What are your views on those retirement plans sold by insurance companies for retirement income?

Hi there,

CPF is one of the best Singapore tools to leverage on, for your retirement. If you are currently still working, and still have the capability to save, you should consider doing religious RSTU yearly, until you hit your ERS, based on today's age banding. You are able to contribute 7K yearly to your SA, which will also net you tax relief. You can reference here to read more.

That being said, if you can conquer hitting your FRS by age 40, you will realise that, any additional liquidity you put into your CPF, while yes will net you that 4%, you will not be able to access it until 55. Even if your contributions are excessive, at 55, the RA will take funds from the SA then OA to form your RA, which is capped at the ERS. Following which you cannot contribute more funds into your RA.

Eventually, you will reach a point where you will need some form of guaranteed income, other than your CPF-Life payouts. In today's context, traditional methods of income, such as rental yield might be inconsistent due to gaps in occupancy or delinquency in payment. You can definitely use dividends to help fund your retirement, but that too comes with market risk.

While a traditional annuity plan from an insurer has a projected or non-guaranteed portion, when planning for my clients, I will always focus on what they need to supplement their retirement, or the "guaranteed" amount. Whatever extra the company assigns as bonus, i label that as your 13th month AWS in retirement. Context is important when planning for retirement, as it consists of many variables which might affect your strategy.

I do hope i was able to shed some insight on what you might be able to do for yourself. Have a great week ahead!​​​

There are several retirement plans sold by insurance companies that requires only single pay or 5 payments (over 5 years) using cash or SRS account. Afterwhich, retirement payout starts as early as 10 years from the policy start date. CPF is good savings as a base plan, but in order to have sufficient retirement funds, other plans have to be considered. Depending on risk appetite, there are options to choose from Adventurous, Balanced and Conservative portfolios. And you have the option to change the risk profile upon retirement.