Hi BBCW,

I have a few queries regarding CPF RA and the BRS/FRS and retirement.

1) If I have a property pledge, I can still opt for the FRS plan right? Is this advisable?

2) Should I leave the excess money in the RA(that is not used for BRS/FRS) for the interest or take it out for other investments or top up my children's SA? I read that withdrawals can be made anytime.

3) I have AIA healthshield gold plan Max B on top of my medisave. Since I'm approaching retirement, are there any other insurances I should take up to cover myself?

4) I have a few Endowment plans made years ago that will provide me a significant lump sum after maturity in the next few years. What should I do with these money? Should I invest in a dividend paying stock/ETF, use the dividends for retirement and pass it on to my NOK when I pass away?

Thank you

Here is my strategy:
1. Transfer all OA to SA every month until minimum sum is reached.
2. Don't buy a house. Live with parents or rent (if kid is getting big).
- Don't invest in properties. Buy a REIT and make someone work for you.
3. Invest at least 50% of monthly salary and 100% of bonus to:
- Stocks (NO ETFS or DCA strategy)
- Forex (No Stop Loss)
4. Minimise expenses:
- Parents: 1000
- Family: 500 (Future)
- Personal: 200

I am just an ordinary guy sharing some secrets to getting wealthy.

We always use 12 month interest free installment from our Credit Card providers. :s47:

Installments used to be frown upon here, but CC are very useful so long one keeps good spending habits.

On CPF topic,
BBC I commented in another post, CPF interest rates can be subjected to changes, we see CPF monies form part of our SWF, if their performances are bad, our CPF board can be forced to cut interest rates no?

Another way of saying is our CPF locked in funds have quite high TER on the 2.5-4% pa returns! :s11:=:p

Thanks for sharing.

What is ETFS?

Thank you BBCW for your detailed response - very helpful

Please sir, tell me which stocks or currencies to buy :s11:

Have the discipline to do your own research......

One reason why people do DCA in ETF is because they are lazy

To my knowledge, you can start CPF LIFE payouts as late as age 70 and, provided you have the funds, you can change your mind about participation level (increase it) as long as you do it strictly before your 80th birthday.

I would prefer more than a BRS level income stream at age 65+, so yes, I think it’s advisable to participate in CPF LIFE at a higher level.

The former, unless you need the money for immediate consumption.

What’s your approximate Medisave balance?

It depends. Approximately what percentage of your current household wealth do you have in stocks and stock-likes (which would include real estate)? And approximately how many years are you away from retirement?

Probably something he made up along the way of trolling.

Is the new CPF LIFE escalating plan worth it? At what age would it break even assuming I start at 65?

Approximately have 40k in medisave balance.

Currently have ~25% in stocks and stocks-like. This is assuming that the current balance in endowment plan & sum in CPF is included as part of the not stocks and stocks-like portion. Plan to retire in the next 2-3 years.

It's an exchange traded fund..

CPF Escalating life will give you total returns higher than cpf standard if you live to 90.

That's ETF not ETFS.

Yes. It’s the only CPF LIFE payout plan that offers some protection against inflation, which makes it the best longevity insurance, which makes it the winner by default.

Who cares? At what age are you guaranteed to die?

CPF LIFE is not a casino, MCKawe. Your other wealth can play those games, if you wish. CPF LIFE is insurance, specifically sovereign longevity insurance. It defends you against the slight (or possibly greater) risk of outliving your savings — insurance against living “too long.” And it’s the AAA-rated government doing the defending, which is really special.

All you need to decide is how much more minimum income, if any, would you you need above the Basic Retirement Sum-level CPF LIFE, and (I’d recommend) assuming payouts start at age 70 on the Escalating Plan, if/when you outlive your savings. If CPF LIFE becomes your sole source of income, could you get by on $800/month (current dollars at payout starting date, increased 2%/year in ancipation of inflation), for example? Or $950? Or $1080? Pick that number (or more) — that’s your only decision to make when the time comes. It’s truly that easy.

That’s a little light, in my view. I think you can raise that to 30% if you like, so that you have a 30-70 split (approximately) in retirement. You could make that happen naturally once you retire by spending first from the bond/bond-like portion of your assets. The endowment plan seems like the most obvious first source of spending funds, if that works.