CPF Accounts Value thread

[dork32]

1. Escalating plan is just too expensive
I was very excited when they first announced the escalating plan. I often felt (and still do) that there isn't enough attention given to the erosion of inflation. We have been living in a period of extremely low inflation, and this could change soon.
Escalating is based on the Standard plan. If you compare the 2 plans, with a DCF analysis, the break even age is 90+! We can do much better on our own but it does need discipline.

another example of good posting.
escalating plan good because 2% increase.
escalating plan bad because 90+ then breakeven.

we decide whether we want it.

 

[kehyi4]

Post 55, the CPF allocation rates look like this hor:

 

[dork32]

2. Defer option
More precisely the opt-out option (the default option is withdrawal at 70). They claimed that for every year of deferment, you will get upto 7% more. When I input my numbers, the increment came up to just 5.7% if i defer from 65 to 66. Again not very impressive especially from a DCF perspective.

So I am now on the ERS, 65 and Basic plan. In order protect ourselves from inflation, we can contribute part of our CPFLife as top up into our RA (up to the prevailing ERS). This excess amount can be used to buy more CPFlife (up to age 80), or just be taken out as part of the AMP (Additional Monthly Payment), which will be paid out till 90.

just consider this.

you chose ers because you want a larger payout. deferring the withdrawal does precisely that. you got 1 mil in your oa, you can depend on this instead of the cpflife payout. you seriously do not need it.
i agree that 5.7% is not impressive, but it does not affect you. coz you dont really need the money. a lower payout would mean more in the ra rolling on the 4%.

 

[Mecisteus]

I used to share the same plan (ie ERS, Defer and escalating). Now my current plan is just one of the 3 (ie ERS, withdraw at 65, Basic). Let me elaborate.

1. Escalating plan is just too expensive
I was very excited when they first announced the escalating plan. I often felt (and still do) that there isn't enough attention given to the erosion of inflation. We have been living in a period of extremely low inflation, and this could change soon.
Escalating is based on the Standard plan. If you compare the 2 plans, with a DCF analysis, the break even age is 90+! We can do much better on our own but it does need discipline.

2. Defer option
More precisely the opt-out option (the default option is withdrawal at 70). They claimed that for every year of deferment, you will get upto 7% more. When I input my numbers, the increment came up to just 5.7% if i defer from 65 to 66. Again not very impressive especially from a DCF perspective.

So I am now on the ERS, 65 and Basic plan. In order protect ourselves from inflation, we can contribute part of our CPFLife as top up into our RA (up to the prevailing ERS). This excess amount can be used to buy more CPFlife (up to age 80), or just be taken out as part of the AMP (Additional Monthly Payment), which will be paid out till 90.

1) I mean if I am your level. ie quite well to do and maybe in top 5% of the population, I don't mind paying a little bit more insurance for a peace of mind, while not taking any chance and follow BBC ultra conservative approach of choosing ERS, defer and escalating plan for my CPF Life. After all, this cost of insurance is probably very minimal compared to my overall wealth.

2) But I guess you know what you are choosing and doing. Then that is good.

3) I know what is DCF. What is the discount rate that you use?

 

[SKenny]

1) I mean if I am your level. ie quite well to do and maybe in top 5% of the population, I don't mind paying a little bit more insurance for a peace of mind, while not taking any chance and follow BBC ultra conservative approach of choosing ERS, defer and escalating plan for my CPF Life. After all, this cost of insurance is probably very minimal compared to my overall wealth.

2) But I guess you know what you are choosing and doing. Then that is good.

3) I know what is DCF. What is the discount rate that you use?

Affordability in one thing but I hate to pay more than necessary. I don't mind paying more, if it is value-for-money.

I used a 2% rate in my DCF analysis.

 

[JetStorm]

I used to share the same plan (ie ERS, Defer and escalating). Now my current plan is just one of the 3 (ie ERS, withdraw at 65, Basic). Let me elaborate.

1. Escalating plan is just too expensive
I was very excited when they first announced the escalating plan. I often felt (and still do) that there isn't enough attention given to the erosion of inflation. We have been living in a period of extremely low inflation, and this could change soon.
Escalating is based on the Standard plan. If you compare the 2 plans, with a DCF analysis, the break even age is 90+! We can do much better on our own but it does need discipline.

2. Defer option
More precisely the opt-out option (the default option is withdrawal at 70). They claimed that for every year of deferment, you will get upto 7% more. When I input my numbers, the increment came up to just 5.7% if i defer from 65 to 66. Again not very impressive especially from a DCF perspective. To be fair, it is not bad either.

