CPF-LIFE Liquidity is terrible, inflation-protection is limited (i.e. Escalating payout plan), although payout_rate is high (Y cpfLife payout_rate so high). I worry about imported inflation in Singapore. Assuming I have enough reliable non-work income already, I might put in (and lock up) the minimum amount.

— why it’s a plausible idea to do the max-out only close to 65:

If you top up close to age 65, then no waiting-period like the “accumulation phase” in commercial annuity or endowment policies. At age 65, I top up 100k to RA and immediately start receiving payout from this 100k top-up. Too good to be true but I did confirm with CPF. Estimator also shows that for someone born 1955 (65 in 2020), a 275k balance (top-up) would start producing right away.

— compare to other annuities

Allianz annuity as(poor)cousin@CPF-life provides the best argument why I favor CPF-Life among all annuity products.

I have 3 commercial annuity products [FLI2, FLI2PF and LTIS]. How likely am I to hold them past 65? I will avoid giving a biased impulsive answer. IIF I were to hold these till 65, then I should reduce cpfRA top-up due to inferior liquidity of cpfLife. My commercial annuity products are fully liquid. 

— compared to other nonwork incomes

This CPF annuity has the worst liquidity but the best credit rating among all my nonwork income generators. Zero currency risk.

At 65, my risk appetite and risk tolerance are relatively low, so it may be appropriate to liquidate my overseas or local properties to hit ERS for both me and wife, but total sum would be SGD 700k in cash, possibly too ambitious.

— Warning — CPF LIFE return is higher for a person who participates only with the BRS. When you double your CPF LIFE participation amount from 90.5k to 181k, your payout range is not doubled ( $1,390 is less than 2 x $750 ). This can be easily seen from the projection by CPF. Why?

Answer from CPF officer: it’s all due to tiered (non-linear) interest rate. First 30k earns additional 2%; next 30k earns additional 1%. No magic.

So if SGD 700k cash is challenging, we should try to hit lower targets for both of us.