Note: This post below has been updated on 14 October 2026.
Unanswered Questions from Retirement Income that Lasts, Legacy that Continues.
We have categorised the 28 unanswered questions from our webinar into 6 different categories for your easy viewing. The categories are as follows:
Section 1: Annuity Product Mechanics, Structure and Tax Considerations
Section 2: Age-Specific Planning and Suitability
Section 3: Comparing Private Annuities with CPF LIFE and CPF Optimisation
Section 4: Market Offerings and Havend’s Recommendations
Section 5: Alternative Income Strategies and Trade-offs
Section 6: Insurer Safety, Solvency and Regulation Protection
Section 1: Annuity Product Mechanics, Structure and Tax Considerations
1. What is the difference between Retirement Annuities and ILPs?
Most insurance annuities are structured as participating policies, which means the insurer manages the investment for policyholders and offers a guaranteed return and non-guaranteed bonus. For ILPs (Investment-Linked Policies), the policyholders select the funds of their choice and bear the risk and returns of the funds. Hence under ILP, the cash value is not guaranteed, and the value is dependent on how your selected funds are performing.
2. If I buy retirement annuities with SRS, is the payout taxable?
Under SRS, withdrawals from the SRS account are subject to tax, but there are some concession rules, one being that only 50% of withdrawals made on or after the statutory retirement age are subject to tax.
For regular SRS withdrawals and term (fixed payout period) annuities, withdrawals can be spread over a 10-year withdrawal period that starts from your first penalty-free withdrawal. You could withdraw up to $40,000 a year tax-free if you have no other taxable income, because the taxable $20,000 ($40k x 50%) falls within the 0% tax band. Any balance (other than life annuities) is deemed withdrawn at the end of the 10-year period, and 50% of it is taxable. Insurance policies such as term annuities held in SRS do not need to be surrendered at that point.
For life annuities bought with SRS, the 10-year withdrawal period does not apply. 50% of each annuity payout is subject to tax every year for as long as the payouts continue.
So, when you buy an SRS product, you also need to know how to structure it to benefit from the tax concession.
3. What are the annualised returns for fixed payout term vs lifetime plans?
It really depends on how the annuities are structured to meet your requirements, e.g. how long is the accumulation period and payout duration. In general, lifetime annuities may yield higher annualised returns, ceteris paribus, since they are spread over a longer duration. However, this depends on how long you live to receive the payouts, and a larger part of the return may come from non-guaranteed bonuses. (Tip: a meaningful annualised return should at least be above 2.5%, otherwise CPF-OA top-up might make better sense). A good annualised return should be close to or above 3%.
4. What is the historical record of major insurers being able to pay the projected non-guaranteed portion of annuities?
Such data is not publicly available. You can get a sense of it from how insurers’ life funds have actually performed, or from your own experience with policies you hold. Insurers also practise smoothing, which keeps the non-guaranteed bonuses from swinging too much from year to year.
While the historical payout rate for the non-guaranteed portion is hard to pin down, the insurers we survey generally manage bonuses conservatively and avoid sharp cuts. At Havend, our annuity selection prioritises plans with high guaranteed benefits over those relying on non-guaranteed bonuses. This gives you greater certainty of income in retirement.
5. For a fixed payout term, why is it that $150K upfront premium with a longer accumulation period results in lower payout ($900/month) vs the earlier example with a premium paid over 5 years yet with higher payout ($1,100/month)?
In the example that was provided, in the 1st scenario, the payout ($1,100 a month) was scheduled to be paid out over 20 years, while in the 2nd example the payout ($900/month) was to be paid out over 25 years. While the total premiums are the same for both scenarios, the accumulation period as well as how long you would want the payout to last will affect the monthly amount that will be paid out.
At Havend, using the RetireSURE framework, we will determine whether there is a need for an insurance annuity to supplement your retirement, what kind of insurance annuity plan would fit your need the best and how we are able to optimise your cashflow and CPF LIFE to ensure that you have a safe and reliable retirement plan. If you would like to speak to us for a RetireSURE Assessment, click this link here!
6. Is there a type of policy that pays for life but does drawdown a little on the principal to boost the payout? Maybe a drawdown of 2% of principal every year?
Yes, there might be. But what is more common are (1) those that tend to preserve the capital while receiving monthly/yearly income that lasts for life, or (2) a regular payout that depletes the capital over the payout period, say 20 years.