So I am now on the ERS, 65 and Basic plan. In order protect ourselves from inflation, we can contribute part of our CPFLife as top up into our RA (up to the prevailing ERS). This excess amount can be used to buy more CPFlife (up to age 80), or just be taken out as part of the AMP (Additional Monthly Payment), which will be paid out till 90.

Pardon my ignorance but what do u mean by u are on ers, 65, basic plan? i was reading up on the cpf website and we can only choose basic standard or enhanced.

Am i missing something here?

Sent from Samsung SM-G950F using GAGT

 

[SKenny]

just consider this.

you chose ers because you want a larger payout. deferring the withdrawal does precisely that. you got 1 mil in your oa, you can depend on this instead of the cpflife payout. you seriously do not need it.
i agree that 5.7% is not impressive, but it does not affect you. coz you dont really need the money. a lower payout would mean more in the ra rolling on the 4%.

Thanks for the comment.

I see CPFLife as my final safety net, if all else failed. Hence I chose ERS (for both my wife and I). So if the mother-of-all-sh!t hit the fan, we do not need to sleep on the street.

I agree that deferment has a similar effect as choosing ERS. However it is an expensive option to add onto CPFLife, hence my earlier comment. As I posted earlier, I just hate to pay more than necessary (old habit). There is also the question of our view on our own longevity.

Post 65, my plan is to inject part of the CPFLife payout back into RA as top up. This way I get to enjoy the 4% without the long 90+ years breakeven age. I believe this is a more cost effective option for me.

FYI, I think that the 2.5% in the OA is already a very good deal (for now). Far better than any FD or even SSB (at least to me)

 

[SKenny]

Pardon my ignorance but what do u mean by u are on ers, 65, basic plan? i was reading up on the cpf website and we can only choose basic standard or enhanced.

Am i missing something here?

Sent from Samsung SM-G950F using GAGT

My plan is to;
- Top up to the ERS limit in my RA
- Opt for the Basic plan in CPFLife
- Start CPFLife at 65 years old.

 

[alt2015]

Thanks for the comment.

I see CPFLife as my final safety net, if all else failed. Hence I chose ERS (for both my wife and I). So if the mother-of-all-sh!t hit the fan, we do not need to sleep on the street.

I agree that deferment has a similar effect as choosing ERS. However it is an expensive option to add onto CPFLife, hence my earlier comment. As I posted earlier, I just hate to pay more than necessary (old habit). There is also the question of our view on our own longevity.

Post 65, my plan is to inject part of the CPFLife payout back into RA as top up. This way I get to enjoy the 4% without the long 90+ years breakeven age. I believe this is a more cost effective option for me.

FYI, I think that the 2.5% in the OA is already a very good deal (for now). Far better than any FD or even SSB (at least to me)

Post 65, my plan is to inject part of the CPFLife payout back into RA as top up. This way I get to enjoy the 4% without the long 90+ years breakeven age. I believe this is a more cost effective option for me.
Post 65 TOP up to eArn 4%. This Amt can draw out?

 

[henrylbh]

That’s cluster is rather old. But it’s plus point is it’s recent HIP. Will probably walk to MRT if staying around that cluster.

Your Reno is not bad too.

320 to 340k sound like a fair range. Beyond 350k will depend on your luck?

You did not sign any exclusive with agent? Standard 1% comm?

Walking to mrt/interchange make more sense - about 8 minutes walk.

Reno was done by previous owner. According to agent, valuer matched the selling price of 353k

Sale was open to all agents at standard rate of commission.

Very glad it's sold within a month as option was exercised last Sat and buyer and seller have submitted resale application the same day.

Net gain for slightly more than a year's holding? Almost 11%

 

[SKenny]

Post 65, my plan is to inject part of the CPFLife payout back into RA as top up. This way I get to enjoy the 4% without the long 90+ years breakeven age. I believe this is a more cost effective option for me.
Post 65 TOP up to eArn 4%. This Amt can draw out?

Post 65 TOP up to eArn 4%. This Amt can draw out?

Post 65, you can continue to top up your RA to the prevailing ERS (current rate of increase is $7.5k per year).

These top-ups can be used to increase your CPFLife. Alternatively it will get return back to you as Additional Monthly Payment (AMP), which continue till you are 90 years old. In other words, the AMP amount depends on the top-up amt, the prevailing interest rate, and the years remaining till you are 90.

You are not allowed to withdraw the topup amt as a lumpsum.

 

[SKenny]

top up to ERS after 55.
When will happen to the surplus amt in RA after net off for basic cpf life?

Are you referring to BRS?

If you are still on ERS and eth CPFLife Basic plan, then there will not be any surplus. You can only top up to the prevailing ERS limit.

