Any1 explore into optimizing cpf various account at different stage of life?

havetheveryfun

havetheveryfun

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jasonlim1988 said:
Dork32 in ur view which of the 3 cpf life plan is optimal? And why?
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got 3 plans meh? thought only basic and standard?

he prefers basic.. but if he had a choice he will prefer the previous old min sum scheme before it was changed to CPF LIFE
 
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JuniorLion

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dork32 said:
cpf sum is reflects how old you are.

my three accounts add up to more than 450k. but i am much older than dw. ocs is close to my age. his cpf account will be close to mine
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Nice man, so how old are you to be able to accumulate $450k in CPF?
 
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dork32

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jasonlim1988 said:
Dork32 in ur view which of the 3 cpf life plan is optimal? And why?
Click to expand...

my view is worth nothing. i chose a plan that is suitable for myself. you choose one that suits you. i would rather list out the advantages and disadvantages and let you decide for yourself.

basic
advantage: the whole ra continues to earn interest for yourself. because of that, it takes a long time before your ra is depleted. your kid will get what is left in the ra should you die.
disadvantage: the payout $100 lower than the standard payout. you have to adjust your lifestyle down by 100 per month. if you die after the ra is exhausted, you will be getting much less in total than standard.
when to choose this: if you decide to die at 87 years old or younger. if you feel that money for your kids is just as good as money to yourself.

standard:
advantage: 100 per month more than standard. if you live long enuf, you will get more than basic
disadvantage: your ra is 0 when you are in standard. so you are not earning interest at all. FRS at 55 would mean 250k at 65. 250k at 4% is 10k per year. you are losing all this interest to the lifelong income fund. as a result your bequest will drop to 0 very quickly.
when to choose this: If you decide to die between 87 to 93. if you have no one to bequest your money to, or you do not want to pass your money onto hopeless unfillial kids.

escalating.
advantage: 2% increase in payout every year. when we just retire, it is common that we still have savings, our dependence on cpf payout is less. we can afford a lower payout. the payout increases over the years. it offsets the depletion of our savings. the 2% increase also helps to fight inflation.
disadvantage: like standard, your ra is 0 and you do not earn interest on your principal. also there is a reduction of initial payout. you have to wait for 12 years before the monthly payout can match that of standard. it is close to 30 years before the total amount can overtake that of standard at 4% rate of return.
when to choose this: if you decide to die after 93. if you feel that you need more money at an older age.

i will choose basic:
-it is a fairer scheme that i take care of myself and not others. i dont have to depend on others to take care of me
-the monthly payout is only 100 less standard. if you die at 80, you kids are going to get 140k less if you choose standard. i am willing to sacrifice this 100 a month for the potential loss of 140k. and 80 seems like a good age to die for me.
-i will not choose escalating because i feel that if i have money when i am a bit younger, i may still be able to enjoy it. i believe i could still be driving or going for holidays at 65. but at 95, i may not have the energy left to spend the money.
-I am quite ok financially. i do not foresee myself depending on the cpf to survive. I do not mind giving what i cannot finish spending to my kids. i believe my savings + srs can last me to close to 95 years old.
 
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dork32

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you are free to add on the advantages and disadvantages that i have listed.
 
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ocs_woodlands

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Every end of year, look forward to the cpf interest rolling in :)

I also do countdown towards 55yo.... 3000+ days left :D
 
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maple96

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dork32 said:
my view is worth nothing. i chose a plan that is suitable for myself. you choose one that suits you. i would rather list out the advantages and disadvantages and let you decide for yourself.

basic
advantage: the whole ra continues to earn interest for yourself. because of that, it takes a long time before your ra is depleted. your kid will get what is left in the ra should you die.
disadvantage: the payout $100 lower than the standard payout. you have to adjust your lifestyle down by 100 per month. if you die after the ra is exhausted, you will be getting much less in total than standard.
when to choose this: if you decide to die at 87 years old or younger. if you feel that money for your kids is just as good as money to yourself.

standard:
advantage: 100 per month more than standard. if you live long enuf, you will get more than basic
disadvantage: your ra is 0 when you are in standard. so you are not earning interest at all. FRS at 55 would mean 250k at 65. 250k at 4% is 10k per year. you are losing all this interest to the lifelong income fund. as a result your bequest will drop to 0 very quickly.
when to choose this: If you decide to die between 87 to 93. if you have no one to bequest your money to, or you do not want to pass your money onto hopeless unfillial kids.

