CPF LIFE is a national annuity plan for citizens and permanent residents of Singapore. In essence, CPF LIFE is the raison d’être of CPF. It is a hedge against the adverse effects of old age and longevity risk, which can be thought of as the risk of running out of money before you pass, resulting in severe degradation in the quality of life and thus increasing the burden on the government and society at large.

As of 2025, CPF LIFE works by taking the balance of the CPF Retirement Account (RA) at age 65 and computing a fixed or increasing monthly payout based on that. In the so-called “Escalating” and “Standard” plans, the monthly payouts are guaranteed by the Singapore government, rain or shine, until you pass. (As far as we know, anyway.)

How much do you get paid though?

Unfortunately, CPF doesn’t disclose the exact formula for calculating the monthly payout amount. CPF does provide a “retirement planner” that shows the savings needed to achieve a given monthly payout amount. I found that the web page makes calls to an API which takes in the desiredPayout, inflationRate, and retirementPlan parameters and return a retirementSavings response.

Request:

{
  "desiredPayout": 8500,
  "inflationRate": 0,
  "retirementPlan": "Escalating"
}

Response:

{
  "success": true,
  "result": [
    {
      "serviceName": "Retirement.PlanMyRetirementController.CalculatePMRLifeEstimatorAndInflationAsync",
      "returnCode": "00",
      "errors": [],
      "payload": {
        "monthlyPayout": 8500,
        "retirementSavings": 2097180.99822738
      }
    }
  ]
}

This API provides us a mapping between monthly payout amount and retirement savings. By hitting the API with a couple of values, I constructed the following table, values verbatim from the API responses:

Worth noting that these values aren’t set in stone and will likely change in the future! In addition, the values above might depend on your gender or other factors (see this FAQ). But the principles remain the same. If we plot the data on a graph, we’ll see that they’re essentially linear. Write \[ \boxed{p = A c + B} \] where \(p\) is the monthly payout, \(c\) is the retirement savings, \(A\) is the slope, and \(B\) is the y-intercept. By computing linear regressions over the data, we obtain the following:

This table combined with the equation above gives the formulae to calculating the monthly payout amount based on the savings amount.

The residual plots are not the nicest looking though. For one, they reveal that the errors are highest at lower amounts, and the residuals aren’t “randomly” distributed. I can only speculate that this is due to numerical errors in the algorithms they used.

We may convert the slope \(A\) into an annual figure to the following:

This shows that ignoring time value of money and the intercept \(B\), the nominal annual payout is rather good: approximately 4.82% p.a. for the escalating plan initial payout and 6.15% p.a. for the standard plan payout. These are significantly higher than the typical annual returns from a low-risk SGD-denominated fixed income investment. Of course, these are simple interest, in that the payouts can’t be reinvested to benefit from compounding.

Observe from the graph of initial monthly payout that the values for the escalating plan are lower than those for the standard plan. How much lower? The ratio is given by \(p_e/p_s\) where \[ 0.785 < \frac{p_e}{p_s} = \frac{0.0040229096 c + 63.295237}{0.0051220422 c + 77.7649} < 0.814. \] Given that the escalating plan starts with a lower monthly payout, but increases by 2% each year (as of 2025), how long does it take for it to overtake the standard plan? Let \(r = 0.02\), and \(n\) the number of years. Then it’s just a matter of solving \[ \left( 0.0040229096 c + 63.295237 \right) \left(1 + r\right)^n = 0.0051220422 c + 77.7649, \] for \(n\), giving \[ n = \frac{\displaystyle \log\!\left( \frac{0.0051220422 c + 77.7649}{0.0040229096 c + 63.295237} \right)}{\log(1+r)}. \] Observe that \(10.39 < n < 12.20\) for all \(c > 0\) if \(r = 0.02\). That is, it takes around approximately 11 years (depending on the savings amount) before the escalating plan crosses the standard plan. You would be at approximately age 76 then.