CPF Retirement Sum Scheme

[foozgarden]

the way that you have been posting shows that you are very lost.

your cpf life is probably standard.

on the surface, you would be an idiot if you choose rss. 1012 for 26 years vs 1085 for life.

you have to compare the bequest value vs the monthly payout to make a fair comparison.

and do not give me the bbc crab that you are an imoortal

yes i am lost.
hence thats why i am here asking for enlightenment.

the part i dont understand is why the standard is higher than rss monthly payout, if standard last for eternity. while rss last for a fixed 26 yrs only.
i thgt the arguement here is that rss will be more, coz it lasts "shorter" years of payout?

I have yet to reach my PEA at 65 as mentioned a few threads back. Hence, no letter yet from CPF until then.

oh i see. i thgt you already had your RSS payout letter.

 

[Mecisteus]

yes i am lost.
hence thats why i am here asking for enlightenment.

the part i dont understand is why the standard is higher than rss monthly payout, if standard last for eternity.

I thought I have explained to you.

If you are on Standard, defer to 70 and you die before age 86, your returns is 0%.

The returns will go higher and higher as you die later.

Note I have included the bequests.

 

[dork32]

I thought I have explained to you.

If you are on Standard, defer to 70 and you die before age 86, your returns is 0%.

The returns will go higher and higher as you die later.

Note I have included the bequests.

actually the return is not 0%. you would have gotten back the monthly payout. it is the bequest that is 0.

 

[dork32]

yes i am lost.
hence thats why i am here asking for enlightenment.

the part i dont understand is why the standard is higher than rss monthly payout, if standard last for eternity. while rss last for a fixed 26 yrs only.
i thgt the arguement here is that rss will be more, coz it lasts "shorter" years of payout?


oh i see. i thgt you already had your RSS payout letter.

your argument is correct. it makes perfect sense. what is missing is the bequest value.

For Rss
based on your 1012 per month for 26 years on 4%, i assume that you have 196k (probably 190k).
it takes 26 years to finish drawing every cent of it. if it is after
it means that if you die at 80 (15 years(, you still have 107k for your kids.

For CPF life
your 196k does not earn interest. you are drawing at 1085. it will take you 196k/1085 = 180 months (15 years) to finish drawing. if you start to draw at 65 means that if you die at 80, your kids get nothing left.

this is what i meant by bequest value. you choose one that suits you.

 

[dork32]

your argument is correct. it makes perfect sense. what is missing is the bequest value.

For Rss
based on your 1012 per month for 26 years on 4%, i assume that you have 196k (probably 190k).
it takes 26 years to finish drawing every cent of it. if it is after
it means that if you die at 80 (15 years(, you still have 107k for your kids.

For CPF life
your 196k does not earn interest. you are drawing at 1085. it will take you 196k/1085 = 180 months (15 years) to finish drawing. if you start to draw at 65 means that if you die at 80, your kids get nothing left.

this is what i meant by bequest value. you choose one that suits you.

my post is very one sided.

you chose cpf life and lived till you are 100, you are going to win big. better than striking 4D

 

[maple96]

another CPFB facebook post, copied and pasted below:

"You may have seen an online article about a CPF member’s RSS payout lasting 28 years.

The member’s Retirement Account savings provides 20 years of payouts. This has not changed.

One in two members will live beyond 85. To protect members from outliving their savings, since 2009, the Government funds additional years of payouts through extra interest, which is now 2% for the first $30k and 1% for the next $30k. This gave the member 8 extra years of payouts. He can also join CPF LIFE for higher lifelong payouts and lower bequest."

 

[Mecisteus]

actually the return is not 0%. you would have gotten back the monthly payout. it is the bequest that is 0.

dork I said it's 0% before 86.

After 86, then the returns start to increase from 0%.

 

[oceanicmanta]

another CPFB facebook post, copied and pasted below:

"You may have seen an online article about a CPF member’s RSS payout lasting 28 years.

The member’s Retirement Account savings provides 20 years of payouts. This has not changed.

One in two members will live beyond 85. To protect members from outliving their savings, since 2009, the Government funds additional years of payouts through extra interest, which is now 2% for the first $30k and 1% for the next $30k. This gave the member 8 extra years of payouts. He can also join CPF LIFE for higher lifelong payouts and lower bequest."

were the additional interests introduced in 2009 ?

or is CPFB indirectly saying there were changes with the payout duration starting 2009 ?

 

[Battery Operator]

were the additional interests introduced in 2009 ?

or is CPFB indirectly saying there were changes with the payout duration starting 2009 ?

The Government introduced the CPF LIFE annuity scheme in 2009; hence the birth of these 'additional interests' and the changes that came along with it.

Link:
https://www.cpf.gov.sg/Members/AboutUs/about-us-info/history-of-cpf

(under the heading "Life-long retirement income for Singaporeans")

 

[assiak71]

Hi my kin is turning 65 and need to decide RSS or CPF Life soon. Wish to seek advice on which to go for. And resources to read up on for comparison. Thanks.

Any recommendation.
Rss vs cpf life basic
Or it depends, and depending on what?

 

[maple96]

Any recommendation.
Rss vs cpf life basic
Or it depends, and depending on what?

at least 2 persons asked similar questions in this thread and had been discussed. U are not reading or expect more?

I understand CPFB is planning for talks for 65 (now only for 55), dunno know when start.

Stay on RSS, when your kin reach 79.5 then decide whether to join CPF Life with min balance on Basic Plan if your kin thinks can live beyond 95. On RSS your kin will not lose a single cent. On CPF Life Basic, there is premium to be paid and that cost is equivalent to "4% interest compounded", unless your kin can live beyond 95 after joining at 65. Just a quick summary.

