Should you delay your CPF Life payout

[dork32]

i am not trying to ensure a bequest for my kids.

i rather give what i cannot finish spending to my kids than other unknown strangers.

 

[dork32]

CPF LIFE, and particularly the Escalating Plan with an age 70 deferral, is very well designed to defend a bequest (and, much better yet, lifetime gifts!) from other assets, such as your owner-occupied primary residence which you’re much less likely to have to sell or reverse mortgage if you have a steady real lifestyle for life that CPF LIFE is protecting. But CPF LIFE itself is a lousy bequest vehicle.

again a very one sided view. if you live till 100, yes, what you proposed is correct.

but if you die at 80, you kids will be getting 150k less if you are on frs. i would rather bequest this 150k to my kids than to lifelong income fund.

your posting should include this statement. let the people decide which is better for them.

i do not care about protection, i do not care much about my bequest. i just dont like the idea that others have a chance on my money.

 

[dork32]

So the idea is by Term till 65 and invest the rest...

Now when it comes to CPF, everyone suddenly have amnesia and said that they suddenly wanted to bequest a large amount of money...

to me there is no contradiction.

cpf life is very different from term.
for term, you put in a bit of money. if things does not go your way, you get a lot of money, otherwise you lose the little bit.
for cpf life, you put in a lot of money. there is a chance that you lose a lot of money.

cpf life is more like invest the rest. you put in a lot of money and it give 4% return. why it cannot be an investment tool? it is just that there is high chance that only your kid get to spend it.

 

[dork32]

If you want to use CPF to deliver a bequest, then use MediSave to do that, not CPF LIFE. Keep your MediSave Account full, and don’t withdraw from it. That’s the one part of CPF that comes closest to guaranteeing a bequest.

first is medisave is only 50+k.
second is your health goes down as you aged. there is a high chance that medisave is used for your medical bills.

 

[dork32]

after analysing for so long. i have also made up my mind to switch ers with basic.

the reason is not for protection. more for investment.

ers will allow more of my money to earn the 4% compared to leaving it in oa. Every time i get my monthly payout, i will vc it back to the cpf. this is better putting it in oa and choosing brs.

 

[dork32]

for those that believe that cpf is out there to eat your money, this is fake.

when my dad died, we got almost everything he had in the cpf. public trustee got a bit.

 

[iMac]

CPF Life pay you till you die...Even if you live till 200 years, they are still obligated to pay you monthly till you die...So it doesn't even make sense to delay and earn any interest as they will still pay you till you die....

LOL....why 200 years? You should say 2000 years to make it sound more attractive.

But in reality...report say most of us will expired by 85 years.

Those rich with lots of monies/condo/passive income will say delay payout is good, those poor and sick without job will carry on collecting cardboard/sell tissue till 70 years old.

 

[makav31i]

for those that believe that cpf is out there to eat your money, this is fake.

when my dad died, we got almost everything he had in the cpf. public trustee got a bit.

I don't think anyone or most people here believe that CPF is out there to eat your money...People who want to start drawing at 65 because of fear that CPF is not giving back their money is just stupid...It is just simply because the life expectancy is going up and CPF Life is going to pay you till you die...

So it makes no difference if you start payout early or later as if you have a long life, whatever you put into CPF + all the compounded interest would still be lesser than whatever you are drawing from CPF Life till you die...The difference is that those who start early deplete whatever amount they contributed to CPF faster and taxpayers would be footing the bill to cover you till the day that you die...

 

[havetheveryfun]

If bequest amount is so important, why not buy Term till 99 or Whole Life policy?

Is the purpose of CPF for your retirement or for bequest?

Even if I am still working or have a billion in savings it still make sense to start drawing at 65 as if you have a long life, taxpayers will help to finance my retirement...If I die early, my Whole Life policy and Term till 99 would be even greater than what you can get from CPF Bequest by delaying till 70...

you are forgetting not the whole population is that financial savvy, especially the elderly now who are reaching their retirement age. they definitely won't buy something to purposely leave a bequest to their children. but CPF is different, since it is something they are already forced to have. So if they feel they have enough savings to last and do not need to touch the monies in CPF, then might as well right ?

 

[makav31i]

LOL....why 200 years? You should say 2000 years to make it sound more attractive.

But in reality...report say most of us will expired by 85 years.

Those rich with lots of monies/condo/passive income will say delay payout is good, those poor and sick without job will carry on collecting cardboard/sell tissue till 70 years old.

If you know that you will die at 85, might as well buy Term insurance till 99 years to give a sum of money to your children right? Why do people recommend buying term till 65 when you might as well continue for another 20 years to get a guaranteed payout since you are dying before 99 anyway...

