Anyone started ACTUAL drawdown of CPF lIfe?

sgdividends

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... Even if you add in the 'non-guaranteed' portion, it is still usually a good 10-20% lower, and we know how often insurance companies have hit their 'targets' and distributed this 'non-guarateed' 'bonus'.

* Disclaimer: When I looked into this, the BI I got was for the old AXA RetireHappy product, which was already inferior to CPF Life. From all accounts the Plus product has a lower payout so I never bothered to get updated on it.
Do u know where I can find info on all insurance companies on their historical performance on paying those non guaranteed portion ?
 

dork32

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Yes, because evidently in this forum the highest priority is making sure that we maximize heirs' wealth. Heirs are always more important than taking care of elders. :s22:

What a fabulous group of caring, elder loving individuals we've got here. Who knew potential heirs have such a powerful lobby? :D

yes giving to my heir is very important. i rather give to kids than some dogs in the streets.

george gave everything to elizabeth, who will probably give to charles
harry gave oxley to barry and siblings.

you are not married. you will not understand how parents feel.
 

dork32

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In addition to Ervino's advice never to buy longevity insurance to protect against outliving your savings, Ervino also offers this "wise" advice:

* Never ever buy medical insurance
* Never ever buy property insurance
* Never ever buy life insurance
* Never ever buy disability income insurance
* Never ever buy liability insurance
* Never ever buy long-term care insurance
this is totally rubbish. you only buy insurance that you need, not just blanket everything.
eg, i do not need life insurance now. i have more than enough to leave for my kids. yeah bill gates bought life insurance too, right? so i need it too
i need medical insurance, if i dont die, the medical bills may wipe out my savings.
 

dork32

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Anyway, like I said, no need to guess, wonder, or estimate. Just call an insurance agent to give you a BI & compare yourself.

if i find an agent, the agent will bug me like mad after this.
 

dork32

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yes giving to my heir is very important. i rather give to kids than some dogs in the streets.

george gave everything to elizabeth, who will probably give to charles
harry gave oxley to barry and siblings.

you are not married. you will not understand how parents feel.

even mr providend wants to leave money for his heir.
 

adi75

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yes giving to my heir is very important. i rather give to kids than some dogs in the streets.

george gave everything to elizabeth, who will probably give to charles
harry gave oxley to barry and siblings.

you are not married. you will not understand how parents feel.

Can be married without kids. Can be a parent without marriage.
 

savinmax

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You have no idea who I am.

there's absolutely no reason why the payouts cannot be enjoyed by heirs in the form of gifts, if that's what the recipient wants to do with them. Maybe they can even enjoy those gifts together, while those elders are still living -- wouldn't that be nice?

However, I most certainly do not believe that an elderly Singaporean ought to be eating cat food so his/her child can be a little more comfortable only after that elderly Singaporean dies. That's at least dumb, probably worse.

Yes, I know there's lots of societal pressure on elders to leave bequests, particularly in Asia. It's "culture." And you know what else it is, in modern Singapore and in today's financial realities? Dumb.

Please, look after your parents and grandparents. Let them live in dignity if at all possible, and don't pressure them into doing dumb things, such as decide whether they're going to skip today's $2 noodles and stay hungry, because of "culture." And get off your a*s and take care of yourself, if you're able. Your elders probably already gave you every possible advantage in life they could, and that's enough. Grow up, and stop acting like a child, still expecting a handout, especially if that elder shouldn't be giving anybody a handout.

A bequest is often, in a very real sense, a byproduct of a permanently lost opportunity to enjoy life a little more. Please let your elders enjoy life while they're living, OK?

One of the major reasons there was cultural/societal pressure to leave bequests is precisely to avoid the "shame" of outliving your savings and becoming a burden on children and grandchildren. But that problem is now avoidable in the modern world with longevity insurance, notably CPF LIFE, possibly with a private "top-up." That reason for bequests -- the cultural/societal pressure to make absolutely sure, insofar as possible, you never spend down your savings -- is gone.

Now, if the heir is genuinely a dependent of the elder -- physically or mentally handicapped, as an example, and in need of lifelong care -- OK, different story. Then bequests are quite important, although I'd recommend and prefer joint/survivor life annuities in that case. But otherwise, what's the point?

I concur here totally with BBCWatcher on the message and its implications. Good one, BBCW
 

Suleyman

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CPF LIFE Basic, I think you're describing.

Sorry, to be clear, it should be "Premium paid + interest accrued (during deferred period) + bonus allocated (if any, during deferred period) - annuity paid out", where deferred period is the time between the payment of your premium and the time when payout begins.

All the CPF Plans work on the same basis in calculating the bequest, except that Basic has the RA component mixed in.

Do u know where I can find info on all insurance companies on their historical performance on paying those non guaranteed portion ?

