About annuities

[tiny]

How can that be?
CPF - Put in $155K at age 55, ten years later payout is abt $1.2K per month till death.
Can TM match the same payout per month?

The $155k amount is meant for citizens who turn 55 years old this year. Not $155k when you turn 55 many years later.

http://www.straitstimes.com/news/singapore/more-singapore-stories/story/parliament-mp-zaqy-calls-govt-led-plan-improve-returns-c

 

[tiny]

I'd be very interested if any company can match that!

Yes. Tokio Marine. Go find your own agent to get a quotation.

 

[phone987]

The $155k amount is meant for citizens who turn 55 years old this year. Not $155k when you turn 55 many years later.

Parliament: MP Zaqy calls for govt-led plan to improve returns on CPF savings

Ya ya, for those turning 55 years later on will need a higher min sum. However a higher min sum also mean a higher monthly payout.

"$155K get $1.2K monthly" is used as we all know this is what CPF is paying now. From what I know, TM is far from matching it.

 

[sandwicher]

Ya ya, for those turning 55 years later on will need a higher min sum. However a higher min sum also mean a higher monthly payout.

"$155K get $1.2K monthly" is used as we all know this is what CPF is paying now. From what I know, TM is far from matching it.

Of course higher min sum la, have to factor in inflation? 155k 20 years later where got enough. Don't know why so many Singaporeans super against raising the min sum. They think even the current 1.2k per month is sufficient?

 

[henrylbh]

Get an annuity only if you think you will live a long life (past 85 perhaps). A plan from my side requires $148,712 single premium at age 55, to give you a projected total of $333,820 from age 65 to 85. To put it into perspective, CPF LIFE would have given you $1200 x 20 x 12 = $288,000 till then, and is almost $7k more expensive in terms of single premium.

For the naysayers who say this is just projected, we have been doing well, even during 2008. But of course, past performance is not an indicator of future performance.

CPF Life, strangely enough, has nothing guaranteed. Not a single dollar. But we trust our government right?

No need to say that with lesser premium I get more compared to CPF Life. I am willing to pay 155k instead of 148,712. Just pay me 10% more than whatever CPF Life would pay as long as I live and I will buy your plan.

Whatever guarantee insurers give is not a good assurance compare to the government guarantee. In time of financial crisis, the government got to step in to give unlimited guarantee to depositors in private banks as done before.

In the last financial crisis, I was shocked to note the magnitude of impairment of financial assets held by TM. Even AIA was not spared.

 

[phone987]

Of course higher min sum la, have to factor in inflation? 155k 20 years later where got enough. Don't know why so many Singaporeans super against raising the min sum. They think even the current 1.2k per month is sufficient?

i am not against raising of min sum. We are not discussing on how much should be the min sum here. We are also not discussing about how much monthly payout is enough to meet future living expense. Its whether any private annuity plan can be better than CPF Life annuity. That is purely how much you put in against how much you get back.

As i said, I have used the current min sum of 155K as a benchmark to compare with any private annuity.

 

[phone987]

A plan from my side requires $148,712 single premium at age 55, to give you a projected total of $333,820 from age 65 to 85. To put it into perspective, CPF LIFE would have given you $1200 x 20 x 12 = $288,000 till then, and is almost $7k more expensive in terms of single premium.

I don't think you are comparing apple to apple. CPF Life is an annuity plan, that pay for life.

So your plan, put in $148K at 55, able to pay $1390 monthly (333,820 / 20 / 12) from 65 onwards?

Does your plan pay for life or stop at 85?

 

[Lewis.T]

Hi, like I mentioned, it isn't really a full annuity. It will however, give you a higher payout till 85 for a lesser premium. For CPF Life to make sense, you have to live past 88 to start earning "more" than the plan I was talking about. That was the point I am getting at.

 

[sandwicher]

Hi, like I mentioned, it isn't really a full annuity. It will however, give you a higher payout till 85 for a lesser premium. For CPF Life to make sense, you have to live past 88 to start earning "more" than the plan I was talking about. That was the point I am getting at.

Morning! So... Anyone contacted you to buy any, yet?

 

[Lewis.T]

Morning! So... Anyone contacted you to buy any, yet?

Good morning, that was not the purpose of it, I don't have to be here to get business from this plan. I'm showing the people who think CPF Life is the greatest thing since buttered toast that it's not all that fancy, and is hardly much better than something you can get from outside.

There also have been comparisons made showing that the old CPF system is better than CPF Life. There will naturally be some who argue that old people can't spend their money wisely etc, those people are actually the minority of people. Don't be brainwashed by propaganda.

If you are saving, not just in CPF, chances are you know how to manage your money and not squander it all in a day.

 

[RM2SSG]

There also have been comparisons made showing that the old CPF system is better than CPF Life. There will naturally be some who argue that old people can't spend their money wisely etc, those people are actually the minority of people. Don't be brainwashed by propaganda.

If you are saving, not just in CPF, chances are you know how to manage your money and not squander it all in a day.

We citizens are not burdened with the responsibilities of looking after its people but the state does. It is very easy for people with their own "propaganda" to say "we know how to manage our own money". At the end of the day, the state has to pick up the pieces when **** hit the fan.

