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Old 06-04-2019, 07:02 PM   #1136
BBCWatcher
Arch-Supremacy Member
 
Join Date: Jun 2010
Posts: 10,512
Dad is an engineer who draws 7k/month and had his 55th Birthday last year. Did not read about CPF shielding then. Now he has:
-175k in RA(Has option for property pledge)
An option he shouldn’t take if he’s even considering doing what’s described below.

-75k in OA
-42k in SA

Mum is a homemaker aged 54. 55th Birthday this year October. She has:
-51k in SA(Due to regular 7k top up)
-4k in OA
-housing amount withdrawn 47k
It’d be wonderful if she could repay that OA amount ($47K) then transfer all OA into SA.

CPF has informed her that she is not eligible for property pledge
With her current balances, that’s correct.

Currently have some spare cash on hand, about 100-120k
Dad is drawing 7k/month
Rental giving 2k/month

Mum wants dad to retire and is looking at drawing 180k(90k from savings, 90k from his CPF) and putting it as a single premium into a NTUC ILP policy which yields about $100/month for every 30k - they will be looking at $600/month. The sum can also act as a bequest as upon death as it would be returned at 105% of premium paid.
No way — bad idea. They should drive their CPF LIFE annuities up to their maximums (Enhanced Retirement Sum) first, before even thinking about insurance company products (and probably not even then). Nobody beats CPF LIFE in this corner of the life income business.

Also, what’s the deal with bequests? They have a rental income property and a home, right — or at least one of those two things? That’s already a lovely bequest. Income security is their current problem if they have a problem, not bequests.

With CPF LIFE doubled up, all they’ve got to do then is to bridge to age 65. And that’s at least easy to calculate.

Expenses:
10% for church offering
600/month on groceries
300/month Utilities and telco(TV, Mobile, Broadband)
300/month transport
400/month Condo maintenance fee
That’s all less than the $2,000 of current rental income, so there’s the bridge to age 65.

Not to put too fine a point on it, but ILPs blow monkey chunks.

Last edited by BBCWatcher; 06-04-2019 at 07:05 PM..
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