
According to a study done by the Stanford Center on Longevity, the best retirement income strategy has been revealed to comprise of two parts.1 Adapting this for our local context, we should:
- Optimise our CPF Life pay-outs
- Devise ways to receive a lifetime of pay-outs
In this article, we share three tips to help you adopt the best strategy for your retirement.
(See "With My Corporate Cover, Do I Still Need Health Insurance?")
#1 Delaying CPF Life pay-outs
A government initiative, CPF Life is designed to help us plan for our retirement. While CPF Life pay-outs start from just $690 a month, we can increase this by either topping up our Retirement Account or delaying pay-outs till a later age.2
By choosing to commence pay-outs at age 70 instead of age 65 (for those born in 1954 and after), we could receive an increase of up to 7 per cent for each year that we defer pay-outs.3 This allows us to optimise our CPF Life for higher pay-outs which can then be used to supplement our retirement income.
(See "I Already Have CPF Life, Do I Still Need Annuities?")
#2 Having multiple smaller retirement plans (annuities)
The next step is to create an automatic retirement paycheck. This can be done through the use of annuities. A type of life insurance, annuities are generally used for retirement planning with premiums paid for a specified period. Offering a regular stream of income, annuities are suitable to be used for retirement income. To combat the problem of high premiums for annuities, a solution is to purchase multiple smaller annuities over a period of time.

Take for example a retirement plan with a sum assured of $200,000. Instead of buying a single plan, split this into eight smaller retirement plans. Not only will doing so allow for more affordable premiums, but this also allows you to slowly buy in and comfortably build up your nest egg as you plan for your retirement. Additionally, with multiple smaller plans, you are given the flexibility to purchase plans for each of your children (3 Generation planning) and change or cancel each smaller plan if necessary. Moreover, you would also be able to determine the frequency of your pay-outs with multiple small plans. As most annuities pays out on a yearly basis, multiple plans allows you to schedule them so as to receive retirement income throughout the year.
(See "Transfer Your Wealth To Future Generations With A 3G Plan")
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#3 Stretching your premium payment term
Lastly, consider stretching the premium payment terms of your retirement plan. Rather than choosing a single premium annuity, consider limited pay annuities. This allows you to make regular premium payments over an extended period (e.g. 10 or 20 years) thus allowing for more affordable premiums at each payment cycle. Depending on your annuity, you may also be able to receive pay-outs while concurrently paying for your premiums. These gives you the flexibility of choosing to partially finance your premiums with the pay-outs, accumulating it with the insurer for additional interest or using it for any of your own personal goals.

(See "3 Reasons You Need Cancer Insurance")
Retirement plans (Annuities) are suitable for:
Retirement plans (Annuities) are not suitable for:
Available Retirement plans (Annuities) : |
Etiqa Insurance - ePREMIER eternity presto, eFUTURE paypresto Manulife - RetireReady Plus, ReadyPayout Plus NTUC Income - Gro Prime Saver, Wealth Solitaire, Gro Retire Wise, Gro Retire Ease Tokio Marine - TM Retirement GIO,TM Retirement GIO Plus,TM Retirement Paycheck Life, TM Retirement Secure, TM Retirement SP |
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Available Products on FSMOne Insurance |
Term Life, Whole Life, Critical Illness, Annuity, Health, Endowment from Etiqa Insurance, Manulife, NTUC Income and Tokio Marine Life Insurance *Please check with our advisory team if the product you want is available on FSMOne Insurance |
2Source: https://www.cpf.gov.sg/Members/Schemes/schemes/retirement/cpf-life
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