CPF Accounts Value thread

[Toni90]

I am going repeat what I wrote many times in other CPF Life related threads:

Insurance plays with your greed and fear, your psychology.

How I view the 3 CPF Life Plans:

Those with extreme fear and greed will opt for Escalating Plan because it is designed to "cater" to inflation by giving u an annual payout which increase by 2% each year (your extreme fear of inflation). Because u think it will increase by 2% pa forever, you will ultimately be getting more mthly payout than any other plans, thus u will make more money from your CPF Life premium if u survive long enough (extreme greed) compared to other plans.

If u defer your payout start age to 70, you will be getting more mthly payout (extreme greed), so u hope to make more money faster. Another category is those who might plan to give up their PR status, so deferring till 70, they make the most from CPF, and quite without joining CPF Life before they turn 70 - extreme greed!

Those with some fear and greed will opt for Standard Plan because it has the highest mthly payout.

Those who hope to lose less money from this scheme will opt for Basic Plan and start at age 65. I am in this category.

U hope that u die early?

 

[SKenny]

I am going repeat what I wrote many times in other CPF Life related threads:

Insurance plays with your greed and fear, your psychology.

How I view the 3 CPF Life Plans:

Those with extreme fear and greed will opt for Escalating Plan because it is designed to "cater" to inflation by giving u an annual payout which increase by 2% each year (your extreme fear of inflation). Because u think it will increase by 2% pa forever, you will ultimately be getting more mthly payout than any other plans, thus u will make more money from your CPF Life premium if u survive long enough (extreme greed) compared to other plans.

If u defer your payout start age to 70, you will be getting more mthly payout (extreme greed), so u hope to make more money faster. Another category is those who might plan to give up their PR status, so deferring till 70, they make the most from CPF, and quite without joining CPF Life before they turn 70 - extreme greed!

Those with some fear and greed will opt for Standard Plan because it has the highest mthly payout.

Those who hope to lose less money from this scheme will opt for Basic Plan and start at age 65. I am in this category.

I am also in the Basic, starts at 65 years old camp.

 

[iMac]

U hope that u die early?

I thought CPF Life will paid you for life? If I can start collecting at 55, I would do so....

 

[Mecisteus]

I am going repeat what I wrote many times in other CPF Life related threads:

Insurance plays with your greed and fear, your psychology.

How I view the 3 CPF Life Plans:

Those with extreme fear and greed will opt for Escalating Plan because it is designed to "cater" to inflation by giving u an annual payout which increase by 2% each year (your extreme fear of inflation). Because u think it will increase by 2% pa forever, you will ultimately be getting more mthly payout than any other plans, thus u will make more money from your CPF Life premium if u survive long enough (extreme greed) compared to other plans.

If u defer your payout start age to 70, you will be getting more mthly payout (extreme greed), so u hope to make more money faster. Another category is those who might plan to give up their PR status, so deferring till 70, they make the most from CPF, and quite without joining CPF Life before they turn 70 - extreme greed!

Those with some fear and greed will opt for Standard Plan because it has the highest mthly payout.

Those who hope to lose less money from this scheme will opt for Basic Plan and start at age 65. I am in this category.

I think we should have some sticky posts like these for everyone to read.

Especially on the calculations.

Good summary anyway.

 

[Toni90]

According to latest scientific research:

All downhill from here: Has the human race peaked?
December 11th, 2017

Every four years, the world turns its attention to the Olympics to see competitors go "faster, higher, stronger." We tend to take this trajectory for granted, and average human height and life expectancy have played along by increasing significantly over the past two centuries. But the human body obviously has biological limits. A review of 120 years of historical records now suggests those limits may have already been reached – and if we aren't careful things could start going backwards.

.................................

The researchers say that instead of the tallest humans getting taller, the fastest getting faster and the longest-living getting older, the best we can hope for is an increase in the proportion of the population reaching the existing limits for these traits. As a result, there would be more and more people living to the current highest life expectancy (around 85 to 95 years, with 115 to 125 years the limit for maximum longevity) and growing to maximum current heights (about 200 cm/6.5 ft), while fewer and fewer sporting records would be broken.


there is a human biological limits, hence most people will die between 85 to 95 years old even in the future (because human life span just cannot keep increasing forever!), so you dream that you can live till 122 years old like what BBCW claimed 20 years from now?!

U stupid or what? the report said more and more people will live longer, higher chance to live until 115-125.

 

[Toni90]

I thought CPF Life will paid you for life? If I can start collecting at 55, I would do so....

Yeah. But choose basic then have to die early to save money. Not sure why people who have quite a lot of money somehow fear of losing money until believing that they will die early.

 

[ocs_woodlands]

the best choice to make is by looking at your parents.

you are the sum of your parents genes + some environmental factors.

once you know what disease/illness they have and what age they pass on, you can approx gauge your own mortality too (maybe add 2/3 years for medical advancement).

with a hunch of your own mortality, you can make a better choice wrt CPF Life...

this obviously won't apply for those whose parents pass on due to accidents or falls....

 

[kehyi4]

Consider your grandparents longevity +medical history also. Plus your uncles and aunts. Larger data set will be more useful

Sent from null using GAGT

 

[JuniorLion]

U stupid or what? the report said more and more people will live longer, higher chance to live until 115-125.

Let's see how many people will live till 125 in the next few decades then.

 

[henrylbh]

In 2015, there were about 1,100 above age 1,100. Even with the increase to come in decades, I guess less than 1% will make it pass 100.

 

[THEMIKOS]

Confused here. I always thought CPF Life pays u until u die. Just dependant on the plan (for how much payout i wanna receive UNTIL I DIE)

So if i choose basic i receive $xx until i die be it at 70 or 125 years old.

If i choose FRS, i get $xx + a little bit more until i die be it at 79 or 125 years old.

