CPF Account Value Thread 2023

[henrylbh]

if you have 170k and you draw 1k a month, a large principal will continue to roll for a long time

if you have 170k and you draw 3k a month, your principal will be depleted very quickly. nothing left to roll

It does not work that way or the way you want. The min payout is decided by them.

 

[toBfair]

if you have 170k and you draw 1k a month, a large principal will continue to roll for a long time
did you mean for CPFL monthly payout 1k and lifetime?
if you have 170k and you draw 3k a month, your principal will be depleted very quickly. nothing left to roll

for RSS monthly payout is $3k and will be depleted after 5years

I will not kill the golden goose that lays the golden egg, but I no longer have the golden goose. We were able to continue to support our parents till their last day, so no need for insurance. We are actually planning to let CPF payout to take over for parent's monthly allowance as in we also not sure how far we can stay in the work force

I originally plan to make RA/CPFL basic (we have no choice but to join when our time comes) my golden goose but the govt continued to change rules every year and finally kill my "golden goose" plan! So, I have to change plans. Change is a constant, so we just need to be prepared for it when it comes. I supposed many gov 'spy' are reading and closing all loopholes

Good luck to you! Thank you.

Just realised my mistake. Nobody is pointing out or shooting me for a glaring error in my para of post #367 -> If she opts for CPFL, there is no bequest if she passed out by about 82?

a change was introduced in 2018 where members who reached the age of 70 (i.e. cohorts born on or after 1948) would automatically receive payouts. Your mum was in that generation before 1948. That generation was allowed to keep CPF as bequest, if money is not needed. But the rules has changed again this year, to make everyone who is 70 and above this year to start monthly payout, like it or not

You have missed all those years of topping up RA from the time she reached age 55. If topped up to max each year, her monthly payout would easily be to 5k or more. Twenty years ago, there are many negative talks on CPF will lock our money with no return. There are less talk and info on CPF payout, everyone only know that the goal post kept shifting. We also struggle on personal families financial to settle down on those days. Started to build own cpf SA to meet FRS, then come to build parent RA golden goose's nest.

 

[toBfair]

It does not work that way or the way you want. The min payout is decided by them.

Yes u r right. Had tried the CPF payout calculator, no matter how much you top/refund back into the parent cpf RA, the next RSS payout just auto readjusted with increment sum but not lengthened the duration, default 5years.

 

[royalmix]

for RSS monthly payout is $3k and will be depleted after 5years

At this stage, you are still asking so many important questions, that is worrying! Did you talk to CPFB with your mum to ask about payout under RSS vs CPF Life? It is important you understand the key differences between RSS and CPF Life, which I doubt you do from the questions you asked. Pls do not rely on those calculations people made, ask CPFB for the correct figures and what happens to each. Plus what happens with future topups to RA.

I can tell you CPF Life will eat up some of your topups and she will have to continue to pay insurance costs (not recoverable unless she live beyond 90!)

More payout under RSS is good, whether you reinvest into RA or elsewhere when interest rates are more attractive, you have all the flexibility to make more money for her.

Read this change in 2019 to RSS payout https://www.todayonline.com/singapo...ut-period-be-capped-age-90-2020-josephine-teo

 

[henrylbh]

for RSS monthly payout is $3k and will be depleted after 5years

My apology. Should be nil towards 93. If payout is 1000 under RSS, there would be about 85k left in RA at 93.

 

[dork32]

It does not work that way or the way you want. The min payout is decided by them.

i am not saying it works this way. i am using the numbers given by the poster. read his post 343

 

[dork32]

for RSS monthly payout is $3k and will be depleted after 5years

this numbers are from you. i am making an analysis based on your numbers
you said rss payout is 3k. after 5 years, you have nothing left in your ra. you cannot earn any more interest in your ra since you have nothing left
you said cpf life payout is 1k. your 170k is going to last very much longer than 5 years if you draw just 1k a year. so you get to enjoy ra interest for a much longer time.
cpf life interest is 20% lower than rss at the start. so you will still quite a large interest for a long time

 

[Shion]

Over $4 billion of CPF funds invested in T-bills and fixed deposits in Jan and Feb​

https://www.straitstimes.com/busine...-in-t-bills-and-fixed-deposits-in-jan-and-feb

 

[henrylbh]

Over $4 billion of CPF funds invested in T-bills and fixed deposits in Jan and Feb​

https://www.straitstimes.com/busine...-in-t-bills-and-fixed-deposits-in-jan-and-feb

That means slightly more than 3,000 bidders with about 250k for each auction or about 800m of more than 11b bidding for 4.5b.