If you are referring to the interest earned in RA, then all interest earned stay in RA and cannot be withdraw.

 

[angtc11]

I used to share the same plan (ie ERS, Defer and escalating). Now my current plan is just one of the 3 (ie ERS, withdraw at 65, Basic). Let me elaborate.

1. Escalating plan is just too expensive
I was very excited when they first announced the escalating plan. I often felt (and still do) that there isn't enough attention given to the erosion of inflation. We have been living in a period of extremely low inflation, and this could change soon.
Escalating is based on the Standard plan. If you compare the 2 plans, with a DCF analysis, the break even age is 90+! We can do much better on our own but it does need discipline.

2. Defer option
More precisely the opt-out option (the default option is withdrawal at 70). They claimed that for every year of deferment, you will get upto 7% more. When I input my numbers, the increment came up to just 5.7% if i defer from 65 to 66. Again not very impressive especially from a DCF perspective. To be fair, it is not bad either.

So I am now on the ERS, 65 and Basic plan. In order protect ourselves from inflation, we can contribute part of our CPFLife as top up into our RA (up to the prevailing ERS). This excess amount can be used to buy more CPFlife (up to age 80), or just be taken out as part of the AMP (Additional Monthly Payment), which will be paid out till 90.

Totally agree with you on the selection of 65 and basic, however I was inclined to BRS.

Can you elaborate on the choice of ERS over FRS and BRS? Eg:You have done market survey and the incremental premium is value for money for the increased monthly payout (since the premium and payout proportion is not linear across BRS FRS ERS)

Edit:saw your post on ERS as final safety net, but I think the question still stands as you can purchase a private annuity to make up for the difference in payout.

 

[SKenny]

Totally agree with you on the selection of 65 and basic, however I was inclined to BRS.

Can you elaborate on the choice of ERS over FRS and BRS? Eg:You have done market survey and the incremental premium is value for money for the increased monthly payout (since the premium and payout proportion is not linear across BRS FRS ERS)

Edit:saw your post on ERS as final safety net, but I think the question still stands as you can purchase a private annuity to make up for the difference in payout.

CPFLife is the most cost effective annuity out there, including the portion from BRS to ERS. So if you want a life annuity plan, then CPFLife is a very good option.

For people who opt for BRS in order to limit their exposure to CPF, then I am not sure that it does. A corresponding value in their property in held-in-lieu of the amount that was withdrawn. In other words, your exposure to CPF remains unchanged. However if they want have more cash to spend at an earlier age, then it is a different story.

In most cases, by itself BRS would not be able to offer you enough money to live on. Even FRS offers "mere existence" cost of living in Singapore. ERS would make the retirement much more comfortable, hence it is my choice for my "final safety net".

 

[alt2015]

Post 65 TOP up to eArn 4%. This Amt can draw out?

Post 65, you can continue to top up your RA to the prevailing ERS (current rate of increase is $7.5k per year).

These top-ups can be used to increase your CPFLife. Alternatively it will get return back to you as Additional Monthly Payment (AMP), which continue till you are 90 years old. In other words, the AMP amount depends on the top-up amt, the prevailing interest rate, and the years remaining till you are 90.

You are not allowed to withdraw the topup amt as a lumpsum.

I can choose to use the post 65 TOP up to increase cpf life or as AMP? And AMP will be based on TOP up/yrs to 90. Then this AMP is Lille to be very small Amt?

 

[SKenny]

I can choose to use the post 65 TOP up to increase cpf life or as AMP? And AMP will be based on TOP up/yrs to 90. Then this AMP is Lille to be very small Amt?

AMP will depends on your top-up amount, which in turn in limit by the prevailing ERS.

It can be very small or very large depending on your headroom in your RA (ie balance vs prevailing ERS).

Please note that current ERS increases by $7.5k per year for now.

 

[blue_line]

How do I choose between addition CPF Life payout of increased AMP? What's the pros and cons if someone can explain?

 

[JuniorLion]

How do I choose between addition CPF Life payout of increased AMP? What's the pros and cons if someone can explain?

AMP is up to 90.

CPF Life payout is for life.

Which do you think will be higher?

 

[Mecisteus]

CPF Top-up at 79 years old, an actual case

https://www.ifa.sg/cpf-top-79-years-old/

 

[SBC]

Walking to mrt/interchange make more sense - about 8 minutes walk.

Reno was done by previous owner. According to agent, valuer matched the selling price of 353k

Sale was open to all agents at standard rate of commission.

Very glad it's sold within a month as option was exercised last Sat and buyer and seller have submitted resale application the same day.

Net gain for slightly more than a year's holding? Almost 11%

Not bad a deal for you. Made > 50k?

Collected how many years of rental?