The short answer on the Retirement Sum Scheme vs CPF LIFE: the Retirement Sum Scheme (RSS) pays you a monthly amount from your own Retirement Account until that account is empty, while CPF LIFE pays for as long as you live. If you are on RSS, you can choose to join CPF LIFE at any time from 65 until one month before you turn 80.
This matters most to older members and to those with smaller balances. Here is how RSS payouts work, when they end, and what switching involves.
Who Is on the Retirement Sum Scheme
RSS is the older of the two schemes. According to CPF Board, you are not on CPF LIFE, and so receive payouts this way, if you:
- were born before 1958; or
- were born in 1958 or later and have less than S$60,000 in retirement savings when your payouts start; or
- are not a Singapore Citizen or Permanent Resident.
Members born in 1958 or later with at least $60,000 are placed on CPF LIFE automatically. Everyone else stays on RSS unless they opt in.
How Retirement Sum Scheme Payouts Work
Under RSS, your Retirement Account (RA) stays in your name and pays you a fixed sum each month.
CPF Board says the payout is calculated so that your RA savings last up to 20 years from your payout eligibility age, using the base interest rate your RA earns when payouts start.
Two details follow from that.
- Extra interest lengthens the payout period, not the monthly amount. The Government pays extra interest of up to 2% a year on retirement savings. CPF Board uses this to extend your payouts beyond the 20 years, generally up to age 90.
- Small balances are paid out faster. In its payout table, CPF Board notes that members who are not on CPF LIFE receive monthly payouts of at least $350 until their CPF savings are depleted.
Like CPF LIFE, RSS payouts can start any time from 65. If you give no instruction, they start automatically at 70. Deferring gives either a higher payout or a longer payout period.
When RSS Payouts Stop
They stop when the RA is empty. There is no pooling, so nothing continues after that.
How long that takes varies from member to member. CPF Board says it depends mainly on how much is in your RA, because that determines how much extra interest you earn.
Payouts for some members used to be stretched to as late as age 95, which made each monthly payout smaller. In late 2019, the Government announced that RSS payouts would be adjusted to last up to age 90 at most. MOM said at the time that no member would see a reduction in the payouts they were receiving.
An illustration
Take an illustrative member aged 65 with $40,000 in her RA, receiving $350 a month.
- She draws $4,200 a year.
- If the balance earns between 4% and 6% a year as it runs down, the money lasts roughly 12 to 14 years.
- Her payouts would end at about age 77 to 79.
This is our simple illustration, not a CPF calculation, and not a guarantee. CPF’s estimator will show the actual payout period for your account. The point is that on RSS, a long life can outlast the money.
The short version: The Retirement Sum Scheme pays from your own Retirement Account until it is empty, generally by age 90 at most and sooner for small balances. CPF LIFE pays for life. RSS members can join CPF LIFE from 65 until one month before turning 80.
Retirement Sum Scheme vs CPF LIFE at a Glance
| Retirement Sum Scheme | CPF LIFE | |
|---|---|---|
| Who is on it | Born before 1958, or less than $60,000 in retirement savings at payout start | Citizens and PRs born 1958 or later with at least $60,000; others by choice |
| Where payouts come from | Your own RA | Your premium first, then interest pooled among members |
| How long payouts last | Until the RA is depleted; designed for up to 20 years, extended by extra interest, generally up to age 90 | For as long as you live |
| Earliest start | 65, automatic at 70 | 65, automatic at 70 |
| What beneficiaries receive | The remaining RA balance | Any premium not yet paid out, plus other CPF savings |
| Can you take the money back | No lump-sum withdrawal of the RA, except under the usual withdrawal rules | No. Savings used as premium cannot be withdrawn |
How to Join CPF LIFE From RSS
CPF Board says Singapore Citizens and Permanent Residents who are not automatically included can still join.
- When: from age 65 to one month before you turn 80.
- How: through the “Plan my monthly payouts” service on the CPF website. If you cannot apply online, contact CPF Board for other ways to apply.
- What you choose: a CPF LIFE plan. See Standard, Basic or Escalating.
- What happens: your RA savings are used as the CPF LIFE premium, and CPF LIFE payouts replace your RSS payouts.
Before applying, use CPF’s payout estimator to compare your current RSS payout with the CPF LIFE estimate. Ask CPF Board to confirm whether the decision can be reversed in your case. Treat it as permanent unless told otherwise.
What You Gain and What You Give Up
Joining CPF LIFE swaps a known, limited stream for an open-ended one.
What you gain:
- Payouts that cannot run out, however long you live.
- Protection in exactly the years when it is hardest to earn or borrow.
What you may give up:
- Monthly amount. Because CPF LIFE must fund payments for life, the monthly figure can be lower than an RSS payout designed to exhaust the account. Compare the two estimates.
- Visibility. RSS savings sit in your RA. CPF LIFE savings become a premium, and interest on it is pooled rather than inherited. See what happens to your CPF LIFE money when you die.
Age matters too. Someone joining at 66 has many more years of potential payouts ahead than someone joining at 79. Health, family history and other income all bear on the choice.
If your balance is small
A small RA produces a small payout under either scheme. Other support may apply.
- A Singapore Citizen with an RA below the Basic Retirement Sum may qualify for matching on cash top-ups. See the Matched Retirement Savings Scheme.
- Lower-income seniors may receive quarterly cash under the Silver Support Scheme.
What To Do Next
- Log in to the CPF website and check your Retirement Dashboard. It shows which scheme you are on, your monthly payout and how long it is expected to last.
- Use CPF’s payout estimator to compare staying on RSS with joining CPF LIFE.
- Map your other savings against your expenses with our retirement timeline calculator.
- Read how CPF LIFE works before deciding.
- If you are helping a parent, sit down with them and their statement.
