3 Best Retirement Plans in Singapore In Terms of Coverage, Guaranteed Returns and Flexibility
CPF Life makes a good Retirement plan in the sense that you get a fixed amount of pay-out each month following retirement. However, the amount of pay-out may not be adequate to fulfil one’s retirement lifestyle aspirations. Compared to other retirement plans in the market, it also falls short on certain aspects. For instance, CPF Life does not quite provide for old-age needs, such as the increased risks of illness or disability.
Furthermore, unlike commercial plans – CPF LIFE lacks flexibility in allowing you to receive different amounts of pay-out along the way, or for you to choose to receive a lump sum instead. To make up for these gaps, it is best to combine CPF LIFE with another retirement plan.
Here, we look at 3 of the best retirement plans and examine their key differences and benefits to bring you the ideal solution in supplementing your retirement lifestyle. Before we elaborate on each of these plans in detail, I would like to highlight some of their basic features: Most retirement plans available here are based on a
- Fixed premium term of your choice,
- An accumulation period and
- A payout period.
For instance, if Ivan is currently 40 years old, his retirement plan may look like the following:
- 10-years Premium term: 41 to 50 years
- 10-years Accumulation period: 51-60 years old
- 30-years Payout Period: 61 to 90 years old.
Here are a few highlights
Best Retirement Plan for Disability Payout & Guaranteed Income – NTUC Gro Retire Ease (Formerly NTUC RevoRetire)
Best Retirement Plan for SRS & Retrenchment Payout Benefit – Manulife RetireReady Plus II *Replaced RetireReady Plus 09/04/2020
Best Retirement Plan for Flexibility – Aviva MyRetirement Choice II *Replaced Aviva MyRetirement Choice 01/08/2020
How do we filter?
Most importantly, ALL of these plans are capital guaranteed and encompass an additional non-guaranteed benefits component. This means that as long as you stick and follow through with these policies, you are guaranteed to receive more (in the form of monthly payouts) than the total amount you saved into these policies. On top of the monthly payouts, each plan comes with a protection component as well, which includes a Death Benefit, and all 3 selected plans include an income pay-out for disability.
Our pick for the 3 Best Retirement Plans in Singapore In Terms of Coverage, Guaranteed Returns and Flexibility are based on the criteria below:
- Flexibility in terms of payout with no minimum age
- Flexibility in terms of payout with no fixed period from 1 – 35 years income
- Guaranteed Returns in terms of highest guaranteed yield with capital guaranteed
- Coverage in terms of leniency of claim in the event of disability or illness
- Product features unique to the listed retirement plans
Best Retirement Plans for Disability Payout & Guaranteed Income – NTUC Income Gro Retire Ease (Formerly NTUC RevoRetire)
Why is NTUC Income Gro Retire Ease good?
- (Highest in Guaranteed Income) – With a guaranteed yield at maturity of up to 2.70% p.a., you can be assured of a steady stream of income in the form of guaranteed monthly cash benefits during your payout period.
- Choice of premium term – 5 years, 10 years, or up to 5 years before the end of your accumulation period.
- Choice of retirement age – Start receiving your monthly cash benefits after an accumulation period of just 10 or 15 years, or at age 50, 55, 60 or 65.
- Choice of payout term – You can set the number of years (10, 20 or 30 years) to receive your monthly cash benefits. Enjoy the flexibility to change your selection any time before your first monthly cash benefit is due.
- Death benefit – Pay-out of 105% of all net premiums paid, and 100% of terminal bonus if death occurs during the accumulation period. Additional 105% of all net premiums paid if accidental death happens before age 70.
- (Best in Coverage) Disability Benefit – Waiver of all future premiums on the basic policy for the remaining premium term. Pay-out of a lump sum benefit, equivalent to six times of the monthly cash benefit is accorded when any of the following occurs during payment period:
- Loss of use of one limb
- Loss of speech
- Loss of sight of one eye
- Loss of hearing
- Additional Guaranteed 1x Monthly Income Benefit if cannot perform any of the above during retirement pay-out period.
- Guaranteed Acceptance feature for the Main Plan.
Why it may not be suitable for you?
- Choice of payout term limited to only 10 years, 20 years or 30 years.
- Payment term limited to only 5 or 10 years or Regular pay
- Earliest Retirement Age is 50
- Retirement Age is fixed @ interval of 5 years e.g. 50/55/60
- Does not have single premium option
- No SRS Options
Highest Guaranteed Income and Flexible Payout Term
The Highest Guaranteed yield at maturity of 2.70% p.a. base on
– Male, age 20
– Premium Term 5 years
– Receives the guaranteed monthly cash benefit and non-guaranteed cash bonus for 30 years, starting from age 65, projected non-guaranteed yield is at 4.84%.
