­um Sum (MS) in their CPF Retire­ment Account when they reach 55 years old. The MS can be made up all in cash, or part cash and part prop­erty, with the prop­erty form­ing up to 50% of MS. Part of this MS will be used to pay for the CPF LIFE premi­um at age 55.

There are twelve options avail­able for CPF LIFE as shown below:

Draw-down age 65 70 75 80 85 90
Refund Option

Yes

No

Yes

No

Yes

No

Yes

No

Yes

No

Yes

No

CPF mem­bers will start get­ting their retire­ment income from age 65, either from their MS or CPF LIFE. Draw-down age is the age that the retire­ment income will draw from CPF LIFE. The earli­er the draw-down age, more money will be channeled to CPF LIFE and less money left at MS. Unlike MS, money paid to CPF LIFE does not attract any interest from age 55 onwards. The Refund option gives the CPF mem­ber the option to refund the remain­ing CPF Life premi­um to the bene­fi­ciar­ies if he were to pass on earli­er without deplet­ing the premi­um. No-refund option is suit­able for those without any depend­ents or whose depend­ents do not require the money. The stand­ard default option is Refund 80, which is most suit­able for the major­ity since it strike a bal­ance between monthly pay­out and CPF LIFE premi­um.

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