Complete Guide
Retirement Savings & Income Planning
Singapore's CPF retirement system is one of the strongest in the world. When properly understood and planned, it provides predictable lifelong income, healthcare security, and tax efficiency that no private system can replicate. This guide explains CPF LIFE, Retirement Sum Scheme (RSS), and Supplementary Retirement Scheme (SRS), and how they work together in real retirement planning.
At age 55, your CPF savings from your Special Account and Ordinary Account are transferred into a Retirement Account (RA), up to the prevailing retirement sum.
The Retirement Account exists solely to fund retirement income.
Think of the Retirement Account as a personal pension pool, not a savings account. Its sole purpose is to generate predictable retirement income.
CPF defines how much should be set aside to provide basic retirement income. There are three reference levels:
Meant to cover basic living expenses. Requires property pledge.
Designed to provide more comfortable income for most retirees.
For those who want higher guaranteed payouts in retirement. From 2025, ERS is 4x BRS.
Retirement sums are income design targets, not penalties or costs. Higher retirement sums lead directly to higher monthly income.
CPF LIFE is a government-backed lifelong payout scheme.
Once payouts start, you receive monthly income for as long as you live, even if you live beyond 100.
This solves the biggest retirement risk: running out of money while still alive.
Your Retirement Account balance is used to:
CPF LIFE is income insurance, not an investment. Its purpose is to guarantee you never run out of money.
CPF LIFE offers different plans that balance income versus legacy. Each plan answers a different question: do you want higher monthly income, or do you want to leave more behind?
Balanced payout and bequest. Suits most retirees who want steady income with some legacy.
Higher bequest, lower payout. For those prioritizing leaving money to beneficiaries.
Lower initial, increasing payout. Hedges against inflation over time.
Balanced approach
Legacy priority
Inflation hedge
Quick guide: Standard is best for most. Choose Basic if leaving money to family matters most. Choose Escalating if you are worried about inflation eroding your income over 20 to 30 years.
Design CPF LIFE to cover essential expenses first. Do not rely on investments for basic survival needs. CPF LIFE should be your safety net.
Delaying payouts only makes sense if you have reliable income elsewhere. Deferring from 65 to 70 can increase monthly income by 6 to 7% per year.
The Retirement Sum Scheme is a retirement payout method that pays monthly income until your Retirement Account is depleted.
It is not lifelong.
Once the balance runs out, payouts stop.
By Default: Retirement Sum Scheme
Can apply to join CPF LIFE anytime between Payout Eligibility Age and 1 month before turning 80
Do you have $40,000 in RA when you turn 55?
OR
Do you have $60,000 in RA 6 months before age 65?
Do you have $60,000 in Retirement Account 6 months before age 65?
Key Takeaway: For most Singaporeans born after 1961, having at least $60,000 in your Retirement Account 6 months before age 65 automatically qualifies you for CPF LIFE with lifelong payouts.
If you are born in 1958 or after but have less than $60,000 in your Retirement Account when payouts begin, you will NOT be automatically included in CPF LIFE.
Example: If you have $50,000 in your RA at age 65 and receive $400 per month under RSS, your payouts will last approximately 10 to 12 years (depending on interest earned). If you live past 77, you will have no more CPF income. With CPF LIFE, payouts continue for life even if you live to 100.
For most people today, CPF LIFE is the superior and safer choice. The lifelong guarantee eliminates the risk of running out of money. If you have less than $60,000 in your RA, consider topping up before age 65 to qualify for CPF LIFE.
At age 55:
This is often misunderstood.
Withdrawing everything possible at 55 often weakens long-term retirement security. Consider keeping more in CPF for the guaranteed 4% returns and lifelong income.
After turning 55, the rules for using CPF to pay for your housing change significantly. Understanding these rules helps you make better decisions about your retirement savings.
Your Special Account and Ordinary Account savings (up to the Full Retirement Sum) are transferred to your Retirement Account.
If your combined savings just meet or fall below the Full Retirement Sum, your Ordinary Account may have little or no balance left.
If you were using Ordinary Account to pay your housing loan, you may no longer have sufficient funds to continue.
Any amount in your Ordinary Account above the Full Retirement Sum can still be used for housing.
If you are still working and receiving CPF contributions after 55, your new Ordinary Account contributions can be used for housing.
Your Retirement Account funds cannot be used for housing. They are strictly for retirement income via CPF LIFE.
If you want to stop using your CPF Ordinary Account to pay your housing loan (for example, to preserve funds for retirement or switch to cash payments), follow these steps:
Contact your bank or HDB and request to stop CPF deductions for your housing loan.
Fill in the required form from your bank or use the CPF Board's online service.
Arrange for GIRO or other cash payment methods for your monthly mortgage.
Check your CPF statement to confirm deductions have stopped (takes 1 to 2 months).
You can notify CPF about changes to your housing arrangements through several channels:
Log in to the CPF website with your Singpass to manage your housing arrangements.
Access CPF e-Service →Call the CPF Board hotline for assistance with housing matters.
1800-227-1188
Mon to Fri, 8am to 5.30pm
When you use CPF for housing, you accumulate "accrued interest" at 2.5% per year. When you sell your property, this accrued interest must be refunded to your CPF. The longer you use CPF for housing, the more you have to refund. Switching to cash payments earlier reduces your total accrued interest.
CPF Shielding was a strategy where members would invest their Ordinary Account (OA) funds into CPF Investment Scheme (CPFIS) products like unit trusts or shares before turning 55.
