HWZ Forums

Login Register FAQ Mark Forums Read

Combining private annuity and CPF Life - does it make sense?

Like Tree1Likes
Reply
 
LinkBack Thread Tools
Old 29-09-2017, 06:55 PM   #31
Member
 
Join Date: Jun 2011
Posts: 143
i was shown a Universal Plan that starts monthly payout at 60
Single Premium $250k
Initial Outlay $70k
Loan $180k
Monthly interest payable to bank $248
it used to be a popular solution, when life plans were paid for life. Now with so many limited pay options, I guess Universal life is redundant., for most people.

But they still cater to a group of wealthy clients, who are looking to insure more than a million and also have enough cash to do a single premium or a loan like above. Looks like your coverage could be around d 1 mill-2 mill.
computers70 is offline   Reply With Quote
Old 12-10-2017, 11:04 PM   #32
Master Member
 
Join Date: Feb 2011
Posts: 3,405
An update.

After considering pte annuities for 1 month, I have decided NOT to buy pte annuities.

I have found the payouts are poor compared to cpf life.

This is a sample of what I found.

Using mnaulife as eg.

Manulife
Put in 46k @ 44 yo and start payout @ 65 till 90 - monthly payout $300

Cpflife
Put in 161k @ 55yo and start payout @ 65 onwards - monthly payout of $1270 (avg of basic and std).

161k/46k = 3.5
$1270/3.5 = $360.

$360/$360 = 1.2 ie Manulife is paying 20% lower monthly payouts compared to Cpflife AND it has a head start of 10 years (from 44 - 65) before payout starts compared to Cpflife (from 55 - 65)... so it seems like pte annuities compare poorly to Cpflife.

The issue for me is more like what instrument to use to bridge the gap between 60 to 65 ie between my desired retirement age and Cpflife payout age....

Sent from Common Sense using GAGT

Last edited by ocs_woodlands; 12-10-2017 at 11:06 PM..
ocs_woodlands is online now   Reply With Quote
Old 12-10-2017, 11:27 PM   #33
Member
 
Join Date: May 2017
Posts: 114
An update.

After considering pte annuities for 1 month, I have decided NOT to buy pte annuities.

I have found the payouts are poor compared to cpf life.

This is a sample of what I found.

Using mnaulife as eg.

Manulife
Put in 46k @ 44 yo and start payout @ 65 till 90 - monthly payout $300

Cpflife
Put in 161k @ 55yo and start payout @ 65 onwards - monthly payout of $1270 (avg of basic and std).

161k/46k = 3.5
$1270/3.5 = $360.

$360/$360 = 1.2 ie Manulife is paying 20% lower monthly payouts compared to Cpflife AND it has a head start of 10 years (from 44 - 65) before payout starts compared to Cpflife (from 55 - 65)... so it seems like pte annuities compare poorly to Cpflife.

The issue for me is more like what instrument to use to bridge the gap between 60 to 65 ie between my desired retirement age and Cpflife payout age....

Sent from Common Sense using GAGT
Did not read entire thread but have you looked at TM Retirement GIO sold by banks like BOC? I did buy a bunch of this (and for my wife too to capitalise on SDIC protection; 50k per name per insurer).. to bridge between 55 and 65. The vague data I remembered: I'm 45, pay for 5 years (20% each time), 5 year accumulation , at 55 start paying annual interest at around 4.75% (out of which 1/3 (1.8%) is guaranteed but they have a history of paying full 4.75%) and this is pure yield (not yield + drawdown as in many retirement plans).... at 55 your surrender/death benefits are also guaranteed (i.e. more than premiums paid from now on)... pay for Life ( I think)...

pls verify with any TM agents or BOC....

from 60 to 65, I have seen a few retirement models by professional FA using immediate annuities or cash to draw down to meet monthly cash requirement... not sure if this is the wisest plan as I normally aim to preserve capital as much as possible (don't know why myself)... so I use above annuity instead + other non-annuities methods I already implemented to supplement (trade/invest, properties rental , interest from FDs) ... still exploring other ways..

Last edited by raysdad; 13-10-2017 at 12:54 AM..
raysdad is offline   Reply With Quote
Old 13-10-2017, 12:01 AM   #34
Supremacy Member
 
Join Date: Mar 2004
Posts: 8,414
Without comparison, I dare say no private annuity is better than CPF Life except that you can liquidate private annuity (with loss) anytime you like.
henrylbh is offline   Reply With Quote
Old 13-10-2017, 02:38 AM   #35
Senior Member
 
Join Date: Jun 2010
Posts: 1,976
Without comparison, I dare say no private annuity is better than CPF Life except that you can liquidate private annuity (with loss) anytime you like.
You could get at least pretty close if you’re wiling to consider lifetime annuities sold outside Singapore, but you’d still not be able to replicate CPF LIFE’s sterling creditworthiness (a AAA rated sovereign), Singapore dollar denominated payout, and Singapore tax advantages. You will be able to do better in terms of joint/survivor payouts and true inflation indexed payouts, although the latter will be keyed to another country’s price index.

But that’s not really how you should approach this analysis. Yes, start with CPF LIFE as your longevity insurance foundation. Then decide whether you need additional longevity insurance. CPF LIFE’s maximum monthly payout is rather modest, and you might need more, even after you include your spouse’s/partner’s maximum CPF LIFE coverage in the picture. If you do need more, go shopping for additional coverage and get the best value coverage (which is not the same thing as lowest priced, since creditworthiness is important). OK, maybe that additional coverage isn’t as terrific a value as CPF LIFE, but so what? You need more, so do the best you can.
BBCWatcher is offline   Reply With Quote
Old 13-10-2017, 10:05 AM   #36
Senior Member
 
Join Date: Nov 2014
Posts: 849
Which annuity got the highest guaranteed component and pays for whole life?

I know ntuc vivocash has the highest reinvestment rate currently
blurpandasg2014 is offline   Reply With Quote
Old 13-10-2017, 10:31 AM   #37
Senior Member
 
Join Date: Jun 2010
Posts: 1,976
Which annuity got the highest guaranteed component and pays for whole life?
That's very hard to answer without at least a few parameters. Which lifetime annuity in Singapore, or globally? What's the minimum Moody's or S&P insurer rating you are willing to accept? And what currency(ies) are acceptable?
BBCWatcher is offline   Reply With Quote
Old 13-10-2017, 05:31 PM   #38
Junior Member
 
Join Date: Feb 2017
Posts: 16
Which annuity got the highest guaranteed component and pays for whole life?

I know ntuc vivocash has the highest reinvestment rate currently
If you're talking about Guaranteed portion, that would be Manulife
rsiow2 is offline   Reply With Quote
Reply
Important Forum Advisory Note
This forum is moderated by volunteer moderators who will react only to members' feedback on posts. Moderators are not employees or representatives of HWZ. Forum members and moderators are responsible for their own posts.

Please refer to our Terms of Service for more information.


Thread Tools

Posting Rules

Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are On

HardwareZone
Rewards