Annuity Plan

[basic6]

Recently a financial planner ask me to take up an annuity plan. He carries the following product: Aviva MyLifeIncome, Tm Retirement GIO Plus and NTUC vivowealth. Anyone has the above plan and which one is the best one?

 

[boredboiboi]

Recently a financial planner ask me to take up an annuity plan. He carries the following product: Aviva MyLifeIncome, Tm Retirement GIO Plus and NTUC vivowealth. Anyone has the above plan and which one is the best one?

Since the person intro you, why dont u get the policy illustration and read?
Another 1 from china life, lifetime income, not sure why the agent did not intro u, the return might be better than aviva.

 

[moejoseph]

Recently a financial planner ask me to take up an annuity plan. He carries the following product: Aviva MyLifeIncome, Tm Retirement GIO Plus and NTUC vivowealth. Anyone has the above plan and which one is the best one?

AXA has just launched a powerful annuity + legacy product as well

 

[mSnooze]

Recently a financial planner ask me to take up an annuity plan. He carries the following product: Aviva MyLifeIncome, Tm Retirement GIO Plus and NTUC vivowealth. Anyone has the above plan and which one is the best one?

Among those 3, MyLifeIncome is the winner.

 

[BBCWatcher]

Recently a financial planner ask me to take up an annuity plan.

That’s not a great reason for doing something. Are you convinced you need such a product? Is the planner compensated in any way(s) if you buy such a product from him/her?

The list of life annuity products sold in Singapore is available here. The primary reason you might buy such a product is if you’re going to remain in Singapore for the rest of your life, if you’re concerned about outliving your savings, if you have already maxed out CPF LIFE (ERS level), and if you don’t feel the income stream from CPF LIFE is sufficient to support your basic lifestyle needs/aspirations.

 

[boredboiboi]

That’s not a great reason for doing something. Are you convinced you need such a product? Is the planner compensated in any way(s) if you buy such a product from him/her?

The list of life annuity products sold in Singapore is available here. The primary reason you might buy such a product is if you’re going to remain in Singapore for the rest of your life, if you’re concerned about outliving your savings, if you have already maxed out CPF LIFE (ERS level), and if you don’t feel the income stream from CPF LIFE is sufficient to support your basic lifestyle needs/aspirations.

More and more people getting private Annuity is due to they worry the payout will change to age 70. As now is auto age 70 if u didnt opt for it.

 

[tangent314]

More and more people getting private Annuity is due to they worry the payout will change to age 70. As now is auto age 70 if u didnt opt for it.

Really there are lots of other better ways to bridge between the ages of 65 to 70 than a private annuity.

There isn't much value in almost all of the 'private annuity' plans available. With the exception of Manulife Retire Ready Plus (and maybe 1 or 2 more), they do not draw down on principal, meaning it's similar to putting your money into a bank and just paying you out the interest earned every year, after taking a cut out of the principal amount and the interest earned of course. This kind of 'annuity' is pretty easy to DIY, unlike the real annuities that draw down on your principal and require longevity insurance to ensure they last your life time (e.g. CPF Life)

 

[BBCWatcher]

More and more people getting private Annuity is due to they worry the payout will change to age 70. As now is auto age 70 if u didnt opt for it.

Really there are lots of other better ways to bridge between the ages of 65 to 70 than a private annuity.

There isn't much value in almost all of the 'private annuity' plans available. With the exception of Manulife Retire Ready Plus (and maybe 1 or 2 more), they do not draw down on principal, meaning it's similar to putting your money into a bank and just paying you out the interest earned every year, after taking a cut out of the principal amount and the interest earned of course. This kind of 'annuity' is pretty easy to DIY, unlike the real annuities that draw down on your principal and require longevity insurance to ensure they last your life time (e.g. CPF Life)

I agree with Tangent314.

Another possible reason to buy a life annuity is if you have either a huge Supplementary Retirement Scheme account, or if you have an almost huge SRS and expect to have quite a lot of taxable income in retirement, such as rental income. In that case Manulife offers a fully SRS qualified life annuity that's the only way to stretch the tax advantaged SRS withdrawal period beyond 10 calendar years.

Some people cannot be CPF members because they are not citizens or PRs, but they expect to retire in Singapore -- LTVP/LTVP+ holding spouses, for example. Then it'd make sense to buy some longevity insurance (i.e. a life annuity).

Some people living in Singapore who expect to retire elsewhere -- because they're not allowed to retire in Singapore, for example -- and who don't have access to quality life insurers paying benefits in a quality currency -- might decide to purchase a Singapore dollar denominated life annuity (longevity insurance).

Sometimes it makes sense to buy an extra life annuity for a mentally or physically challenged individual, to help reliably support his/her lifelong care needs.

In many/most of these cases an escalating payout feature is helpful, or at least a "layered" annuity structure with a second or even third annuity starting to pay at later dates -- "stair steps."

Anyway, these scenarios are fairly exotic ones.

 

[boredboiboi]

I agree with Tangent314.

