Top up spouse account to qualify for CPF Life annuity

Hi Mr Tan I am a housewife. I need your advice on the following options:

Option A - Ask my husband to top up my cpf account minimum sum to be eligible for the CPF lifelong annuity. For $50,000 I can get an estimated $438 monthly at age 65 (under R65).

The CPF website stated that this is an estimation and the payout amount can be changed over times. However once opt in, we cannot opt out should the payout amount changes. This statement bothers me. I feel that the payout amount is not guaranteed but act as a trap to get people to join in by inflating the payout amount to make it attractive.

Option B - Use the cash $50,000 to buy into annuity with NTUC at age 50 and starts the payout at age 65 for lifetime. How much will I get lifelong monthly payout commencing at age 65?

REPLY:

It is better to buy the CPF Life annuity. The CPF uses a good interest rate to calculate the payouts. They also have low expense charge, and are able to give an attractive return to the annuitant.

The CPF is not able to guarantee the payout, as it depends on future interest rate. I believe that it will continue to be better than market rate. You do not have to worry that the payout is not guaranteed.

Your first prioirty is to buy the CPF Life annuity. If you still have additional savings, you can use it to buy the life annuity from NTUC Income. You can ask them to quote you the payout and compare it with the payouts offered by other insurance companies for a similar plan.