Acting Manpower Minister Mr Gan Kim Yong announced in parliament yesterday on the changes to the national annuity scheme. The number of choices is reduced from 12 to 4 - called LIFE Basic, LIFE Balance, LIFE Plus and LIFE Income. The following table illustrates the different amount of payout for a 55 year old male who have $67,000 in the Retirement Account in 2013 and receiving the first payout at age 65 (source: The Straits Times). The range of payout is for the assumed interest rate of 3.75% and 4.25%. The Straits Times report did not list the assumed interest rate but the CPF website listed them as quoted. I assume that both are assuming the same interesting rate.
Some things to take note of:
- The payout may not stay the same throughout the payout period as it depends on the floating interest rate and also the mortality rate. This means that there may be a situation of getting a higher payout for some years followed by lower payouts the next.
This one is very educational. I am 30years old and i hope to live with the same lifestyle when I reach 65 so I am investing to my retirement fund already.