Nope and I'm not surprised this info is so hard to find, tbh, given their abysmal record in this.

While you cannot find data on this, it's easy to find plenty of articles of customers complaining about how the bonuses they got on maturity of their policies are nowhere near what was promised. Recently there was a letter to ST forum where his 'escalating' annuity plan (where in all likelihood, the escalating component was the non-guaranteed portion of his plan), never escalated.

yes giving to my heir is very important. i rather give to kids than some dogs in the streets.

george gave everything to elizabeth, who will probably give to charles
harry gave oxley to barry and siblings.

you are not married. you will not understand how parents feel.

But you will never give anything to 'dogs in the streets'.

Even on the Standard Plan, if you live past 82, when the 'bequest' amount hits $0, the amount of money that has been paid out to you in your lifetime will be greater than your premium + interest accrued during the deferment period. If you die before 82, the bequest is calculated as I mentioned above, so you have lost nothing and that 'dog in the street' has gained nothing from you.

It needs to be repeated again that CPF Life and any lifetime annuity plan is an insurance, not an investment plan. It's purpose is not to form part of an estate for your heirs, but to ensure you have an income no matter how long you live.

Whether estate planning is important or not is up to each individual, and if it is important to you, you should do so. However, CPF Life, just like any other insurance, like Medishield Life or ISPs, cannot be part of that. Having said that, once the money is in your bank account, it's up to you how you want to spend it, which includes putting it into an investment or just leaving it there so that it can form part of your estate, if you wish.

if i find an agent, the agent will bug me like mad after this.

Just say no & ignore further calls from them. /shrug
 

dork32

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However, I most certainly do not believe that an elderly Singaporean ought to be eating cat food so his/her child can be a little more comfortable only after that elderly Singaporean dies. That's at least dumb, probably worse.
i can assure you that the cats can still have their food when i grow old
 

dork32

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Yes, I know there's lots of societal pressure on elders to leave bequests, particularly in Asia. It's "culture." And you know what else it is, in modern Singapore and in today's financial realities? Dumb.

there is no pressure. i do not conform to culture.
to me it is big picture. i view my kids and myself as one entity. if you were to cut my share by a bit and enlarge my kid's share by a lot, i will take it. big picture, dumb.
 

dork32

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Now, if the heir is genuinely a dependent of the elder -- physically or mentally handicapped, as an example, and in need of lifelong care -- OK, different story. Then bequests are quite important, although I'd recommend and prefer joint/survivor life annuities in that case. But otherwise, what's the point?
i did not know that prince charles is handicapped. lhl is also handicapped. other why did lky want to leave his assets to him.
 

dork32

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Now, if the heir is genuinely a dependent of the elder -- physically or mentally handicapped, as an example, and in need of lifelong care -- OK, different story. Then bequests are quite important, although I'd recommend and prefer joint/survivor life annuities in that case. But otherwise, what's the point?

bequest means bequests lah. there is no such thing as joint survivor. you dont like it, leave singapore and go to your stupid usa lah. you want to stay here suck it up and accept the bequest system like everyone else.

this is how bbc post. how does bbc feels if i use this method of posting. bbc is a knowledgable guy. but he always lets his emotion get better of him. also he will never accept the other side.

there is nothing wrong with him to like the joint survivor system

there is also nothing wrong if i want to maximize bequest for my kids.

it is aas way for posting
 

w1rbelw1nd

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Thanks for doing the research! :)

No disagreement from me here. I have done that & you are welcome to do the same!

There are currently only three products on the market that have similar structure to CPF Life:
- Income Guarantee Life Annuity
- AXA RetireHappy Plus*
- Manulife RetireReady

I got quotations on the above three products using the same parameters as CPF Life, ie
- Single premium payable at 55
- Payout starting at 65 and to continue for life

None of the three have a guaranteed income anywhere near CPF Life Standard levels, typically 50-60% of the lower bound of the payout according to CPF Life calculator on the webpage. Even if you add in the 'non-guaranteed' portion, it is still usually a good 10-20% lower, and we know how often insurance companies have hit their 'targets' and distributed this 'non-guarateed' 'bonus'.

* Disclaimer: When I looked into this, the BI I got was for the old AXA RetireHappy product, which was already inferior to CPF Life. From all accounts the Plus product has a lower payout so I never bothered to get updated on it.

But please, don't take my word for it. Please call up any insurance agent you know and ask him to provide a BI for a lifetime annuity product. No need calculations or analysis or guesses. Just like car insurance, compare the quotes from the companies and CPF & see who will give you more money.

Fwiw, I am more than happy to be proven wrong, btw. Because if there is a way to have more money by going to a private insurer, I'm more than happy for them to have my CPF money.
 