The plan also comes with cash benefit option where you can choose to accumulate your cash benefit and bonus at an interest of up to 3.25% per annum.
NTUC also gives the policy owner the flexibility to change their pay-out term at any point before the first monthly cash benefit pay-outs during the retirement age.
Best Retirement Plan for SRS & Retrenchment Payout Benefit – Manulife RetireReady Plus II
Why is Manulife RetireReady Plus II good?
- Choice of limited premium term – Single Premium, 5, 10, 15 or 20 years.
- Choice of retirement age – Retire at 50, 55, 60, 65 or 70 years old.
- Choice of payout term – 5,10,15,20 years Payout or Lifetime Payout.
- Disability Benefit – Waiver of all future premiums if policyholder is unable to do 2 out of 6 activities of daily living (ADL)
- Additional Guaranteed 1x Monthly Income Benefit if Loss of Independence (inability to do 3 out of 6 ADL) occurs during your retirement pay-out period.
- Disability illness payout due to Loss of Hearing, Loss of Speech and Major Head Trauma – NEW!
- (Best in Retrenchment Payout Benefit), 40% of Annual Premium Paid out in the event the life assured is retrenched or unemployed for a consecutive period of 30 days – NEW!
- Premium Freeze Option. Stop paying premium for 1 year while keeping your policy in forced – NEW!
- Additional Guaranteed 0.5x Monthly Income Benefit if Intermediate Stage Loss of Independence (inability to do 2 out of 6 ADL) occurs during your retirement pay-out period.
- The plan does not require any medical underwriting.
- (Best for SRS) Payable via Supplementary Retirement Scheme (SRS)
Why it may not be suitable for you?
- Lifetime annuity option has a very low starting income payout
- Earliest retirement age is 50
- Retirement age is fixed at intervals of 5 years eg. 50/55/60
- Income payout limited to intervals of 5 years as well
The SRS Option & Retrenchment Benefit Payout
Manulife is the first insurer to come out with the retrenchment benefit payout option. The scheme pays the life assured a lump sum which consist of 40% of the annual premium in the event the life assured has been retrench and unemployed for 30 consecutive days. There is also a premium freeze option where the life assured can exercise after a minimum of 2 policy years.
Another fabulous feature of the Manulife RetireReady Plus is that it allows you to use the funds in your Supplementary Retirement Scheme (SRS) to pay for the premium as a single premium. As some of us might know, SRS is a savings plan that helps to complement your CPF savings for retirement and one of its most attractive factors is that you enjoy tax deferment when you contribute to your account.
So for those who have been contributing to your SRS account diligently, you can use the money in this account to pay for the premium of the Manulife RetireReady Plus since it counts as a Single-Premium product.
Best Retirement Plan for Flexibility – Aviva MyRetirement Choice II
Why is Aviva MyRetirement Choice II good?
- (Best in Flexibility) Additional payouts under the Care Income Benefit should you be unable to perform at least 2 out of 6 ADL during the Income Payout Period, plus the choice to exercise the Fast Forward Option to receive a lump sum before your income payout.
- Choice of limited premium term – 5, 10, 15, 20 or 25 years.
- (Best in Flexibility) Choice of retirement age – Retire at any age.
- (Best in Flexibility) Choice of pay-out term – from 5 to 35 years.
- Death benefit – Death and Terminal illness coverage.
- Disability Benefit – Waiver of all future premiums if policyholder is unable to do 2 out of 6 activities of daily living during payment
- Additional Guaranteed 1x Monthly Income Benefit if policyholder cannot perform at least 2 out of 6 activities of daily living during retirement pay-out period.
- Guaranteed Acceptance feature for the Main Plan and its riders.
Why it may not be suitable?
- Lower guaranteed yield than the older plan
- No Single Premium Option
- No SRS Options
Most Flexible Retirement Plan
The Aviva MyRetirement Choice II is the most flexible plan among the 3 plans, it allows you to start drawing out your monthly income right after the end of the premium payment term. The plan allows an accumulation term from 0 to 29 years as well as an income payout term anywhere from 5 to 35 years. In addition to this, there is the flexibility of receiving your disability income in a lump sum without having to wait till retirement age to cash out.
Now, let’s look at how these 3 products compare*:
As with all retirement plans, each retirement plan has its own advantage and strength. Individuals should not simply base their decision on maximum payouts alone, but with regards to their life circumstances and financial plans.
What do you do next?
Get all three insurers quotes for the best Coverage, Guaranteed Returns and Flexibility Retirement Plan Here !
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All comparisons done are solely based on your individual needs.