Am i right? Because these recent posts seem to suggest otherwise.

Even if life expectancy has increased markedly, the age of onset of most health problems has not increased markedly, so more people will suffer longer in old age (which they hope they would have die earlier rather than later)!

 

[dork32]

Confused here. I always thought CPF Life pays u until u die. Just dependant on the plan (for how much payout i wanna receive UNTIL I DIE)

So if i choose basic i receive $xx until i die be it at 70 or 125 years old.

If i choose FRS, i get $xx + a little bit more until i die be it at 79 or 125 years old.

Am i right? Because these recent posts seem to suggest otherwise.

you are right that cpf pays till you die, regardless of age.

one important point that you are missing is the amount your kids get when you die

 

[JuniorLion]

In 2015, there were about 1,100 above age 1,100. Even with the increase to come in decades, I guess less than 1% will make it pass 100.

I don't even think I can make it past 90.

 

[iMac]

you are right that cpf pays till you die, regardless of age.

one important point that you are missing is the amount your kids get when you die

You are right, as parent we are always thinking for our kids.

When I reached 75yr old. My kids will be in their late 40 or 50....

Likely they can take care of themselves without relying on what I will be leaving behind...

 

[dork32]

You are right, as parent we are always thinking for our kids.

When I reached 75yr old. My kids will be in their late 40 or 50....

Likely they can take care of themselves without relying on what I will be leaving behind...

my mom is in her 70s. i can see that she rather leave her money to me rather than other strangers.

i can well support myself now. in fact, i have much more than what she is going to leave for me.

 

[dork32]

Confused here. I always thought CPF Life pays u until u die. Just dependant on the plan (for how much payout i wanna receive UNTIL I DIE)

So if i choose basic i receive $xx until i die be it at 70 or 125 years old.

If i choose FRS, i get $xx + a little bit more until i die be it at 79 or 125 years old.

Am i right? Because these recent posts seem to suggest otherwise.

you wrong in the frs and basic are not mutually exclusive

 

[ELKYme]

Yes Bro, don’t worry, you are right. Whichever plan you choose, THE MONTHLY PAYOUTS WILL BE PAID TILL DEATH.
This is possible because a portion of RA goes into a life pool (individuals who die early stand to lose and those who live long benefit).

So which plan to choose?

1) Standard Plan
For a person who believes that he or she can live beyond age 85, the Standard Plan will give a better return.

2) Basic Plan
Basic Plan gives highest return for a person who passes away before 85 years old.

3) Escalating Plan
Returns from Escalating Plan is the lowest unless the person can live beyond age 95.
The Escalating Plan will be better only for people who are not disciplined to save, as there will be more payout in the future.

Source:
https://www.drwealth.com/cpf-life/

Within is an useful comparison chart showing the percentages of returns at different ages calculated using Internal Rate of Return.

In summary, as NOBODY knows exactly when we will die, the debate about which plan is “better” will never end because the “best” plan for each individual will be the one that we correctly GUESS our death age.

The best we can all do is to make an educated GUESS based on statistics as well as our own circumstances such as present health, lifestyle, heredity.
https://www.singstat.gov.sg/find-da...ulation/death-and-life-expectancy/latest-data

Confused here. I always thought CPF Life pays u until u die. Just dependant on the plan (for how much payout i wanna receive UNTIL I DIE)

So if i choose basic i receive $xx until i die be it at 70 or 125 years old.

If i choose FRS, i get $xx + a little bit more until i die be it at 79 or 125 years old.

Am i right? Because these recent posts seem to suggest otherwise.

 

[dork32]

In summary, as NOBODY knows exactly when we will die, the debate about which plan is “better” will never end because the “best” plan for each individual will be the one that we correctly GUESS our death age.

The best we can all do is to make an educated GUESS based on statistics as well as our own circumstances such as present health, lifestyle, heredity.
https://www.singstat.gov.sg/find-da...ulation/death-and-life-expectancy/latest-data

well-said. a very balance statement. no right or wrong answer. you choose what is best for you.

not like what some smart alex claim

 

[starlight318]

May I know if the amount of payouts that will be paid for life will be decided upon age 55 or 65? And amount will be fixed for life right? (unless u choose escalating plan)

 

[BBCWatcher]

Those with extreme fear and greed will opt for Escalating Plan....

WTF? This post is gibberish.

I have absolutely no problem with those of you who want to leave the biggest, fattest bequests to your loved ones — or, better yet, lifetime gifts. That’s the opposite of “greed,” and at least for gift giving also the opposite of “fear.” It just so happens that CPF LIFE is a lousy bequest vehicle. It’s just not designed to get the job done.

The only help CPF LIFE can provide is to help defend a particular bequest from other assets (or, better yet, lifetime gifts). It provides the maximum help in doing so if you defer to age 70, increase to ERS level, and choose the Escalating Plan — assuming you are in average or better health when you make your payout decision.

That’s just fact. If your goal is to come as close as possible to guaranteeing a particular bequest (or, better yet, particular lifetime gifts), that’s the BEST play available with CPF LIFE, with the key assumption of average or better health. (And excluding Bill Gates level wealth/$10 bequest scenarios. This is a lower, middle, and upper middle class calculus.)

CPF LIFE does not guarantee any bequest. Just live long enough, and the bequest is $0. Once payouts start — and they start earlier if you start at age 65 — if there is a bequest it is always falling, every month, in nominal terms (and even faster in real terms due to inflation). Every CPF LIFE payout plan shares these bequest characteristics. It is not whole life insurance, and it is not designed to be whole life insurance.

This same formula (age 70 payout start, ERS level, Escalating Plan) also, not coincidentally, provides the highest assurance that you will never be a financial burden on your loved ones. That’s the opposite of “greed,” too.