CPF Retirement Sum Scheme

[maple96]

if you are only child this game is fine. if your siblings want to grab a share after the old man kaput then gg

uncle henry not the only child but his strategy worked.

his uncle can play it himself if he has the money

 

[maple96]

stil trying to understand, why is old RSS better?

they are lucky as they can wait till 80 to join CPF Life, enjoy the best of both worlds if he got the min sum at 80 to join and think they might have long life

 

[Mecisteus]

But isnt CPF Life monthly payout much higher than under RSS?

Say a 75yr old guy at BRS level of savings, shd opt in to CPF Life?

Assuming you compare RSS and CPF Life Basic from age 65,

The monthly payouts don't really matter. The interest rates that matter.

If you draw more, your RA will deplete faster. You draw less, your RA will deplete less.

Total payouts + bequests will be higher if you are on CPF Life and you live till 110.

Total payouts + bequests will be higher under RSS if you live till 70 only.

 

[Geeezz]

i believe there’s give and take. if give higher payout fr 20 years, after that a minority will spend everything and hv no money left fr their next few yrs before they pass on. with cpf life u won’t be full but at least u won’t go hungry till pass on

 

[Mecisteus]

i believe there’s give and take. if give higher payout fr 20 years, after that a minority will spend everything and hv no money left fr their next few yrs before they pass on. with cpf life u won’t be full but at least u won’t go hungry till pass on

Yeah some want the payouts to last till 5 years and some want to withdraw everything now.

So how to cater to so many wants?

 

[cscs3]

Yeah some want the payouts to last till 5 years and some want to withdraw everything now.

So how to cater to so many wants?

Yes, there is no one plan for all.
Take this as a supplement.
When you are young, you want everything now. When you get older, you think of how to get stable income.

 

[Geeezz]

Yeah some want the payouts to last till 5 years and some want to withdraw everything now.

So how to cater to so many wants?

it’s nt possible to cater fr every individual. i do understand the govt decision to reduce but make the payout fr life. they rather nt take the risk of ppl overspending during their early retirement days and nt having enough fr the rest of their life. their objective is to feed u till it’s just nice nt to feed u till u full full.

fr those that wn more money they can only invest or save it themselves lor. reading the threads here is a good start

 

[foozgarden]

To me, old RSS is definitely much better than CPF Life!
But as the saying goes, good thing don't last!

You don't need to pay annuity insurance premiums and subsidize other people (unless you are very confidence you can live past 95 years old!)

i used the cpf life calculator on cpf website.
for the fixed amount in RA. start this year @70 yrs old
old RSS -1012 (from cpf letter) xirr - : 4.96%
cpf life std plan - 1085 (cpf life online calculator) xirr : 5.69%

for the same amount , why is cpf life more (slightly)?
they are both very similar in terms of payout.
cpf life breakeven point is 12 mths earlier than old RSS

 

[iMac]

Yes, there is no one plan for all.
Take this as a supplement.
When you are young, you want everything now. When you get older, you think of how to get stable income.

LOL....if really just take CPF as supplement.....they have to change their Mission statement...

"To enable Singaporeans to have a secure retirement, through lifelong income, healthcare financing and home financing."

 

[SBC]

LOL....if really just take CPF as supplement.....they have to change their Mission statement...

"To enable Singaporeans to have a secure retirement, through lifelong income, healthcare financing and home financing."

Indeed. Many still think that with CPF alone, they could retire happily and comfortably.

I would deem below as supplement:
- SRS, sizeable enough to be meaningful. At least 50k
- insurance
- cpf RA in excess of FRS
- stock in cash holding eg SSB, good stock.

 

[tangent314]

i used the cpf life calculator on cpf website.
for the fixed amount in RA. start this year @70 yrs old
old RSS -1012 (from cpf letter) xirr - : 4.96%
cpf life std plan - 1085 (cpf life online calculator) xirr : 5.69%

5.69%? Doesn't seem possible. What death age are you looking at for this?

 

[SKenny]

stil trying to understand, why is old RSS better?

If I have a choice, my personal preference is the old RSS too.

 

[foozgarden]

If I have a choice, my personal preference is the old RSS too.

not sure if i follow this train of thought.
again is it becoz of the pooled resources?

 

[foozgarden]

5.69%? Doesn't seem possible. What death age are you looking at for this?

both start and end is the same for both old RSS and cpf life
26 years payout from age 70 (as per cpf letter)
with same RA balance

or, did i get my calculations wrong?

 

[SKenny]

not sure if i follow this train of thought.
again is it becoz of the pooled resources?

I dislike most about CPFLife is the complete "flexibility" that they have to adjust the payout as and when they see fit.

Also personally I don't need the longevity insurance and I would not like to pay for something that I don't need.

What I like the most, is the 4% interest rate and the higher limit (ERS) that can enjoy this 4%.

The old RSS fits my needs better.

 

[Mecisteus]

both start and end is the same for both old RSS and cpf life
26 years payout from age 70 (as per cpf letter)
with same RA balance

or, did i get my calculations wrong?

Of course the Standard plan gives higher returns.

You are living quite long.

Take Basic for an example. You are drawing the payouts from RA, lower amount and return is at least 4%. You will deplete RA and Premiums at age 93.

If you live till 96 under Standard Plan, of course the return is much higher.

 

[Mecisteus]

I dislike most about CPFLife is the complete "flexibility" that they have to adjust the payout as and when they see fit.

Also personally I don't need the longevity insurance and I would not like to pay for something that I don't need.

What I like the most, is the 4% interest rate and the higher limit (ERS) that can enjoy this 4%.

The old RSS fits my needs better.

Good things always come to an end 1 day for people like you who knows how to manage their finances.

 

[BBCWatcher]

Also personally I don't need the longevity insurance and I would not like to pay for something that I don't need.

Ah, but you would pay if CPF LIFE didn't exist. There'd be more elderly Singaporeans living in deeper poverty, and you would be involved in supporting them through government transfer payments, funded from general tax revenues -- your higher taxes.

I don't have much sympathy for the argument that a BRS-level CPF LIFE annuity would "crimp your style." What would actually crimp your style -- and result in a lot more Singaporean misery -- is lots more elderly Singaporeans in deeper poverty. Universal or near-universal longevity insurance helps prevent that, and that's all to the good.

 

[SKenny]

Ah, but you would pay if CPF LIFE didn't exist. There'd be more elderly Singaporeans living in deeper poverty, and you would be involved in supporting them through government transfer payments, funded from general tax revenues -- your higher taxes.

I don't have much sympathy for the argument that a BRS-level CPF LIFE annuity would "crimp your style." What would actually crimp your style-- and result in a lot more Singaporean misery -- is lots more elderly Singaporeans in deeper poverty. Universal or near-universal longevity insurance helps prevent that, and that's all to the good.

I have no clue where your "a BRS-level CPF LIFE annuity would "crimp your style" came from. Don't just build a random strawman and then proceed to destroy it with gusto.

 

[tangent314]

both start and end is the same for both old RSS and cpf life
26 years payout from age 70 (as per cpf letter)
with same RA balance

or, did i get my calculations wrong?

Did you make sure birth date is exactly 70 years ago from today?
Because otherwise the money you put in will be allowed to accumulate compounding interest until the age of 70 before being paid out.