For group plans like CPF Life or Medishield Life to work, it requires the participation of the whole nation. Speaking for myself, I feel reassuring that I will have the projected $1,200 every month until I die for my regular expenses.

CPF Life will be part of my regular income during retirement, that is why I am also searching for other sources. I read through Tokio Marine plans and it seems to me most of theirs will need 20 years before first payout is given. Too late for me but I think for those who started young (like before 40 years of age), perhaps it is something to look at.

 

[limster]

Even though I DIY and plan to have a "dividend warrior" retirement portfolio, I think CPF Life is a useful emergency fund. Low risk and low return".

This is in the event that after 65, you suffer mental or physical problem that makes managing the DIY portfolio difficult, or worse yet, leads you getting tricked by conman and lose the money. (Insurance policy, also can get tricked into taking a large loan on the policy and giving the money to the conman). In that case, I would be thankful that CPF life cannot be 'stolen'.

 

[bakuten]

We citizens are not burdened with the responsibilities of looking after its people but the state does. It is very easy for people with their own "propaganda" to say "we know how to manage our own money". At the end of the day, the state has to pick up the pieces when **** hit the fan.

For group plans like CPF Life or Medishield Life to work, it requires the participation of the whole nation. Speaking for myself, I feel reassuring that I will have the projected $1,200 every month until I die for my regular expenses.

CPF Life will be part of my regular income during retirement, that is why I am also searching for other sources. I read through Tokio Marine plans and it seems to me most of theirs will need 20 years before first payout is given. Too late for me but I think for those who started young (like before 40 years of age), perhaps it is something to look at.

U say state has the responsibility.

Lets see here.

State gets its funds from the ppl.
So issnt it the same as the ppl shouldering that responsibility?

 

[RM2SSG]

U say state has the responsibility.

Lets see here.

State gets its funds from the ppl.
So issnt it the same as the ppl shouldering that responsibility?

The context is people wants to manage their own CPF fund.

 

[antonpoh]

The context is people wants to manage their own CPF fund.

Yup, I would rather do it myself.

 

[sandwicher]

And for a huge portion of the population that doesn't manage their funds (well)? Who's picking up the tab? Yeah, everyone else paying taxes.

Just read the recent survey on how many people have started saving for retirement, and the results would be scary. Take a walk along the street and you'll find that a lot people aren't as financial savvy as most of us here in the forums. Those people need a system for protection.

It is actually everyone's own responsibility for their own retirement. Nobody owes us a living. You want the country to have a crippling pension system like the Europeans and Americans? CPF is better off because everyone is responsible for their own retirement, not living off some other tax payers' money.

 

[phone987]

I'm showing the people who think CPF Life is the greatest thing since buttered toast that it's not all that fancy, and is hardly much better than something you can get from outside.

since when you have shown a private plan that has better payout than CPF Life?

Your don't know what plan that end at age 85 is by no means a on par comparison with CPF Life. Do you understand what is an annuity? Or is that how you do comparison of products?

Just run your prudential annuity plan and tell us straight how much is the payout.

It is not that i worship CPF Life so much, just show me a better private annuity, i will jump ship straight away.

 

[Lewis.T]

I've already given you the info, go read my post again and there are figures there. I'm showing you a close alternative you could have gotten otherwise if your 155k is not in CPF Life. That plan makes more sense to me than having a life-long annuity that I don't think I'll live that long to benefit from.

Some people will no doubt feel that CPF Life is better, think they'll live well past their 90s, and that's good for them. For the more realistic people however, you'll know that CPF Life isn't really tailored for your benefit but to increase reserves. Think what you will of this, this is purely my opinion. Some of you will share the same views as me and some will not. No point being confrontational.

Edit: Did a quick search, found an interesting post. http://forums.hardwarezone.com.sg/79862157-post13.html
Edit 2: If you are free and open minded to other voices, check out Christopher Balding's entries on CPF.

 

[tiny]

Lewis. There are people who just choose to shut themselves out and refused to believe private plans could be good or even better. I can name so many great things that different private insurance companies can complement: Surrender payout benefit, death payout benefit, inflation-adjusted payouts, premium waiver upon certain medical conditions, lump sum longevity bonus payout, and finally... wait for it...

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Total amount of premiums payable by policyholder (You) throughout the policy term and guaranteed (remains unchanged) by contract.

 

[Lewis.T]

Lewis. There are people who just choose to shut themselves out and refused to believe private plans could be good or even better. I can name so many great things that different private insurance companies can complement: Surrender payout benefit, death payout benefit, inflation-adjusted payouts, premium waiver upon certain medical conditions, lump sum longevity bonus payout, and finally... wait for it...

...





...





wait for it...





....





....





Total amount of premiums payable by policyholder (You) throughout the policy term and guaranteed (remains unchanged) by contract.

Hi tiny, I have thought of mentioning all the other benefits as well from getting a private plan, but then it wouldn't be an apple to apple comparison because CPF Life doesn't have those features would it? Haha

Anyways, for all the others reading here for info, most of us have no choice but to enter CPF Life anyway, so don't think too much about it. Plan for the shortfall you still have after accounting for your payouts from CPF Life. It's also good to plan for a little extra, in case certain elements don't do well, or reduce your retirement expectations a bit to cater for that.