Full Retirement Sum (FRS) as Base

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Retirement

Full Retirement Sum (FRS) as Base

What is it?

Grow our CPF Special Account (SA) up to the Full Retirement Sum (FRS) first.

Do this before buying any other retirement income product.

Why should we do this?

CPF LIFE gives us an annuity income from age 65 onwards for as long as we live.

CPF LIFE is possibly the best insurance annuity in terms of payout for the same accumulation period.

FRS amount covers basic living expenses and should be a part of our Safe Retirement Income Floor.

We get a tax deduction for cash top-ups up to $8,000 for self and another $8,000 for our loved ones (parents, parents-in-law, grandparents, grandparents-in-law, spouse and siblings).

How do we do it?

As part of Pay Myself First, GIRO 5% of gross income monthly to top up our CPF SA.

Do lump sum top-ups from bonuses to CPF SA.

Attention!
- Top-ups to CPF SA are one-way/ irreversible, so be sure that we do not need the money.
- Even though private annuities claim to be more flexible. e.g., they may be surrendered, there are usually penalties.
- Read our MoneyOwl Retirement Philosophy to understand other options under our “CPFA" (Certainty, Probability, Flexibility,
Accessibility) Framework.