How To Make The Most Of CPF LIFE For Your Retirement

Christopher Tan

Retirement today is more than just a matter of accumulating enough money. Increasing life expectancy has made retirement an extended stage of life.

If you’ve started looking into planning for your own retirement, chances are you’ve come across the term “annuity”. But what exactly is it, and how are annuities relevant to you?

Simply put, an annuity is a financial instrument that pays you an income for a set period of time.

While there are many different kinds of annuities in the market, find out more as Christopher Tan, CEO of Providend, shares which is the best annuity available to include in your retirement plan.

Hello everyone. Thank you very much for watching. Today, I would like to share with all of us one of the best instruments that we can use for retirement planning. And that is our CPF.  

And you might be surprised why I say that CPF is an instrument and why it is one of the best instruments. Well, it’s technically not an instrument, it’s a scheme. But I call it an instrument because just like any other instrument, it gives us returns. And our CPF has a very high-interest rate.  

Today, our Ordinary Account is pegged to the average three local banks’ interest rates. But regardless of what these interest rates are, there is a floor rate for our Ordinary Account and that’s 2.5% which means to say, monies in your Ordinary Account, you get at least 2.5% per year. In fact, for the first $20,000, you can get up to 3.5%.  

For monies in our Special, MediSave and Retirement Accounts, it is pegged to the Ten-Years Singapore Government Securities plus 1%. But our Government has, on a year to year basis, been guaranteeing us 4%. In fact, some parts of the monies, you can even get 5% return on a year to year basis.  

For those of us who are above 55 years old, the first $30,000 in your Retirement Account, we get 6% guaranteed today. And for the next $30,000, you get 5% guaranteed. And for the remaining, you can get 4% per year guaranteed. That’s very high interest for the little risk that we take.  

And what this high-interest rates they do for you is that when you reach the age of 65 years old, you would accumulate a nice tidy amount to pay you an annuity for life. And it is our conviction that in every retiree’s portfolio, there must be an annuity. Because an annuity helps you hedge against longevity risk. And CPF LIFE is the best annuity in Singapore.  

In our experience, planning for our affluent clients, oftentimes, we see that they buy for themselves complicated instruments such as hedge funds, private equity, structured products. These instruments are not just complicated, they are very costly and they not necessarily help our retiree clients achieve their retirement objectives.  

And what we really do for our clients is that we help them integrate the various instruments that they have, including the properties that they might own together with CPF LIFE, to give them a more reliable income stream.  

So, if you’d like to find out more about how you can do that, I invite you to contact us. Thank you very much for watching this video.  

We do not charge a fee at the first consultation meeting. If you would like an honest second opinion on your current estate plan, investment portfolio, financial and/or retirement plan, make an appointment with us today.

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