Best Retirement Plans Singapore 2020 – The Ultimate Guide

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Last Updated on by Tree of Wealth

Planning for retirement has been a dilemma for some. Should you go for a retirement endowment plan, or go for a savings plan instead?

Basically, retirement marks the end of striving hard in your career that has been built over the years and the start of enjoying golden years. Conducting meetings, giving presentations and attending to clients is soon replaced with a spending time with family sprinkled with holidays. Although many people look forward to this idea, a lot more get worried about losing a steady income source. 

With the recent change in retirement plans in the market, namely the launching of Aviva’s new MyRetirementChoice II, the MyRetirementChoice is withdrawn on 26th August 2020. That being said, some of the features that made the original MyRetirementChoice your retirement choice may not necessarily be your best choice. Here in this latest update we look at how the most competitive Retirement plans in Singapore compare and fare with one another.

Why do you need a retirement plan?

A good retirement plan will help alleviate any stress that you may be having with regards to retirement. Your CPF LIFE payout will help boost your income during this period and assist you acquire your basic living needs.

You should, however, not expect the CPF Life cover to give you an extravagant lifestyle. But why do you need a retirement plan? Here are some questions to help:

  • Would you prefer a retirement plan that is more flexible and able to control?
  • Are you making preparations for sustaining your financial lifestyle once you retire?
  • Do you feel the need to maintain a specific lifestyle even as costs increase daily?
  • Do you want to do things that need discretionary spending such as traveling overseas when retired?
  • Do you consider predictability and stability to be important when choosing a financial product to maintain your stream of income during your retirement period?

If you have answered yes to a majority of the questions then a retirement plan should be in consideration to ensure that you always have a steady flow of revenue.

What are some of the best retirement plans in the market?

Although CPF Life is a great retirement plan that ensures you have a fixed stipend at the end of each month, it may not be sufficient to fulfill a luxurious lifestyle. As mentioned before in our CPF life article, the amount that you will get will be sufficient to cater for your basic needs but will not accommodate further. The CPF Life also falls short on other factors when compared to other retirement plans in the market. For example, it does not cater for old age needs such as increased risks of sicknesses or even disability.

Moreover, CPF Life lacks the flexibility to allow you to tailor the sums of the payout along the way or to choose a lump sum instead of the monthly payout. To avoid these challenges, it is recommended that you combine CPF Life with other private annuity/retirement plans. It is worth noting that the retirement plans you choose are complimenting products from both the government and the private insurer. They are not competitors. When paired together, the retirement plans or annuities and the payouts from your CPF life will ensure you can supplement your income when you retire. With these, you can double your payout multiplier due to disability or when you can’t perform a minimum of 2ADLs (Activities of Daily Living).

With that being said, there are a lot of commercial retirement plans. Each of them has different offerings and benefits but work to ensure you can maintain your lifestyle even after retirement. Most of these plans are based in paying a fixed premium term that you wish, a maturity period and a payout period. But first things first…

How do we choose the best retirement plans?

There are a lot of factors that informed our top choices for some of the best retirement plans on the market.

What was most important was, however, the fact that all these plans are capital guaranteed and also include an extra non-guaranteed benefits component. What does this mean for you? Aside from the extra monthly payments, each of these plans comes with a protection component. This may include a death benefit and a payout in case of disability. Here are some of the things we considered when picking 3 Best Retirement Plans in Singapore In Terms of Coverage, Guaranteed Returns and Flexibility;

  • Guaranteed and non-guaranteed rate of financial returns and even payouts
  • Premium term of Single Premium/5/10/15/20/25
  • Accumulation and Payout Period
  • Flexibility with regards to payouts and no minimum age required
  • The features of riders that complement health coverage (Additional guaranteed payout)
  • Unique product features in each retirement plan
  • Disability leniancy in claim payout
  • Policy flexibility available for period of income payout

Key Benefits At a Glance

Choice of Premium/Payout Term

Premium Term

Aviva singapore

5 Years

Single Premium

5 Years

10 Years

5 Years

10 Years

15 Years

10 Years

Regular Pay – Premium Payment Until 5 Years before Payout Age

20 Years

15 Years

25 Years

20 Years

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Payout Term

Aviva singapore

5 to 35 Years

5, 10, 15, 20 Years of Payout or Lifetime Payout

10, 20, 30 years

Payout Years Adjustable Before Payout Years

Payout Years Adjustable Before Payout Years

Payout Years Adjustable Before Payout Years

 Choice of Accumulation Period

Accumulation Period

Aviva singapore

0 – 40 Years

Starts From 0 Year

Minimum of 5 Years

 

