Many people are confused what CPF is all about, including me last time.
I summarise the Five 3s of CPF here.
3 Basic Needs for Retirement
- A fully paid up home.
- Support for Healthcare Expenses.
- Lifelong Stream of Retirement Income
3 Contributors to CPF
- Government provide good risk free interest rate
3 Ways to Grow CPF Savings
- Do Nothing and enjoy risk free interest rate (CPFOA 2.5%, CPFSA 4%).
- Use CPFIS (CPF Investment Scheme) if you know how to invest to generate higher return.
- Use LRIS (Lifetime Retirement Investment Scheme) if you don’t know how to invest.
Note: All the above need time to let the compounding effect to take place.
3 Levels of Retirement Sums Set Aside at Age 55 in Retirement Account (RA)
3 CPF Life Plans After Age 65 Which Determine the Monthly Payout
- Standard Plan (Give more today and leaves less for your loved ones)
- Basic Plan (Give less today and leaves behind more for your loved ones)
- Escalating Plan (Start with lower payout that will increase every year)