Your principal amount (say, 275k) is private to you, and never shared. The balance doesn’t rise after you start drawing so it depletes over decades towards zero. This balance is basically the bequest amount, which becomes zero after the “depletion year”.

In contrast, The interest amount (generated on the balance) is pooled into a shared pool.

• if you live past the “depletion year”, then your payout would come from this pool.
• Conversely, if you pass on early, then the cumulative interest “you earned” remains in the pool and will not go into your bequest.
• So some (long-living) would “gain” while others would “give”, as in all insurance products.

Not sure how much difference exists compared to commercial annuity products, but I won’t bother with them.

A CPF officer told me that in one of the payout schemes, only part of your RA balance goes into CPF-life initially, so the rest continues to earn 4%. However, things could change. I advocate detachment, impermanence…