Payout Term

Aviva singapore

5 to 35 Years

5, 10, 15, 20 Years of Payout or Lifetime Payout

10, 20, 30 years

Not Adjustable

Accumulation Period Adjustable Before Payout Years

Accumulation Period Adjustable Before Payout Years

Comparison: Non-smoker, Female 40 Years Old

Retirement Plan

Aviva singapore

Premium Term

10 years

10 years

10 years

Payout Age

65 years old

65 years old

65 years old

Payout Period

20 years

20 years

20 years

Guaranteed Monthly Payout

$500

$500

$500

Non- Guaranteed Additional Cash Bonus

$746.5

$342.16

$437.95

Non- Guaranteed Additional Monthly Income

$171.41

$91.01

Annual Premium

$9,738.60

$6,519

$6,167

Best Retirement Plan for Disability & Highest Guaranteed – NTUC Gro Retire Ease (Previously RevoRetire)

  • Currently Highest Guaranteed
  • Choice of payout term – 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.
  • Additional Guaranteed 1x Monthly Income Benefit if cannot perform any of the above during retirement pay-out period.
  • 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 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

This plan includes a death benefit that offers a 105% pay-out of all net premiums paid while also adding a 100% of terminal bonus if the insured person dies during the accumulation period. Guaranteed acceptance also means that the plan does not need any medical underwriting. This plan offers the best disability benefit for a number of reasons. For example, it offers a waiver of paying any premiums for the remaining period. You also get a lump sum benefit worth six month of benefits in the event that any of the following occurs.

Best Retirement Plan for Retrenchment & Premium Freeze Benefit – Manulife RetireReady Plus II

  • Disability Benefit – premium waiver if 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
  • Retrenchment Payout – 40% of Annual Premium/10% for Single Premium when retrenched or unemployed for a consecutive period of 30 days
  • Premium Freeze Option. Stop paying premium for 1 year while keeping your policy in forced
  • 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.
  • Payable via Supplementary Retirement Scheme (SRS)
  • Option to change payout terms 2 years before retirement

The Supplementary Retirement Scheme option

Manulife RetireReady has another great option that allows you to use funds from your Supplementary Retirement Scheme (SRS) as a single premium. SRS is a savings plan that can complement your CPF savings while also allowing you to enjoy tax deferment once you transfer it to your retirement plan.

Best Retirement Plan for Flexibility –Aviva MyRetirement Choice II

Aviva singapore

  • 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
  • Choice to exercise the Fast Forward Option to receive a lump sum before your income payout.
  • Choice of retirement age – Retire at any
  • Choice of pay-out term – from 5 to 35 years.
  • 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.

High Death/ TPD/TI Coverage

While the other insurers offer 105% of death coverage, Aviva’s rider EasyTerm provides a lump sum payout of up to 5 times the plan’s basic annual premium. For disability benefits, there is a waiver of all future premiums for permanent or partially blind, as well as if they are under TPD (Total Permanent Disabled), unable to perform 3 out of 6 Daily Activities, 2 times of monthly guaranteed monthly income will be paid out.

While it is the most flexible when it comes to premium and accumulation years, allowing to retire at any age, it is now one of the most expensive retirement plan in the market.

Interested to learn more?

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Premiums

Retirement Plan

Aviva singapore

Guaranteed Monthly Payout

$500

$500

$500

Non- Guaranteed Additional Cash Bonus

$746.5

$342.16

 

$437.95

Non- Guaranteed Additional Monthly Income

$171.41

$91.01

Total Monthly Income (Including Non-Guaranteed)

$1,417.91

$933.19

$937.95

Annual Premium

$9,738.60

$6,519

$6,167

*Comparison based on 40 year-old Female Non-Smoker, 10 years premium term and 20 Years Payout Term from 65 Years Old.

Yield

 

AvivaMyRetirement Choice II Aviva singapore

Manulife RetireReady Plus II

NTUC Gro Retire Ease

Guaranteed Income

$1,000

$1,000

$1,000

3.25% p.a

$1,333.83

$1,175.68

$1,204.70

4.75% p.a

$2,214.83

$1,640.46

$1,682.40

Pay-out Term

20 years

20 years

20 years

Premium Term

10 years

10 years

10 years

Premium

$19,449.40

$14,413

$14,461.75

Guaranteed Yield

0.83%

2.03%

2.03%

3.25%

1.99%

2.70%

2.80%

4.75%

4.10%

4.09%

4.20%

Conclusion

Like all retirement plans, each of these schemes has their own advantages and benefits. While it is important to consider the maximum payouts when choosing a plan, you should also ensure you consider life circumstances and your specific financial plans.

Want to find out which is the best for you? Not sure which is most suitable for your needs? Drop us a message below and get in touch! Get all three quotes here for a hassle free experience!

Our financial consultants will use your input and preferences to draft proposals for you. Your information provided will only be used for communication.

All the comparisons will be done according to your needs to get you the best retirement plan.

Fill in your inquiries below!

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