escalating.
advantage: 2% increase in payout every year. when we just retire, it is common that we still have savings, our dependence on cpf payout is less. we can afford a lower payout. the payout increases over the years. it offsets the depletion of our savings. the 2% increase also helps to fight inflation.
disadvantage: like standard, your ra is 0 and you do not earn interest on your principal. also there is a reduction of initial payout. you have to wait for 12 years before the monthly payout can match that of standard. it is close to 30 years before the total amount can overtake that of standard at 4% rate of return.
when to choose this: if you decide to die after 93. if you feel that you need more money at an older age.

i will choose basic:
-it is a fairer scheme that i take care of myself and not others. i dont have to depend on others to take care of me
-the monthly payout is only 100 less standard. if you die at 80, you kids are going to get 140k less if you choose standard. i am willing to sacrifice this 100 a month for the potential loss of 140k. and 80 seems like a good age to die for me.
-i will not choose escalating because i feel that if i have money when i am a bit younger, i may still be able to enjoy it. i believe i could still be driving or going for holidays at 65. but at 95, i may not have the energy left to spend the money.
-I am quite ok financially. i do not foresee myself depending on the cpf to survive. I do not mind giving what i cannot finish spending to my kids. i believe my savings + srs can last me to close to 95 years old.
Click to expand...

Another major difference between Basic vs Std/Escalating:

U earn extra 2% interest in RA with Basic, but with Std/Escalating the extra 2% goes to the CPF Life Pool. Extra 2% = $900 every year that u have combined CPF/CPF Life balances of at least 60k!
 
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jasonlim1988

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dork32 said:
my view is worth nothing. i chose a plan that is suitable for myself. you choose one that suits you. i would rather list out the advantages and disadvantages and let you decide for yourself.

basic
advantage: the whole ra continues to earn interest for yourself. because of that, it takes a long time before your ra is depleted. your kid will get what is left in the ra should you die.
disadvantage: the payout $100 lower than the standard payout. you have to adjust your lifestyle down by 100 per month. if you die after the ra is exhausted, you will be getting much less in total than standard.
when to choose this: if you decide to die at 87 years old or younger. if you feel that money for your kids is just as good as money to yourself.

standard:
advantage: 100 per month more than standard. if you live long enuf, you will get more than basic
disadvantage: your ra is 0 when you are in standard. so you are not earning interest at all. FRS at 55 would mean 250k at 65. 250k at 4% is 10k per year. you are losing all this interest to the lifelong income fund. as a result your bequest will drop to 0 very quickly.
when to choose this: If you decide to die between 87 to 93. if you have no one to bequest your money to, or you do not want to pass your money onto hopeless unfillial kids.

escalating.
advantage: 2% increase in payout every year. when we just retire, it is common that we still have savings, our dependence on cpf payout is less. we can afford a lower payout. the payout increases over the years. it offsets the depletion of our savings. the 2% increase also helps to fight inflation.
disadvantage: like standard, your ra is 0 and you do not earn interest on your principal. also there is a reduction of initial payout. you have to wait for 12 years before the monthly payout can match that of standard. it is close to 30 years before the total amount can overtake that of standard at 4% rate of return.
when to choose this: if you decide to die after 93. if you feel that you need more money at an older age.

i will choose basic:
-it is a fairer scheme that i take care of myself and not others. i dont have to depend on others to take care of me
-the monthly payout is only 100 less standard. if you die at 80, you kids are going to get 140k less if you choose standard. i am willing to sacrifice this 100 a month for the potential loss of 140k. and 80 seems like a good age to die for me.
-i will not choose escalating because i feel that if i have money when i am a bit younger, i may still be able to enjoy it. i believe i could still be driving or going for holidays at 65. but at 95, i may not have the energy left to spend the money.
-I am quite ok financially. i do not foresee myself depending on the cpf to survive. I do not mind giving what i cannot finish spending to my kids. i believe my savings + srs can last me to close to 95 years old.
Click to expand...

U understand and write well . Thanks for the valuable input.
 
windwaver

windwaver

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Excellent post, bump for awareness.

The best for singles or couples without kids is still standard which I feel can be slightly tweaked since the other plans are mainly for family planning.
 
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