But beyond the structuring of the product, what is more important is how your instruments like CPF LIFE, insurance annuities and cash equivalents are built up into a diversified income stream for your retirement needs.
7. Are there fixed term payouts that pays till age 120?
For most fixed term payouts, the last payout is at age 100. The reason for this is that since it draws down from the capital, stretching the payout till age 120 might not be the most feasible. For annuities that pay out till age 120, the payout would be from the bonuses, preserving the capital, which might suit the clients’ needs better.
8. Can the secondary insured option still be triggered when the monthly payouts to the primary insured have started?
Yes, the secondary insured can be appointed at any time, subject to the max age limits of the secondary insured. While this differs from insurer to insurer, generally the maximum age limit would be age 70 for spouse and age 18 for child at the time of appointment.
Section 2: Age-Specific Planning and Suitability
1. Roughly how much do I need to pay to get $5,000 per month as a 55 year old?
There are a few factors to take into account when considering an annuity. Factors like when you would want the payout to start, how long you would like the payout to last, what kind of annuity (fixed term or lifetime), whether the $5,000 in this instance refers to purely the guaranteed payout or total payout as well as the insurer who provides the solutions will affect the premiums needed to fund the policy.
At Havend, through the RetireSURE framework, we will determine all these factors and customise it to your needs to find a solution that suits you the best.
2. I plan to retire in 3 years. Would the time period be too short for me to buy an annuity now?
Not at all. Annuity is a product to support your retirement income plan, and it has to work together with your other instruments like CPF-OA, CPF LIFE, Cash and its equivalents. What would be useful for people in your situation is to first have a clear understanding of how your retirement income should look like, how your various instruments come together to support it, and how to mitigate medical and health risks. If there is a gap, then that is where instruments come in. You are encouraged to write in for a RetireSURE assessment, especially so when your retirement is so near.
3. Is it too late to consider annuities for a person in mid-60s? Given that there would be a accumulation period, that means the payout would be in 70s/ mid-70s?
Whether it is too late or not really depends on the situation. While it is true that most annuity plans do come with an accumulation period, there are solutions which pay out after 3 years. Furthermore, it could be a case where a client would like for the payout to start in their 70s, to cater to the later part of the retirement years. Since annuity plans are highly customisable, it would be best to ascertain first whether an annuity plan is necessary and then structure the insurance annuity around that need since everyone’s needs might be different.
We invite you to write in and we will be happy to do an overall assessment of your retirement through our RetireSURE assessement.
4. Do you have retirement annuities for someone below 60 years old?
At Havend, using the RetireSURE framework, we will determine whether there is a need for an insurance annuity to supplement your retirement, what kind of insurance annuity plan would fit your need the best and how we are able to optimise your cashflow and CPF LIFE to ensure that you have a safe and reliable retirement plan. Only then would we be able to see which is the best type of Insurance Annuity that is able to add to your retirement portfolio.
5. Does it make sense to get lifetime annuities for a retiree?
It really depends on what your needs as a retiree are, and whether your assets are able to support funding an annuity plan, since there is usually an accumulation period involved before the payout begins. Typically, lifetime annuities preserve the capital upon completion of the accumulation period, and this is well suited for clients who would prefer liquidity in their spending plan, in the event that they require funds for unforeseen circumstances.
At Havend, using the RetireSURE framework, we will analyse first to see if there is a need for an annuity plan in the first place and if it makes sense for the clients’ retirement portfolio. Only then, will we be able to provide a solution on which annuity plans would suit the client the best.
Section 3: Comparing Private Annuities with CPF LIFE and CPF Optimisation
1. How do the returns of insurance annuities compare to CPF LIFE?
CPF LIFE is the best annuity in terms of payout for life per capital dollar. However if death occurs early on, the net return on CPF LIFE could be zero (basically return of capital) and much lower than 4%. For insurance annuities, the total projected return typically ranges from over 2% to about 3.5%, of which the guaranteed return is about 1-1.5%, depending on how it is structured.
2. Do annuities apply to those already in their 70s? Also, is it better to keep in your ordinary account which gives 2.5% interest under voluntary housing refund?
Most annuities are available for those below the age of 70. There are a few up to age 75.
Voluntary Housing Refund is a good way to park spare money into your CPF to earn interest, but note how the refund is allocated if you are 55 or older. The refund first goes to your Retirement Account (RA) until your Full Retirement Sum (FRS) is met. Only the amount above the FRS stays in your Ordinary Account (OA), where it earns 2.5% interest and can be withdrawn anytime. You can only refund up to the CPF amount (plus accrued interest) you have used for your property.
