CPF after 55

[homedriver]

Understand after 55, certain money will be transferred to new RA account.
Two point want to clarify:
1. The money transferred to RA account will not earn any interest. So basically if count from 55 to 65, we are losing the 10 years interest. Correct?
2. After passed away, the remain will be transferred to beneficiary. This assume the money remain is not exceed the money initially deposit. Correct?
For easy illustration:
If I transferred 100k to RA account. And after 65, if I’m collect 1k per month for 5 years. Total will be 60k. And if I passed away, my beneficiary will get the remaining 40k?

 

[limster]

1. The money transferred to RA account will not earn any interest. So basically if count from 55 to 65, we are losing the 10 years interest. Correct?

provide link to the CPF website that says this please

 

[pchan2018]

Please chk these link.. .

https://www.cpf.gov.sg/Assets/members/Documents/CPF_Retirement_Planning_Booklet.pdf
for your second question, you may want to email cpf for that..

 

[CrashWire]

2. After passed away, the remain will be transferred to beneficiary. This assume the money remain is not exceed the money initially deposit. Correct?

All your CPF money is by default paid out in cash to your beneficiary when you die: https://www.cpf.gov.sg/member/account-services/account-closure/paying-out-cpf-when-you-pass-away

 

[andyhtc]

1. The money transferred to RA account will not earn any interest. So basically if count from 55 to 65, we are losing the 10 years interest. Correct?

Interest Rate for Retirement Account​

Interest rate from 1 January 2021 to 31 December 2021: 4% per annum

The interest rate is computed based on the weighted average interest rate of the entire invested portfolio. New savings credited to RA each year earn the 12-month average yield of 10YSGS plus 1%4 computed for the year, subject to the current floor interest rate of 4% per annum3. The interest rate is reviewed annually.

https://www.cpf.gov.sg/Members/AboutUs/about-us-info/cpf-interest-rates
2. After passed away, the remain will be transferred to beneficiary. This assume the money remain is not exceed the money initially deposit. Correct?

How CPF savings are distributed

The deceased had made a valid CPF nomination

CPF savings will be distributed to the nominee(s). If you’re a nominee, we’ll contact you within 15 working days from notification of the member’s demise. You can then apply to make a withdrawal from the deceased’s CPF account and receive his/her CPF savings in cash or GIRO.

https://www.cpf.gov.sg/member/account-services/account-closure/paying-out-cpf-when-you-pass-away

 

[andyhtc]

Since RA is created at 55 years old, technically RA will start earning interest from day 1 of creation. Using the CPF Life Estimator, if you key in age 55 years old (i.e. year of birth 1966) and $100,000, at 65 years old the amount in the RA will become $155,000. Hence, this shows that RA will earn a substantial interest from age 55 until the CPF member passes away.

https://www.cpf.gov.sg/eSvc/Web/Schemes/LifeEstimator/LifeEstimator

 

[Value.Matrix]

Understand after 55, certain money will be transferred to new RA account.
Two point want to clarify:
1. The money transferred to RA account will not earn any interest. So basically if count from 55 to 65, we are losing the 10 years interest. Correct?
2. After passed away, the remain will be transferred to beneficiary. This assume the money remain is not exceed the money initially deposit. Correct?
For easy illustration:
If I transferred 100k to RA account. And after 65, if I’m collect 1k per month for 5 years. Total will be 60k. And if I passed away, my beneficiary will get the remaining 40k?

Can I check which CPF life plan you are on.

There are a selected number of people who had to choose their CPF Life plan at age 55 instead of 65. So those people are the ones affected by what you mentioned as (1) which is losing 10 years of interest. Those who did not have to choose (current batch now just turning 55) you are not affected.

(2) The amount will not exceed the amount that you put into cpf life premium.
E.g you used 100k to buy CPF life. Under Standard Plan. That 100k does not earn interest the moment its in CPF Life.
E.g you chose basic plan, 20k in CPF life will not earn interest. The 80k in RA will continue to earn interest and capital gets drawn down. Beneficiary gets the remaining in RA (including interest earned in RA) + 20k cpf life if its not drawn down yet.

 

[Andrew833]

Understand after 55, certain money will be transferred to new RA account.
Two point want to clarify:
1. The money transferred to RA account will not earn any interest. So basically if count from 55 to 65, we are losing the 10 years interest. Correct?
2. After passed away, the remain will be transferred to beneficiary. This assume the money remain is not exceed the money initially deposit. Correct?
For easy illustration:
If I transferred 100k to RA account. And after 65, if I’m collect 1k per month for 5 years. Total will be 60k. And if I passed away, my beneficiary will get the remaining 40k?

What CPF Life plan you choose and at what age you (pass away), the result will be different.

 

[homedriver]

Thank you for all your comments.

I think I’m confused between RA and CPF Life plan : (

So let me rephrase see my understanding is correct now. When I’m reach 55, a Retirement Account (RA) is created. Savings from Special Account and Ordinary Account, up to the Full Retirement Sum (FRS), will be transferred to my RA to form my retirement sum. So we can’t touch the RA amount anymore after set aside and the full RA amount will be used to purchase the CPF life plan.
For example, 55, 200k is transfer to RA account. By 65, the amount become 240k included to interest earned for the passed 10 years. Then the 240k will be used to purchase the CPF life plan. If my payout is 2k per month, 1 year is 24k. After 5 years I’m passed away, my total payout is 120k. My beneficiary will get the remaining 120k. Correct?