 

[henrylbh]

this numbers are from you. i am making an analysis based on your numbers
you said rss payout is 3k. after 5 years, you have nothing left in your ra. you cannot earn any more interest in your ra since you have nothing left
you said cpf life payout is 1k. your 170k is going to last very much longer than 5 years if you draw just 1k a year. so you get to enjoy ra interest for a much longer time.
cpf life interest is 20% lower than rss at the start. so you will still quite a large interest for a long time

You are confusing him with your explanation.

 

[dork32]

You are confusing him with your explanation.

so what is confusing? you draw more from your principal, you have less principal so less interest in ra. you draw less from your principal, you have more principal so more interest

 

[BBCWatcher]

When the government nudges it nudges.

 

[BBCWatcher]

Henry, I think Dork32 is implicitly assuming the CPF LIFE Basic Plan. I think he's correct, but a few questions to the CPF Board would clarify. The central point is that even if you solely care about interest you don't get any CPF interest (pool or otherwise) when dollars aren't inside CPF. And if the dollars are streaming out much faster (yes, with classic RSS especially in this situation) then you can't collect much RA interest. The dollars are coming out too fast.

The government seems to be "nudging" this cohort — the ones age 79 years 10 months and younger, at least — in favor of CPF LIFE with this series of classic RSS rule changes, including this latest one. My suggestion is to take their hint and consider the offer seriously. I think it's generally the correct decision in these circumstances, but Dork32 has highlighted another reason I really didn't think of that makes sense to me, too. Basically even if you consider the CPF LIFE premium to be "thrown away" you still might be much better off keeping >80% of your RA balance in RA longer rather than 100% of your RA balance in RA for a much, much shorter time.

 

[henrylbh]

Henry, I think Dork32 is implicitly assuming the CPF LIFE Basic Plan. I think he's correct, but a few questions to the CPF Board would clarify. The central point is that even if you solely care about interest you don't get any CPF interest (pool or otherwise) when dollars aren't inside CPF. And if the dollars are streaming out much faster (yes, with classic RSS especially in this situation) then you can't collect much RA interest. The dollars are coming out too fast.

The government seems to be "nudging" this cohort — the ones age 79 years 10 months and younger, at least — in favor of CPF LIFE with this series of classic RSS rule changes, including this latest one. My suggestion is to take their hint and consider the offer seriously. I think it's generally the correct decision in these circumstances, but Dork32 has highlighted another reason I really didn't think of that makes sense to me, too. Basically even if you consider the CPF LIFE premium to be "thrown away" you still might be much better off keeping >80% of your RA balance in RA longer rather than 100% of your RA balance in RA for a much, much shorter time.

I am aware that Dork32 is talking about CPFL Basic. That why I deleted my post with a view of rewording what I said .

The gov is not nudging the earlier cohort. It's simply shaft it into their throats without option and giving no real good reason for doing so. Correct decision for what good or whose good or correct only to you? Most knowingly are prepared hold RA till death do they part or till they really need the payouts. So what is there to seriously consider the offer? It's NOT an offer, my boy.

 

[BBCWatcher]

OK, "whatever," but there's a decision to consider. And the facts are that staying on classic RSS means dollars empty from RA in relative torrents. With CPF LIFE the dollars stream out in a relative trickle.

One factor in this decision is the "next best alternative" for dollars once they exit RA, but I think that's already been pretty well answered: the dollars stayed in RA up to this point. It seems reasonable to assume this individual would prefer to keep more dollars in RA longer. How strong is that preference? None of us can really say except this individual.

 

[henrylbh]

OK, "whatever," but there's a decision to consider. And the facts are that staying on classic RSS means dollars empty from RA in relative torrents. With CPF LIFE the dollars stream out in a relative trickle.