3. If I’m already 65, and I’ve maximised my CPF LIFE contributions, does it still make sense to have separate annuities?
It depends on one question: do your CPF LIFE payouts cover your essential expenses?
If they do, then a separate annuity is optional. If there is still an income gap, an insurance annuity can close it. It turns part of your savings into a guaranteed income over a specific period (e.g. more money in your early retirement years) or for life. Annuities can also be surrendered in case liquidity is needed and can also be structured to provide continual income for surviving spouse or children, and bequest as legacy if needed.
At Havend, we size this by first mapping your essential expenses against your CPF LIFE payouts, then deciding whether an annuity is needed to cover the difference. Click this link to speak to us!
4. Why not CPF OA if the payout is less than 2.5%?
CPF-OA can definitely be used to fund your retirement income, together with CPF LIFE. Depending on your income needs and the size of your CPF-OA, you may need to drawdown the capital of your OA and if so, it would deplete over time. Psychologically, as capital reduces to a certain personal threshold, people may become more cautious and stingy on their spending even though they can afford to spend. Annuities on the other hand, give a regular income payout, which people tend to appreciate in retirement as it can help to better manage cashflow. For annuities to make financial sense, the projected annualised return should be close to or above 3%.
5. Should a person on RSS move to CPF LIFE?
Retirement Sum Scheme (RSS) is the predecessor to CPF LIFE. Under RSS, your annual payout is higher but will cease when the capital runs out. CPF LIFE, though lower payout, is payable as long as you live. So CPF LIFE hedges against longevity risk, but not RSS.
However, deciding to switch to CPF LIFE is not so straight-forward, as you might need to consider your health (whether you foresee living to ripe old age) and whether you are able to accept a lower payout. Note also that RSS members can only opt to join CPF LIFE before they turn 80.
6. If I have $100K to $200K OA balance, what accumulation period would be needed to achieve better than the projected 2.5% return from CPF OA. I’m not trying to achieve the RA 4% of the CPF LIFE return level. Is there an Annuity Product that can do that?
Yes, there is a good selection of annuities that could yield projected annualised returns above 3%, by prolonging the accumulation period to at least 10 years, or by extending the payout duration. But products only make sense if there is an income gap in your retirement plan, after considering your CPF LIFE, Insurance annuities and Cash equivalents like CPF-OA. So, you might want to write in for an RetireSURE assessment to understand how your retirement plan should look like.
Section 4: Market Offerings and Havend’s Recommendations
1. Which are the top 3 private insurers for insurance annuities?
Such rankings are generally dynamic as it depends on how you want the structure to be (which insurers tend to differentiate), and dependent on factors like age, payout duration, guaranteed return ratios. We do have an internal ranking criteria based on certain requirements but it is not by insurer but by plan type.
2. Who are the insurers Havend is working with?
We have 8 insurers, namely Income, Singlife, HSBC Life, FWD, Etiqa, China Taiping, Tokio Marine and Raffles. Together, they offer a broad and competitive range of products. We do not distribute certain insurers like AIA or Great Eastern as they are not open to working with external financial advisers.
3. What are the best fixed term policies Havend would recommend currently and what are the best ones for capital preservation in terms of guaranteed portion?
There are a few that we would recommend but it is not appropriate to share here, as everyone’s financial situation, needs and resources are different. The recommendation would also be based on whether there is an income gap, and how your Cash, CPF-OA, CPF LIFE are being structured in your retirement plan. You might want to consider coming in for our RetireSURE assessment to determine if there is a need and if so which annuities might suit you better.
Section 5: Alternative Income Strategies and Trade-offs
1. One of the issues with insurance has been the high marketing/distribution costs, which eats into the returns a fair bit. Why not purchase investment grade bonds to get certainty of income plus greater liquidity (can sell if desired)? Yes, there is of course re-investment risk, but that’s a reasonable trade-off?
For bonds, if you are referring to SSB or T-bills, yes it could be, but the returns may not be attractive. Direct bonds would be another way, and I think that is what you are referring to, but many come in large minimum denominations (often $200k to $250k), so they may not suit typical retail investors. Bond prices are subject to interest rate risk, especially so if you need to sell off halfway. The trade-off is what you would need to manage. Annuities do come with their distribution cost, and they could be a better trade-off for those who prefer certainty of income and protection against longevity risk, though surrendering early may mean getting back less than the premiums paid.
