Best Retirement Plans in Singapore

On average, Singaporeans start planning for their retirement at 36 years old and the ideal retirement plan may differ based on different individuals’ lifestyles and needs. Retirement plans support you by providing a stable stream of guaranteed payout which can be monthly or annually at the stipulated age where you planned.

What is a Retirement Plan / Private Annuity plan?

Retirement plans payout a stable consistent stream of income to you in your golden years upon a chosen retirement age, providing financial stability as you enjoy retirement. CPF LIFE will supplement your income during your retirement and support with basic living needs.

What do you have to consider before getting a Retirement Plan?

Guaranteed Income

This is the most important number to consider when purchasing a retirement plan. This will tell you how much guaranteed income you will receive based on the amount of premiums that you have paid. 

If you pay a $100,000 premium for your annuity plan that guarantees you a 2.5% p.a. income a year. You will receive $2,500 a year in retirement income. 

This guaranteed income for annuity plans can be low at around 2%, however, it is a guaranteed payout till maturity date or for life. Therefore, providing assurance of a fixed income for your retirement years.

Payout Date

The reason that Singaporeans choose a private annuity plan versus a public annuity plan such as CPF Life is because it offers them more flexible choices for payout dates. Currently, CPF Life has a payout date from age 65 and this is subject to changes by the Singapore government.

You get to choose exactly when you want to retire with a private annuity! If you plan to retire at an earlier age, then the payout date at age 65 may be too late for your retirement plans. A private annuity will help you in your retirement goals as you can choose your desired retirement age and receive a payout from as soon as 5 years after you pay your premium.

Premium Payment

Premium payment for annuities is easy to understand as it is usually a lump sum payment. Alternatively, there is also the option for limited payment of your premium over a certain number of years. The purpose of the money you put in this plan will be for your retirement income. A portion of the premium payment will also go towards some form of insurance coverage.

Commitment Period

Most retirement plans have a 15-20 year commitment period and have the flexibility to choose an income payout period of up to 80 years old or for a lifetime.

SRS Eligible

Manulife and AXA have annuity plans that are eligible for the Supplementary Retirement Scheme (SRS). Therefore, if you have been topping up your SRS account to enjoy tax relief, you can use these funds to purchase a private annuity plan. This can help you if you plan to retire earlier than 65 years old as some annuity plans allow you to choose your own retirement age from as young as the age of 50. 

What do you not have to look out for in a Retirement Plan?

Insurance Coverage 

Annuity plans often come with some form of life protection coverage such as Death, Total Permanent Disability (TPD) and Terminal illness. However, this plan is not structured to provide you with comprehensive life coverage as an annuity was made for your retirement. Even in the event of a death, the coverage amount may only be slightly higher than the premiums paid or a cash payout of the full premium amount only.

If you would like to have a more comprehensive life insurance protection, consider a term life or whole life policy. This is because your life will be insured at a higher amount for a lower premium cost. 

Capital Guaranteed 

All retirement plans should be capital guaranteed, therefore this should not be the sole selling point of a good retirement plan. Instead, you should consider how suitable a plan is to your specific retirement and lifestyle needs – retirement age, payout amount, payout period, etc.

Best Retirement Plans with non-guaranteed cash bonuses

Full insurer Retirement Plan details may be found here:

Best Retirement Plans with a high income of 2% p.a. and above

Full insurer Retirement Plan details may be found here:

Best Retirement Plans with options to pay single premiums

Full insurer Retirement Plan details may be found here:

Case Study Illustrations:

For Aviva MyLifeIncome, it is suited for 

  • Those who prefer a capital guarantee from the end of the Accumulation Period onwards
  • Benefit from the stable returns – guaranteed cash benefit & non-guaranteed cash bonus
  • Low-risk investment vehicle
  • Guaranteed issuance savings solution
  • Guaranteed income stream for whole life


 

Claims & Contact Information
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