At Age 55, the CPF Retirement Account is formed after considering the withdrawal of monies that's above the chosen CPF Retirement Sum Type (BRS, FRS, ERS).
The Retirement Account will continue to grow at the prevailing rates until the Age of 65. You can consider to top up into the CPF RA account at anytime during Age 55 to Age 65.
Once the client reaches [CPF Life Payout Age], we would use the CPF RA amount to determine the CPF Life Payout.
How to determine the CPF Life Payout based on RA Amount.
- We use the values from the CPF Life Estimator as a lookup to determine the RA amount.
- The following parameters that will be used for the lookup:
- CPF Life Plan (Standard, Basic or Escalating)
- Gender
- Age the Payout starts
- RA Amount
- Example: If the client is Male and opted for CPF Life Basic Plan and choose to start his payout from 65. With $322,250 in his RA ata age 65, the CPF Life Payout amount will be
- From age 65 to 84: $1,590
- From age 85 to 94: $1,590
- From age 95: $1,520
How do we calculate for CPF Life Payout if the RA amount is above $800,000 since the the estimator only estimates up to $800,000
CPF Life Estimator only projects up to RA amount of $800,000.
For clients with RA above $800,000, we will use the average growth rate of the CPF Life Payout amount from $700,000 to $800,000 as a reference to project on an interval of $5000 (CPF Life Estimator payouts are based on intervals of $5000).
For example:
Client Profile: 65 year old Male, with RA of $948,000
| CPF Life Payout Amount with RA of $800,000 | $4,260 |
| Number of multiples of $5000 above $800,000 | 29 |
| Projected CPF Life Payout | (1+0.0066)^29 * $4,260 = $5,156 |
Why can't I see my CPF RA after CPF Life starts?
Once CPF Life payout starts, the CPF RA will be removed from the Asset, as would be included into the Lifelong Income Fund, for the purpose of risk pooling among all CPF members.
You should always highlight to the client that the CPF Life Payouts is only an estimate and it's not an accurate projection according to CPF rules.