Another possible reason to buy a life annuity is if you have either a huge Supplementary Retirement Scheme account, or if you have an almost huge SRS and expect to have quite a lot of taxable income in retirement, such as rental income. In that case Manulife offers a fully SRS qualified life annuity that's the only way to stretch the tax advantaged SRS withdrawal period beyond 10 calendar years.

Some people cannot be CPF members because they are not citizens or PRs, but they expect to retire in Singapore -- LTVP/LTVP+ holding spouses, for example. Then it'd make sense to buy some longevity insurance (i.e. a life annuity).

Some people living in Singapore who expect to retire elsewhere -- because they're not allowed to retire in Singapore, for example -- and who don't have access to quality life insurers paying benefits in a quality currency -- might decide to purchase a Singapore dollar denominated life annuity (longevity insurance).

Sometimes it makes sense to buy an extra life annuity for a mentally or physically challenged individual, to help reliably support his/her lifelong care needs.

In many/most of these cases an escalating payout feature is helpful, or at least a "layered" annuity structure with a second or even third annuity starting to pay at later dates -- "stair steps."

Anyway, these scenarios are fairly exotic ones.

Totally agree with both of u

 

[AvatarViper]

if you are eligible for CPF life and you intend to retire in SG, nothing can beat CPF life.

 

[BrandonnC]

I agree with Tangent314.

Another possible reason to buy a life annuity is if you have either a huge Supplementary Retirement Scheme account, or if you have an almost huge SRS and expect to have quite a lot of taxable income in retirement, such as rental income. In that case Manulife offers a fully SRS qualified life annuity that's the only way to stretch the tax advantaged SRS withdrawal period beyond 10 calendar years.

Some people cannot be CPF members because they are not citizens or PRs, but they expect to retire in Singapore -- LTVP/LTVP+ holding spouses, for example. Then it'd make sense to buy some longevity insurance (i.e. a life annuity).

Some people living in Singapore who expect to retire elsewhere -- because they're not allowed to retire in Singapore, for example -- and who don't have access to quality life insurers paying benefits in a quality currency -- might decide to purchase a Singapore dollar denominated life annuity (longevity insurance).

Sometimes it makes sense to buy an extra life annuity for a mentally or physically challenged individual, to help reliably support his/her lifelong care needs.

In many/most of these cases an escalating payout feature is helpful, or at least a "layered" annuity structure with a second or even third annuity starting to pay at later dates -- "stair steps."

Anyway, these scenarios are fairly exotic ones.

If I intend to retire in say, Malaysia for the next 20 years, and after that return to Singapore, hopefully the last 5 years of my life to kick the bucket, what are the types of annuity or insurances which is advisable?

Or rather, how to I plan for my retirement insurances? Thanks.

 

[BBCWatcher]

If I intend to retire in say, Malaysia for the next 20 years, and after that return to Singapore, hopefully the last 5 years of my life to kick the bucket, what are the types of annuity or insurances which is advisable?

Or rather, how to I plan for my retirement insurances?

I would refer you to AvatarViper’s answer: CPF LIFE. That still works, and it’s still the best deal of its kind.

If you want more than what CPF LIFE offers — you want even more longevity insurance — then you’d take a look at what’s available in Malaysia and in Singapore and do some careful comparison shopping. I suspect the insurers in Singapore will (overall) beat what’s on offer in Malaysia, but even so you could hedge your bets a little and buy some of both.

 

[JuniorLion]

Really there are lots of other better ways to bridge between the ages of 65 to 70 than a private annuity.

There isn't much value in almost all of the 'private annuity' plans available. With the exception of Manulife Retire Ready Plus (and maybe 1 or 2 more), they do not draw down on principal, meaning it's similar to putting your money into a bank and just paying you out the interest earned every year, after taking a cut out of the principal amount and the interest earned of course. This kind of 'annuity' is pretty easy to DIY, unlike the real annuities that draw down on your principal and require longevity insurance to ensure they last your life time (e.g. CPF Life)

Have to consider on whether Manulife is always keeping with its 'projected payout'. There are people who said that Manulife is reducing it regularly (e.g. not keeping its promises).

 

[YKOHYL]

Hi for CPF top up, are we able to withdraw the top Up and interest earned at age 55 if we hit FRS?

Assume earned CPF in special acc is $120k
Top up CPF $50k
Interest earn $50k

I can withdraw $44k at age 55?

They will take into account Top up and interest first and trf to Retirement account or opposite way?

 

[BBCWatcher]

Hi for CPF top up, are we able to withdraw the top Up and interest earned at age 55 if we hit FRS?

On your 55th birthday your Retirement Account will be formed, drawing first from your Special Account then, if necessary, from your Ordinary Account. Let’s suppose your Retirement Account ends up at the Full Retirement Sum (“fully funded”), which is exactly what CPF tries to do on your 55th birthday and what will happen if your SA+OA equals or is greater than the Full Retirement Sum. You’re then free to withdraw any remaining (and future added!) dollars from your Special Account and Ordinary Account whenever you wish, in that order.

It doesn’t particularly matter what the source of the dollars was at that point. If your RA is “fully funded,” all SA+OA turns into an “on demand” savings account starting from your 55th birthday.

