Would like your input on retirement planning
Parents downgraded from Condo to HDB, so we have about 350k in cash, 600k OA. Dad has reached FRS, and mum hit BRS. Dad may work for 1-2 more years.
I have read through and understood that while CPF is not a bequest vehicle, we can tap on its strengths as an annuity which guarantees monthly payouts for life. I am advising them to transfer dad’s OA to fund their RA to ERS.
That's a nice idea, but there's a limitation to be aware of. Specifically, if you're transferring CPF funds to your
own Retirement Account, the funds are drawn first from your Special Account. Since your father is still working presumably he has some savings in his Special Account.
However, your father can transfer some of his CPF savings to your mother (his wife), and that transfer will draw directly from his Ordinary Account first. That transfer can be up to the current Enhanced Retirement Sum ($271,500 in 2020) if they wish, so your mother's Retirement Account can be much bigger if desired. Likewise, your mother can transfer Ordinary Account savings she may have to her husband (your father), up to the same limit (ERS).
The ERS for a Retirement Account is measured based only on principal, not on interest. Every time the ERS is raised it's possible to make another transfer (or add a cash top up) if desired. But the important part is that they should cross-transfer if they have SA dollars on hand, if possible, since that'll draw from OA first, not from higher interest earning SA. Yes, this is a little weird, but that's how the rules work.
It's still quite prudent for them to maintain a
reasonable pool of liquid funds for emergencies, in CPF SA+OA and/or elsewhere, but yes, they should be able to shift some funds into their RAs, starting with your mother's (since hers is much lower), to boost retirement income.
I am worried that my dad may have loss of independence.
As such, do you think that a retirement plan from private insurers(Manuife RetireReady Plus II, NTUC Income Gro Retire Ease, Aviva MyRetirement Choice) that provides additional payouts upon loss of independence, on top of CPF Life would be useful as opposed to VC?
That wouldn't be my first choice. CareShield Life will presumably be available to your father (and mother) from mid-2021, and that's probably most directly responsive to this concern. They could also take a look at Tokio Marine's TM Protect 1 if they're looking for something focused on this particular class of risks that has a less demanding definition of disability, but "take a look at" doesn't necessarily mean "buy."
For BBCW and anybody else to advise, we need your parents' ages since CPF is a age-based scheme, all the FRS/ERS/BHS are tied to their age cohorts. And the rules on top-ups and transfers are all tied to age.
Well, yes, but in this case we probably have enough information so far since both of these parents evidently have Retirement Accounts (i.e. they're age 55+).
I was doing some research recently on insurance for foreign spouses and came upon post #32 where you mentioned that some of the choices for foreign spouses were those offered by NTUC Income (e.g. Enhanced IncomeShield Basic and Enhanced IncomeShield C). Could I check that today, these recommendations still stand?
No, unfortunately not. Enhanced IncomeShield C is no longer available to any new applicants. Moreover, it appears that none of the Integrated Shield plans designed to cover public hospital B1 ward are available to foreigners (non-Singaporean citizens/non-PRs) for new signups. (An ex-citizen or ex-PR who wants to keep an Integrated Shield plan can do so by paying a higher premium.)
However, some of the public hospital A ward Integrated Shield plans are available to foreigners. Prudential's is, for example.