 

[tmkedmw]

were the additional interests introduced in 2009 ?

or is CPFB indirectly saying there were changes with the payout duration starting 2009 ?

I remember making an enquiry about few years back and cpf give me the impression that 20 years is THE duration to deplete the RA inclusive of accrued interest.

 

[SBC]

I remember making an enquiry about few years back and cpf give me the impression that 20 years is THE duration to deplete the RA inclusive of accrued interest.

Dun know how many km had the goal pole had been shifted.

 

[henrylbh]

Dun know how many km had the goal pole had been shifted.

He is saying about RSS. You got any base for what you said?

 

[SKenny]

I remember making an enquiry about few years back and cpf give me the impression that 20 years is THE duration to deplete the RA inclusive of accrued interest.

I have the same view.

 

[dyland]

at least 2 persons asked similar questions in this thread and had been discussed. U are not reading or expect more?

I understand CPFB is planning for talks for 65 (now only for 55), dunno know when start.

Stay on RSS, when your kin reach 79.5 then decide whether to join CPF Life with min balance on Basic Plan if your kin thinks can live beyond 95. On RSS your kin will not lose a single cent. On CPF Life Basic, there is premium to be paid and that cost is equivalent to "4% interest compounded", unless your kin can live beyond 95 after joining at 65. Just a quick summary.

Join CPF Life at 79.5? By then you would have depleted most of your retirement sum. Any idea how much you can draw per month if you switch from rss to CPF life at 79.5 if you assume you have say 5000 dollars left in your RA.

 

[tangent314]

Any recommendation.
Rss vs cpf life basic
Or it depends, and depending on what?

It really does depend.
My mum recently made a choice too, based on my recommendation she went for CPF Life Escalating plan. Maybe it's less money for me if she passes early, but I want her to have a fulfilling life all the way to the end if she remains healthy.

 

[tmkedmw]

Join CPF Life at 79.5? By then you would have depleted most of your retirement sum. Any idea how much you can draw per month if you switch from rss to CPF life at 79.5 if you assume you have say 5000 dollars left in your RA.

I haven't research this but currently one can topup RA upto current ERS limit (ie for age >55).

Once reach PEA, I don't know. If can, then whilst RA is being drawn down by the monthly payout, I suppose one can top it up again to whatever ERS limit is at. If this is true, one can topup RA at 79.5 if you have the financial resources to make it a significant sum instead of just $5000.

 

[BBCWatcher]

There doesn’t seem to be any age limit to Retirement Account top ups. The only limit is the current Enhanced Retirement Sum.

The age 80 limit is simply the deadline for choosing CPF LIFE (any CPF LIFE payout plan) if you aren’t already on CPF LIFE. You might not be on CPF LIFE if your RA balance is low (under $60,000) or if you’ve previously opted out because you have a suitable private annuity/pension substitute. And I think the CPF LIFE enrollment deadline is actually slightly earlier for administrative reasons, so don’t cut that one too close.

There’s also no age limit to “all three” (OA/MA/SA) top ups. The only limit for those top ups is the CPF Annual Limit ($37,740). This $37,740/year “CPF piggybank” can be pretty interesting if you’re flush with cash from age 55 onward. It’s better than any fixed deposit, certainly.

Current rules, subject to change.

 

[foozgarden]

your argument is correct. it makes perfect sense. what is missing is the bequest value.

For Rss
based on your 1012 per month for 26 years on 4%, i assume that you have 196k (probably 190k).
it takes 26 years to finish drawing every cent of it. if it is after
it means that if you die at 80 (15 years(, you still have 107k for your kids.

For CPF life
your 196k does not earn interest. you are drawing at 1085. it will take you 196k/1085 = 180 months (15 years) to finish drawing. if you start to draw at 65 means that if you die at 80, your kids get nothing left.

this is what i meant by bequest value. you choose one that suits you.

spot on ...

ah.. i see what you mean..
yes, i didnt take account the bequest.
how do we calculate the xirr, taking into the account the bequest?

my post is very one sided.

you chose cpf life and lived till you are 100, you are going to win big. better than striking 4D

in this case... one spouse on RSS , the other on cpf life?
can hedge? haha
statistically, who lives longer? male or female?

It really does depend.
My mum recently made a choice too, based on my recommendation she went for CPF Life Escalating plan. Maybe it's less money for me if she passes early, but I want her to have a fulfilling life all the way to the end if she remains healthy.

i am not concern with bequest too.. my view is to get as much as early as possible to enjoy the money wwhile still can walk .. at 90+ , how to go holiday and enjoy?

There doesn’t seem to be any age limit to Retirement Account top ups. The only limit is the current Enhanced Retirement Sum.

The age 80 limit is simply the deadline for choosing CPF LIFE (any CPF LIFE payout plan) if you aren’t already on CPF LIFE. You might not be on CPF LIFE if your RA balance is low (under $60,000) or if you’ve previously opted out because you have a suitable private annuity/pension substitute. And I think the CPF LIFE enrollment deadline is actually slightly earlier for administrative reasons, so don’t cut that one too close.

There’s also no age limit to “all three” (OA/MA/SA) top ups. The only limit for those top ups is the CPF Annual Limit ($37,740). This $37,740/year “CPF piggybank” can be pretty interesting if you’re flush with cash from age 55 onward. It’s better than any fixed deposit, certainly.

Current rules, subject to change.

so once the monthly payout starts for old RSS.. the money can "recycle" back to RA account