If you’re aiming for less than the Full Retirement Sum — if you’re aspiring to be poorer, really (and to be blunt) — OK, we can discuss what happens then if you really wish. Would you like to head down that rabbit hole, or are you satisfied with the answer above?

 

[YKOHYL]

On your 55th birthday your Retirement Account will be formed, drawing first from your Special Account then, if necessary, from your Ordinary Account. Let’s suppose your Retirement Account ends up at the Full Retirement Sum (“fully funded”), which is exactly what CPF tries to do on your 55th birthday and what will happen if your SA+OA equals or is greater than the Full Retirement Sum. You’re then free to withdraw any remaining (and future added!) dollars from your Special Account and Ordinary Account whenever you wish, in that order.

It doesn’t particularly matter what the source of the dollars was at that point. If your RA is “fully funded,” all SA+OA turns into an “on demand” savings account starting from your 55th birthday.

If you’re aiming for less than the Full Retirement Sum — if you’re aspiring to be poorer, really (and to be blunt) — OK, we can discuss what happens then if you really wish. Would you like to head down that rabbit hole, or are you satisfied with the answer above?

Thanks! I am now topping up my cpf..but will like to hv the option to withdraw any amount above FRS at age 55 in the event i need the cash then. If there is no need, i will keep to earn interest.

But somehow i read any top up amount and interest earn cannot be withdraw. So a bit worried what if i need cash at age 55, does this mean i cannot touch the excess amount at FRS if i have a big chunk being top up cpf

 

[kelhot2001]

Thanks! I am now topping up my cpf..but will like to hv the option to withdraw any amount above FRS at age 55 in the event i need the cash then. If there is no need, i will keep to earn interest.

But somehow i read any top up amount and interest earn cannot be withdraw. So a bit worried what if i need cash at age 55, does this mean i cannot touch the excess amount at FRS if i have a big chunk being top up cpf

Try asking here, more opinions

https://forums.hardwarezone.com.sg/money-mind-210/post-55-monthly-withdrawals-cpf-6029706-14.html

 

[BBCWatcher]

But somehow i read any top up amount and interest earn cannot be withdraw. So a bit worried what if i need cash at age 55, does this mean i cannot touch the excess amount at FRS if i have a big chunk being top up cpf

Well, let’s suppose you have zero compulsory contributions, and all your contributions to your Special Account are voluntary top ups. You have a rich uncle who deposited the Full Retirement Sum into your Special Account when you were born, let’s suppose. (This actually happens occasionally.)

Here’s the “secret”: neither you nor your wealthy uncle are allowed to top up your Special Account once it reaches the Full Retirement Sum. There’s a limit to such top ups: the FRS.

You simply don’t have to worry about this unless your goal, your aspiration, is to try to withdraw funds from your Retirement Account to drag your Retirement Account down below the Full Retirement Sum. Which is a very, very odd thing to do since the Retirement Account is attractive (well above market interest) and the Full Retirement Sum is not huge — certainly not huge for people visiting a forum called “Money Mind.” You’re allowed to be odd in many good and bad ways — it’s mostly a free country — but this’d be not-good-odd.

 

[bright_84]

I agree with Tangent314.

Another possible reason to buy a life annuity is if you have either a huge Supplementary Retirement Scheme account, or if you have an almost huge SRS and expect to have quite a lot of taxable income in retirement, such as rental income. In that case Manulife offers a fully SRS qualified life annuity that's the only way to stretch the tax advantaged SRS withdrawal period beyond 10 calendar years.

Some people cannot be CPF members because they are not citizens or PRs, but they expect to retire in Singapore -- LTVP/LTVP+ holding spouses, for example. Then it'd make sense to buy some longevity insurance (i.e. a life annuity).

Some people living in Singapore who expect to retire elsewhere -- because they're not allowed to retire in Singapore, for example -- and who don't have access to quality life insurers paying benefits in a quality currency -- might decide to purchase a Singapore dollar denominated life annuity (longevity insurance).

Sometimes it makes sense to buy an extra life annuity for a mentally or physically challenged individual, to help reliably support his/her lifelong care needs.

In many/most of these cases an escalating payout feature is helpful, or at least a "layered" annuity structure with a second or even third annuity starting to pay at later dates -- "stair steps."

Anyway, these scenarios are fairly exotic ones.

doesn't tax on srs withdrawal still apply on the annuity.

 

[BBCWatcher]

doesn't tax on srs withdrawal still apply on the annuity.

If you buy Manulife’s fully SRS qualified life annuity, then the SRS rules apply to all qualified payouts, including those that occur after the 10 calendar year withdrawal window. When you make a qualified withdrawal from a SRS account, income tax applies to 50% of the withdrawal amount. This means that you can receive up to $40,000 from your SRS per calendar year and, if that’s your only source of taxable income, there’s zero tax owed. (50% of $40,000 is $20,000, and there’s no Singapore income tax if your total taxable income is $20,000 or less.)

The fully SRS qualified life annuity allows you to effectively stretch and lower your SRS-related income every year, and for more than 10 years, reducing or eliminating Singapore income tax.