2. What do you think of par fund with financing?
At Havend, we are not inclined to premium financing. Because in many cases we see, people are essentially buying a bigger policy than they can afford on their own. Though leveraging could get a potentially higher return, you are taking upon yourself higher risk, including interest rate risk and forex risk for foreign currency loans. These added risks need to be properly managed as otherwise it could go against you.
3. How would you compare taking an annuity versus putting the cash in government bonds or other less risky instruments? I wish to minimise the fees as much as possible.
To create a reliable income for your essential retirement expenses you need the instrument to be conservative and not subject to financial market risk. There are typically 3 types of instruments for this, namely (1) Cash, SSB, T-bills, (2) CPF LIFE and CPF-OA, (3) insurance annuities.
Compare the instruments on these 3 attributes, (1) returns, (2) liquidity (can it be surrendered), (3) bequest, and you might find that insurance annuities could end up with a better trade-off. Depending on a person’s needs, insurance annuities could give reasonably good returns (but lower than CPF RA), can be surrendered in an emergency (though possibly at a loss in the early years), and could be structured to give a legacy (guaranteed capital) for beneficiaries.
4. Compare traditional whole life par fund for lifetime income vs eg HSBC indexed flexi income in $USD, guaranteed yearly income till age 120. How does one non savvy investor interpret these 2 plans? Which would be more suitable for retirees?
These 2 types of plans are designed with retirement income and legacy in mind but they are structured differently.
Traditional whole life or endowment policies with income payout typically offer guaranteed benefits alongside non-guaranteed bonuses depending on the participative fund performance.
An index-linked plan denominated in USD links its policy value to a market index and may offer the potential for increasing income, subject to the policy terms. It has a more complex structure, including fees and charges, index crediting rules and floor rates. Being denominated in USD, it also carries exchange-rate risk.
In comparing, consider your needs and what matters most to you in a retirement income solution:
– Guaranteed income: How much is guaranteed, and when does it start?
– Currency: Are you comfortable with the exchange-rate risk?
– Liquidity: How easily can you access your money if your needs change?
– Legacy: How much would you like to leave behind for your loved ones?
– Understanding: Can you explain how the policy works and the trade-offs involved?
Ultimately, the right solution depends on your needs, priorities, and your ability to understand the policy terms and conditions.
Section 6: Insurer Safety, Solvency and Regulatory Protection
1. What is the possible risk of insurer bankruptcy? Is the guaranteed portion of an annuity or capital protected policy still secure? What are the rules put in place by MAS in respect to insurer liquidation?
Risks of annuities, like in any insurance products, include among other things (1) non-guaranteed bonus lower than projected, and (2) insurer exits or bankrupts. For exit, insurers are still required to service the policies. A case in point is Zurich Life Singapore, which closed to new business in December 2015 but continued to service its existing policies, and subsequently managed to transfer them to Singapore Life (now Singlife) in 2018. For bankruptcy, there is no precedent in Singapore to date. The closest one was AIA in Sep 2008 when its parent AIG nearly collapsed, but AIA Singapore stayed solvent. We have a safety net called the Policy Owners’ Protection (PPF) Scheme, administered by SDIC, which protects policy owners of life insurance policies, up to certain limits, if a life insurer that is a scheme member fails. See: https://www.sdic.org.sg/pp_scope_of_coverage/
2. Insurer only protects for Policy Owners’ Protection (PPF) Scheme – how much is annuity protected? And if capital placed is more than the protected amount, how do we ensure the insurer will survive for decades while we retire?
For annuities, the protection is capped at $100,000 of the aggregated commuted value of guaranteed benefits (i.e. annuity payments, death or surrender benefits), per life assured per insurer (https://www.sdic.org.sg/pp_entitlement/). Only guaranteed benefits are protected; non-guaranteed bonuses that have not been declared and vested are not covered. If the capital is more than the protection cap, there is a potential loss if an insurer goes bankrupt. While the regulations over insurance companies are tight, and even though there has not been any precedent of insurer failure, it is no guarantee that an insurer will never fail. One mitigation is to diversify your policies across a few insurers.
At Havend, we provide a different and better experience, a safe place for insurance advice without the fear of being mis-sold, over-sold, or pressure-sold. If you would like an honest opinion on your current insurance portfolio, make an appointment with us today.