3 Best Retirement Plans in Singapore for Inflation-proof income (2020 Edition)

The cost of living continues to go up, even during your retirement years. Your income payout needs to increase accordingly to maintain your standard of living.

Managing the rate of returns on your savings against inflation is important. Over a prolonged period of time, inflation is generally expected to hover around the range of 3% to 3.5%. But what if you wish to have an income stream that keeps up with the cost of living?

InterestGuru.sg presents a comprehensive list of the 3 best retirement annuity plans that provide an increasing payout to ensuring that your income keeps up with inflation:

The objectives of getting a retirement plan

The objective of a retirement annuity plan is to set aside a sum of funds to compound and generate financial returns over a set period of years or for a lifetime.

With proper knowledge by a financial advisor, it can be structured for the following:

  • Provide a higher guaranteed rate of returns compare to bonds
  • Ensure that unforeseen life or financial event does not disrupt your retirement goals
  • May further provide liquidity and guaranteed principal if withdrawal is required at any specific point in time during your retirement
  • Assist with an additional monthly payout on top of the expected income if you are disabled during the payout period

A retirement plan can generate a moderate rate of returns while keeping your goal of financial stability during your retirement years.

Read about: How can you accumulate a million dollar? (Realistically)

Read about: 5 reasons to invest in a retirement annuity plan *NEW*

Reasons to get a retirement plan with an increasing payout

For most individuals, keeping up with inflation is the main reason for getting a retirement plan with an increasing payout over time. If you are still considering the right retirement plan, an inflation-proof payout may be an attractive option depending on your needs.

The features commonly found in retirement plans with an increasing payout includes

  • Monthly or yearly income payout that is guaranteed to increase with the inflation rate
  • Options to accumulate payout for a higher or lump sum financial returns
  • Limited years of making payments to allow for maximum financial growth on your funds
  • Assurance of an income stream even if you are disabled and unable to continue paying during the defined payment period
  • The availability of a guaranteed or non-guaranteed lump sum at a specific time during your retirement
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Read about: Effect of compounding returns on your funds

Read about: How can you keep up with inflation on your saving?

The best retirement plans with an increased payout over time

This list of the 3 best inflation-proof retirement annuity plan is present in no order of preferences or ranking. The Individual plans stated each provide distinct product features and unique benefits.

Best inflation-proof retirement plan for highest income and maturity value – Aviva MyRetirementPlus

Aviva Ltd Singapore
Aviva Ltd Singapore

MyRetirementPlus from Aviva is structured to please even the most conservative and risk-averse individual with a heavy emphasis on guaranteed financial values and returns.

This makes the plan attractive to those seeking an inflation-proof income stream and financial stability.

Product features and benefits include(s):

  • Monthly Income that is Guaranteed to increase at a rate of 3.5% yearly
  • 100% Capital Guaranteed upon reaching your selected retirement payout age
  • Full or partial withdrawal of a Guaranteed lump sum upon reaching your selected retirement payout age
  • Additional Non-Guaranteed lump sum at the end of your retirement payout period

Compared to your bank deposits or savings account, this would obviously be superior if your intention is to set aside the funds for drawdown during your retirement.

Main advantages of Aviva MyRetirementPlus

  • Significantly higher guaranteed monthly payout
  • Highest overall total guaranteed payout
  • Option to partially or fully surrender the policy for lump sum upon reaching retirement

Main disadvantages of Aviva MyRetirementPlus

  • No non-guaranteed income payout during retirement payout period
  • Non-guaranteed payout is only paid at the end of the payout period

Read aboutAviva MyRetirementPlus (The complete policy review)

Best inflation-proof retirement plan for lifetime income payout – AXA Retire Happy Plus (Inflated payout)

AXA Retire Happy Plus II
AXA Retire Happy Plus II

AXA Retire Happy Plus is a highly flexible retirement plan with a range of premium payment terms and a wide range of age you can select for the commencement of your retirement income.

Product features and benefits include(s):

  • Premium payment options: Single, 5, 10, 15, 20, 25 years
  • Retirement age options: Age 50, 55, 60, 61, 62, 63, 64, 65, 70
  • Monthly Income that is Guaranteed to increase at a rate of 3.5% yearly
  • 100% Capital Guaranteed upon reaching your selected retirement payout age

AXA Retire Happy Plus has the advantage of being highly flexible when it comes to policy options for your retirement planning.

Main advantages of AXA Retire Happy Plus

  • Income is paid on a yearly basis instead of over a 12 months period
  • Multiple options to built your own retirement plan
  • Very high projected income payout

Main disadvantages of AXA Retire Happy Plus

  • Lower guaranteed payout
  • Overall financial returns are highly dependent on the non-guaranteed payout

Read about: AXA Retire Happy Plus (The complete policy review)

Best inflation-proof retirement plan for upfront cash payout – Great Eastern Supreme Retirement

Great Eastern Supreme Retirement
Great Eastern Supreme Retirement

Great Eastern Supreme Retirement rewards you for reaching your retirement age with a lump sum bonus of 24 times your selected monthly income. Every five years, your retirement income will be raised by 25% of your first monthly payout – so you stay ahead of inflation.