The idea was that invested Ordinary Account funds would not be transferred to the Retirement Account at age 55, since only cash balances were swept into the Retirement Account.
This allowed members to "shield" their Ordinary Account from being locked up, giving them more flexibility and liquidity.
From January 2025, CPF changed the rules. Now, when you turn 55:
The main reasons were to maintain flexibility over their funds and to invest for potentially higher returns than the 4% Retirement Account interest. While the shielding loophole is now closed, the underlying goal remains valid: earning more from your retirement funds while preserving capital for your family.
Instead of trying to shield your CPF, consider a smarter strategy: withdraw your CPF surplus above the Full Retirement Sum (or downgrade to Basic Retirement Sum with property pledge) and invest in Lifetime Dividend Plans that pay 6 to 8% annually with 100% capital guaranteed for your beneficiaries.
At 55, withdraw funds above the Full Retirement Sum or downgrade to Basic Retirement Sum (with property pledge). Invest in Lifetime Dividends Plan to earn 6 to 8% annual payouts with 100% capital guaranteed for beneficiaries.
The Supplementary Retirement Scheme (SRS) is a voluntary retirement savings scheme designed for tax optimisation. You contribute during working years to reduce taxable income and invest for long-term growth.
Per year. Unused cap does not carry forward.
Higher cap since foreigners have no CPF contributions.
Open with DBS, OCBC, or UOB. You can only have one SRS account at any time.
Bring your NRIC (citizens/PRs) or passport and Employment Pass (foreigners). Takes 15 minutes.
Transfer money anytime before 31 December to claim tax relief for that year.
You can only have one SRS account with one bank operator at any time. If you want to switch banks, you must transfer your entire SRS balance. Choose wisely based on the bank's investment options and service quality.
Every dollar you contribute reduces your taxable income by one dollar. Contribute S$15,300, save S$15,300 from your taxable income.
All investment gains, dividends, and interest earned inside SRS are not taxed until withdrawal.
Only 50% of withdrawals are taxable after statutory retirement age (currently 63). Spread over 10 years for minimal tax.
Person earning S$150,000 per year:
Translation: Every S$15,300 contributed saves you approximately S$2,300 in taxes immediately.
Tax saved is not a bonus. It is capital for compounding. The earlier you start contributing to the Supplementary Retirement Scheme, the more your tax savings work for you.
Bad Supplementary Retirement Scheme withdrawal planning can destroy years of tax savings. The optimal strategy is to spread withdrawals over 10 years, keeping annual taxable amounts below S$20,000.
SRS funds can be invested in a range of approved financial products. Here are the main options:
SRS-approved unit trusts including equity funds, bond funds, balanced funds, and money market funds.
Singapore-listed shares, REITs, and Exchange Traded Funds (ETFs) on SGX.
SRS fixed deposits offered by your SRS bank operator. Low risk but low returns.
Singapore Savings Bonds (SSB) and Singapore Government Securities (SGS).
SRS-approved annuities, endowment plans, and single premium insurance policies.
Uninvested SRS cash earns only 0.05% interest, effectively losing to inflation.
Unlike your regular brokerage account, SRS investments are restricted. Here is why:
Every investment product must be approved by the Monetary Authority of Singapore (MAS) for SRS use. Not all funds or products go through this process.
DBS, OCBC, and UOB each offer different SRS investment products. Your options depend on which bank holds your SRS account.
You cannot directly buy US stocks, Hong Kong stocks, or other foreign-listed securities. You must use SRS-approved funds that invest overseas.
SRS does not allow investment in cryptocurrencies, commodities futures, or other alternative investments.
Bottom Line: SRS is great for tax savings, but if you want maximum investment flexibility, you will need to balance SRS investments with regular cash investments.
Do not be overly conservative with your Supplementary Retirement Scheme just because it is retirement money. Cash in your SRS account earns only 0.05%, effectively losing money to inflation. Invest for growth since the funds are locked for decades anyway.
A well-designed retirement system uses each component for its specific purpose. They should not be used in isolation.
Guaranteed lifelong income
Tax-efficient flexibility
Growth and lifestyle
CPF LIFE
Covers survival and dignity
Supplementary Retirement Scheme
Improves tax efficiency and flexibility
Investments
Enhance lifestyle and legacy
Retirement planning is income orchestration, not product accumulation. Get the order right, and everything else becomes easier.
CPF LIFE provides guaranteed lifetime income that no private product can match for the cost.
Every dollar withdrawn at 55 is a dollar that stops earning 4% guaranteed returns.
The risk of outliving your money is real. CPF LIFE eliminates this risk.
Bad withdrawal timing can result in paying more tax than you saved.
Chasing higher returns while ignoring guaranteed income puts your retirement at risk. Balance growth with security.
Covers survival and dignity
Improves tax efficiency and flexibility
Enhance lifestyle and legacy
Get the order right, and everything else becomes easier.
Understand how CPF LIFE, Supplementary Retirement Scheme, and investments work together for your specific situation. Get a personalized retirement income plan that maximizes your security and lifestyle.
Common Belief
"CPF alone is enough for retirement"
Planning Reality
CPF LIFE provides $1,500-1,700/month at FRS, but most retirees need $3,000-5,000+ monthly. You'll need SRS, investments, or other income sources to maintain your desired lifestyle.
Common Belief
"I can catch up on savings later in my career"
Planning Reality
Compound interest works best over time. Starting at 30 vs 45 can mean a $200,000+ difference in retirement savings. Every year of delay significantly reduces your final balance.