Perisher

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Kindly don't insult each other while making your points here.
Most of you are logical people, agree to disagree. Differing views is the norm.
 

BBCWatcher

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there is no such thing as joint survivor.
Yes, that offering exists, in Singapore. Tokio Marine Singapore offers a joint life option in their TM Retirement PaycheckLife annuity product. There may be other examples among the private annuity providers, but that's one of them.

CPF and CPF LIFE can roughly simulate a joint/survivor annuity via the CPF Enhanced Nomination Scheme. And the bonus interest and tax relief structure is designed to encourage more balanced CPF LIFE annuities between spouses.

I'm recommending the concept when/as it makes sense, not a particular product or particular way of executing the concept.
 

pyrogene

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Because pyrogene uses reinvestment rate = 5% p.a. for the payout money, but he forgot that all us collect CPF Life monthly payout to spend and left $0 to reinvest, so reinvestment rate = 0% p.a.!

HAHAHA, so just because this guy spends the money, the reinvestment rate is 0%? Better still, you can gamble and lose all your money, so your reinvestment rate is -100%? :s8:

Btw, someone who needs to spend all of his/her CPF Life Standard payout will not be able to survive on any of this guy's proposed plans that provide lower monthly payout. Maybe that's why he is so confident of dying before 82.
 
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Yes, that offering exists, in Singapore. Tokio Marine Singapore offers a joint life option in their TM Retirement PaycheckLife annuity product. There may be other examples among the private annuity providers, but that's one of them.

CPF and CPF LIFE can roughly simulate a joint/survivor annuity via the CPF Enhanced Nomination Scheme. And the bonus interest and tax relief structure is designed to encourage more balanced CPF LIFE annuities between spouses.

I'm recommending the concept when/as it makes sense, not a particular product or particular way of executing the concept.

May I draw your attention (and pick your brains) to your suggestion in bold. I have been trying to figure out how to work this situation out (ok, if there is a hack, what the heck :s13:) Thanks.

I am 60 (cohort 1957, on MS scheme) and my wife is 58 (CPF Life Basic) and both with ERS, signed up ENS nominating ourselves if one passes before the other. How do you think I should handle this, in the best possible way?
 

MikeDirnt78

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It is clear as blue sky that annuity is the worst kind of insurance you can get now because of the poor payout you get (and hence poor return), even for CPF Life plans!

For any kind of insurance, we will always assess the costs vs reward to us.
Actuaries actually did that, but for the benefits of insurance issuers (not you and me)!
So, before buying insurance, we better assess the costs vs reward ourself!

For medical insurance, e.g. we pay $300 per year, but hay, you can claim up to $1 Million!
For term life insurance, e.g. we pay $500 per year, but hay, you can get protection and claim up to $1 Million!

Now, we can see that for all the above, we pay very low costs (very little money) and can write-off them but we can get huge reward (lots of money) in return!

Your concept on insurance is definitely flawed.

1M is a huge reward but not everyone will be able to claim this amount.

Remember if policyholders win, insurer has to absorb the loss. Vice versa. If term and medical insurance benefits are skewed towards insured, the insurers can close shop.

You should consider the expected payouts instead.

Otherwise, everyone should bet on Toto. Pay $1 and win up to millions of dollars.
 

BBCWatcher

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I am 60 (cohort 1957, on MS scheme) and my wife is 58 (CPF Life Basic) and both with ERS, signed up ENS nominating ourselves if one passes before the other. How do you think I should handle this, in the best possible way?
An interesting challenge!

First of all, congratulations to you both on hitting the ERS.

Before I attempt a guess, it'd be helpful to understand your overall situation a little better. Do you anticipate particularly needing the income from CPF sooner rather than later? Or are you in no particular rush, and you could imagine starting payouts when you each turn 70 (and then only because CPF doesn't let you defer any longer)? Is there any particular need to help children, grandchildren, or other family members if you can afford it? Do you anticipate retiring in Singapore, overseas, or a combination (for example overseas when the weather is good there, Singapore when it's not)? If overseas, which currency zone?

By the way, your wife doesn't have to decide her CPF LIFE payout plan until much later.

It's good that you've made nominations. Something to be aware of is that the Enhanced Nomination Scheme will probably end up paid as cash when the first of you passes, given your high CPF balances. That's not a problem, just an observation.
 

elnewbie

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Are u sure you can be on MS and ERS at the same time ? My understanding is ERS is only for CPF Life.

May I draw your attention (and pick your brains) to your suggestion in bold. I have been trying to figure out how to work this situation out (ok, if there is a hack, what the heck :s13:) Thanks.

I am 60 (cohort 1957, on MS scheme) and my wife is 58 (CPF Life Basic) and both with ERS, signed up ENS nominating ourselves if one passes before the other. How do you think I should handle this, in the best possible way?
 
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