Product features and benefits include(s):

  • Upfront lump sum payout of 24 times of your selected monthly income
  • An increase in the guaranteed monthly retirement income by 25% every 5 years
  • Additional Non-Guaranteed lump sum at the end of your retirement payout period

Great Eastern Supreme Retirement has the main advantage of an upfront cash payout of 24 times of monthly income.

Main advantages of Great Eastern Supreme Retirement

  • High guaranteed monthly payout
  • Receive lump sum of 24 months payout upon retirement age

Main disadvantages of Great Eastern Supreme Retirement

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  • Lower guaranteed income payout
  • Lower non-guaranteed income payout

Read about: Great Eastern Supreme Retirement (The complete policy review)

A detailed comparison of inflation-proof retirement plans

We have compiled a detailed comparison of retirement plans with an inflation-proof payout. Your income stream is guaranteed to increase over on a yearly or scheduled basis. The financial figures are based on a male at age 40 with the intention to pay insurance premiums for only 10 years.

The financial objective of the retirement plans stated is to receive an inflation proof payout starting at age 65, lasting for 20 years to age 85.

Note: For users on mobile devices, you may have to swipe/ scroll on the chart to view the complete data.

 
Inflation-proof income payout retirement plans for: Male, Age 40, Retire at Age 65
 
Plan Details
Aviva MyRetirementPlus
(Payout for 20​ years)​

AXA Retire Happy Plus (Inflated payout)
(Payout for 20​ years)​

Great Eastern Supreme Retirement
(Payout for 20​ years)​
Annual Premium
(Payable for 10 years)
$21,234$20,126$19,992
Yearly Income Payout
(Guaranteed/ Projected)
$15,600/ N.A
(Guaranteed 3.5% p.a increase on the $15,600 payout)
$10,900/ $23,108
(Guaranteed 3.5% p.a increase on the $10,900 payout)
$12,600/ $16,380
(Guaranteed 25% increase on the $12,600 payout every 5 years)
Total Guaranteed Payout
(Guaranteed only)
$441,160$308,637$371,700
(Includes lump sum $25,200 at start of retirement)
Total Projected Payout
(Guaranteed and Non-Guaranteed)
$785,468
(Includes non-guaranteed lump sum of $344,304 at end of retirement payout)
$654,310$683,550
(Includes non-guaranteed lump sum of $236,250 at end of retirement payout)
Additional note:
  • Scroll/ swipe left on chart to view complete financial figures.
  • Please refer to individual insurance product review for complete infomation.
  • All Projected payout includes Guaranteed and Non-guaranteed financial returns.
  • All Non-Guaranteed payout are based on the respective insurers achieving 4.75% p.a investment returns.
  • Infomation provided are accurate at the time it was published, and Interestguru.sg is not liable should there be any adjustment by the respective insurers.
Refer to: 3 Best Retirement Plan in Singapore - Increasing payout (2019 Edition)

How to get the most out of a retirement annuity plan?

Your retirement plans are meant to supplement your lifestyle and expenses in your golden years. Find a retirement plan that pays out according to your life objectives before looking at the financial figures.

After all, the yields and the financial payout will not make a difference if the retirement plan does not allow you to utilize it according to your desired retirement lifestyle.

Whenever possible, consider the following before taking up a retirement plan:

  • Would you prefer a higher guaranteed or a higher overall non-guaranteed payout?
  • Do you need the payout to increase at a fixed rate to keep up with inflation?
  • In the event of disability or Critical Illness, do you still have to continue paying your premiums?
  • What is the overall annualised yield on the retirement plan?
  • Are you expecting a lump sum payout once you reach your retirement age?
  • How much guaranteed and non-guaranteed are you expecting to receive if you have to do an early surrender of your policy during your retirement years?
  • In the event of disability during the payout period, is there any income multiplier to cover additional costs that will be incurred on your lifestyle?

Ensure that your retirement plan can address your retirement needs and concerns as much as possible. Due to the large financial commitment and long time horizon required, never compromise on what is important to you.

Read about: The Complete Guide to Retirement Planning (2020 Edition) *NEW*

Read about: 3 Best Retirement Annuity Plans – Best in Income Payout and Features (2020 Edition)

Where can I compare the payout and benefits of retirement plans and annuity policies?

It is too late to regret once you have made your financial commitment. Specific products features, benefits and payout will differ more than you think across insurance companies.

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Note: All financial figures are based on close approximate and all non-guaranteed figures are based on the higher tier of 4.75% investment returns. The sample illustrations are for illustrative purposes only and is not a contract of insurance. Early surrendering or cashing out from a Retirement plans or Annuity policies will certainly result in financial loss. In the event of doubt, always refer to the precise terms and conditions as specified in your policy contract. Seek the advice of a qualified financial professional or a licensed financial advisor before making any decision or financial commitment.

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