Even if I have a billion dollar upon retirement, I would still withdraw at 65 or at the earliest possible date not because I need the money, but to maximize the returns from whatever I contributed to my CPF as if my CPF deplete faster than whatever I contributed, taxpayers would be footing my CPF Life payout till I die...

 

[makav31i]

you are forgetting not the whole population is that financial savvy, especially the elderly now who are reaching their retirement age. they definitely won't buy something to purposely leave a bequest to their children. but CPF is different, since it is something they are already forced to have. So if they feel they have enough savings to last and do not need to touch the monies in CPF, then might as well right ?

If you are not financially savvy in the first place, you might not even have enough for your retirement in the first place...So you might need to start drawing at 65 and drawing at 70 makes zero sense to someone who is not financially savvy like you say...How would someone who is not financially savvy for their whole entire life suddenly got an epiphany at retirement to delay their CPF Life payout till 70?

 

[cal3135]

Bro can u elaborate, “public trustee got a bit”??

for those that believe that cpf is out there to eat your money, this is fake.

when my dad died, we got almost everything he had in the cpf. public trustee got a bit.

Posted with xsmax HardwareZone Forums app

 

[makav31i]

Bro can u elaborate, “public trustee got a bit”??

Posted with xsmax HardwareZone Forums app

Public Trustee charges fees for holding on to the money till the dependant turn 21...That's what happened for me and my siblings...

 

[tangent314]

But in reality...report say most of us will expired by 85 years.

This is not correct. The latest stats gives life expectancy at 20.9 for those aged 65. Life expectancy is given as a mean, not a median, and the median tends to be about 3 years higher than the mean. So 50% of people aged 65 today will live until at least 89 years. Life expectancy has also been increasing steadily by about 0.1 per year, so by then time we reach 65 it would have gone up around a couple of years depending on your age today.

Most people tend to underestimate their own lifespans, it's a fairly well known phenomena. Unfortunately it means a lot of people don't appreciate the features of the CPF Life that are designed to make their money last longer.

https://www.population-europe.eu/pop-digest/underestimating-lifespans

 

[dork32]

Bro can u elaborate, “public trustee got a bit”??

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because my dad did not nominate, money go to public trustee.

public trustee distribute money to us and charge a fee.

 

[dork32]

So it makes no difference if you start payout early or later as if you have a long life, whatever you put into CPF + all the compounded interest would still be lesser than whatever you are drawing from CPF Life till you die...The difference is that those who start early deplete whatever amount they contributed to CPF faster and taxpayers would be footing the bill to cover you till the day that you die...

you are very right. i wanted also want garmen to feed me.

but please also consider the other school of thought. more money in ra, means more money is earning interest at 4%. you should not deplete it quickly so as to continue to earn the 4%

 

[BBCWatcher]

I agree with what Tangent314 wrote. Moreover, if medical innovations even slightly surpass expectations -- quite possible now that medical science is on the cusp of individualized genomic medicine (for example) -- lifespans will be even longer than what Tangent314 described.

The longest confirmed human lifespan to date was Jeanne Calment's. She died at age 122 years and 164 days. If there's a maximum human lifespan it's at least that long, because somebody has already lived that long. My family tree happens to be chock full of male and female centenarians running back at least a couple generations, so "100 is the new 80" wouldn't be at all surprising. It's already mostly happened, really.

These longer lives are also healthier lives -- that trend is positive, too. It's really fantastic news all around, but your retirement planning needs to take these realities and trends into proper account.

 

[makav31i]

you are very right. i wanted also want garmen to feed me.

but please also consider the other school of thought. more money in ra, means more money is earning interest at 4%. you should not deplete it quickly so as to continue to earn the 4%

If the money does not deplete and continue to earn 4%, what are you trying to accomplish? For bequest? Even if it deplete to zero, it doesn't mean that your monthly payout suddenly become zero...

If you say that CPF Life would pay only what you contributed and nothing more, of course try to delay it to earn the extra interest...

But this is not the case with CPF Life which pay till you die...

 

[havetheveryfun]

If you are not financially savvy in the first place, you might not even have enough for your retirement in the first place...So you might need to start drawing at 65 and drawing at 70 makes zero sense to someone who is not financially savvy like you say...How would someone who is not financially savvy for their whole entire life suddenly got an epiphany at retirement to delay their CPF Life payout till 70?

because most parents always want the best for the kids, even if they would have to suffer themselves. to them, it is just 5 more years of working if they are still working, but a bigger benefit they can leave behind to their children.

 

[OngHuatHuat]

I think by the time most people here reach 70 years old, their children already close to 40 years old. Not sure if you still think the same.

because most parents always want the best for the kids, even if they would have to suffer themselves. to them, it is just 5 more years of working if they are still working, but a bigger benefit they can leave behind to their children.