One factor in this decision is the "next best alternative" for dollars once they exit RA, but I think that's already been pretty well answered: the dollars stayed in RA up to this point. It seems reasonable to assume this individual would prefer to keep more dollars in RA longer. How strong is that preference? None of us can really say except this individual.

I am not going over this again as you are evading what I questioned. Gov nudging and consider the offer seriously and generally the correct decision

 

[henrylbh]

At this stage, you are still asking so many important questions, that is worrying! Did you talk to CPFB with your mum to ask about payout under RSS vs CPF Life? It is important you understand the key differences between RSS and CPF Life, which I doubt you do from the questions you asked. Pls do not rely on those calculations people made, ask CPFB for the correct figures and what happens to each. Plus what happens with future topups to RA.

I can tell you CPF Life will eat up some of your topups and she will have to continue to pay insurance costs (not recoverable unless she live beyond 90!)

More payout under RSS is good, whether you reinvest into RA or elsewhere when interest rates are more attractive, you have all the flexibility to make more money for her.

Read this change in 2019 to RSS payout https://www.todayonline.com/singapo...ut-period-be-capped-age-90-2020-josephine-teo

I share ask CPFB for the correct figures. I wrote to CPFB and they replied in writing. I had to point out that the numbers were way out of what I had expected. They replied with apology and the numbers were amended to what I had expected. For those who had no idea about CPF, they would fall for the initial reply as gospel.

In another instance, I meet CPFB in person to transfer my OA to my father's RA. The staff said, she will transfer SA to my father. I had to disagree but her reply made me and my father to walk off with nothing accomplished that day. Had to write to Head Office and then go back to the branch to complete my mission.

 

[royalmix]

Always do your own due diligence, dun rely on what others assume they know the rules or try to put assumptions into your mind/thinking. It is always best to double confirm your understanding of the rules and the ultimate outcome for your case with CPF Board.

Are the calculators able to simulate the results of various scenarios?

Double or triple confirm your own understanding, what others say, what is written at be website (but is quite a useless website now compared to the old one).
How much will you get as payout RSS vs CPF Life?
What happens if you continue to topup RA after payout starts?
How long will payout last (under RSS per the new rules it is age 90, what if you continue to topup, can u request to extend the duration, can u request to increase or reduce the payout, etc) ( I cannot find much info at the website cos it is all to steer you towards CPF Life!
Under CPF LIfe, RA payouts (net of 10-20% premium) will last till age 90, thereafter payout comes from the pool from the premium plus interest). If she die at 90, she lose her interest on the premium (cost of insurance) in the pool, if she continues to topup after payout start, she lose more interest (cost of insurance) on additional premium in the pool.
Do some homework, calculate the estimated total payout under RSS and CPF Life by age 90, compare! Dun forget the cost of insurance! Calculate the estimated cost of insurance. Be prepared before you meet up with CPFB, as this is the most crucial meeting before she decides to kill her golden goose!

This is what I will do if it is my money.
Of course if you do not think you can support her (financially) till her last day, then kill the golden goose! But your family still need to give her emotional and other support, dun leave her alone with CPF Life.

Good luck to you!

 

[dork32]

Henry, I think Dork32 is implicitly assuming the CPF LIFE Basic Plan. I think he's correct, but a few questions to the CPF Board would clarify. The central point is that even if you solely care about interest you don't get any CPF interest (pool or otherwise) when dollars aren't inside CPF. And if the dollars are streaming out much faster (yes, with classic RSS especially in this situation) then you can't collect much RA interest. The dollars are coming out too fast.

actually i am not assuming that it is cpf life basic. tbfair say that it is cpf life basic. i am just following what he has said

 

[s0crates]

It's quite clear that the government highest priority is to ensure the sustainability of the system even at the expense of downsizing and dragging out payouts (RSS Vs CPF LIFE BASIC).

It's prudent for them to do so, but I wish that they have pushed GIC to give higher interest to sustain the payouts.

Sure... CPF is already the best annuity, gives the best risk free returns blah blah blah blah. I get it. But with inflation at all time high and cpf interest rates not adjusting with higher interest, we are left to deal with this lol.

Of course, they will just increase FRS by a larger amount but at no cost to the system again lol