So should be the amount in the CPF life plan will not gain me any interest. This mean only for people can live longer is worth to placed more money in the RA account. And it seems wiser to keep the money in the SA account since still generate interest even after I’m 65?

 

[Andrew833]

Thank you for all your comments.

I think I’m confused between RA and CPF Life plan : (

So let me rephrase see my understanding is correct now. When I’m reach 55, a Retirement Account (RA) is created. Savings from Special Account and Ordinary Account, up to the Full Retirement Sum (FRS), will be transferred to my RA to form my retirement sum. So we can’t touch the RA amount anymore after set aside and the full RA amount will be used to purchase the CPF life plan.
For example, 55, 200k is transfer to RA account. By 65, the amount become 240k included to interest earned for the passed 10 years. Then the 240k will be used to purchase the CPF life plan. If my payout is 2k per month, 1 year is 24k. After 5 years I’m passed away, my total payout is 120k. My beneficiary will get the remaining 120k. Correct?

So should be the amount in the CPF life plan will not gain me any interest. This mean only for people can live longer is worth to placed more money in the RA account. And it seems wiser to keep the money in the SA account since still generate interest even after I’m 65?

Try this
https://www.google.com.sg/url?sa=t&...ifeestimator&usg=AOvVaw0U_gGBTWoNnxA6O2o3ENaR

 

[hwmook]

Thank you for all your comments.

I think I’m confused between RA and CPF Life plan : (

So let me rephrase see my understanding is correct now. When I’m reach 55, a Retirement Account (RA) is created. Savings from Special Account and Ordinary Account, up to the Full Retirement Sum (FRS), will be transferred to my RA to form my retirement sum. So we can’t touch the RA amount anymore after set aside and the full RA amount will be used to purchase the CPF life plan.
For example, 55, 200k is transfer to RA account. By 65, the amount become 240k included to interest earned for the passed 10 years. Then the 240k will be used to purchase the CPF life plan. If my payout is 2k per month, 1 year is 24k. After 5 years I’m passed away, my total payout is 120k. My beneficiary will get the remaining 120k. Correct?

So should be the amount in the CPF life plan will not gain me any interest. This mean only for people can live longer is worth to placed more money in the RA account. And it seems wiser to keep the money in the SA account since still generate interest even after I’m 65?

All money regardless of in RA or CPF life earn interest. In CPF life, you will be paying a portion of your money into a common pool to pay out those that live longer than average. You can't choose whether to keep in RA or CPF life so I don't know why you ask.

 

[LoUsyGamER]

You could contact cpf from your cpf account so got black and white from cpf.

 

[iMac]

Try this
https://www.google.com.sg/url?sa=t&...ifeestimator&usg=AOvVaw0U_gGBTWoNnxA6O2o3ENaR

Hi Andrew,

This link you provided is really very confusing.

"a cup of coffee which cost $0.90 20 years ago is now priced 33% higher at about $1.20."

Option 1: I want to maintain my current lifestyle and do not want to buy less in the future.

Option 2: I can adjust my lifestyle and buy less in the future.

Option 3: I can adjust my lifestyle further and buy even lesser with progressively lower payouts later on.



Am I right why the 3x options mean...


Option 1: I still want to drink my coffee in future?

Option 2: I will drink lesser coffee in future?

Option 3: I can drink even lesser coffee in future?

 

[zoneguard]

Option 1: I want to maintain my current lifestyle and do not want to buy less in the future.

Option 2: I can adjust my lifestyle and buy less in the future.

Option 3: I can adjust my lifestyle further and buy even lesser with progressively lower payouts later on.

https://forums.hardwarezone.com.sg/threads/new-cpf-life-estimator.6547267/
Now they add the cup of coffee example to try to explain but doesn't take away the fact it is still a regression as the details to decide are still missing:

Option 1: Escalating LIFE plan
Option 2: Standard LIFE plan
Option 3: Basic LIFE plan

 

[ablurcat]

[url=https://postimg.cc/RN21jfFf] [/URL]

Interest will be earned but your beneficiaries will not get it.

 

[andyhtc]

Thank you for all your comments.

I think I’m confused between RA and CPF Life plan : (

So let me rephrase see my understanding is correct now. When I’m reach 55, a Retirement Account (RA) is created. Savings from Special Account and Ordinary Account, up to the Full Retirement Sum (FRS), will be transferred to my RA to form my retirement sum. So we can’t touch the RA amount anymore after set aside and the full RA amount will be used to purchase the CPF life plan.
For example, 55, 200k is transfer to RA account. By 65, the amount become 240k included to interest earned for the passed 10 years. Then the 240k will be used to purchase the CPF life plan. If my payout is 2k per month, 1 year is 24k. After 5 years I’m passed away, my total payout is 120k. My beneficiary will get the remaining 120k. Correct?

So should be the amount in the CPF life plan will not gain me any interest. This mean only for people can live longer is worth to placed more money in the RA account. And it seems wiser to keep the money in the SA account since still generate interest even after I’m 65?

In the previous version of the CPF estimator, the graphs show a breakeven age around 85(?) depending on the payout option. Beyond that age in that option, the CPF member has a net gain from the pool.

The interest earned on the RA should re-appear partially as a higher monthly payout. So it does not disappear completely into the pool. However, if the ageing population increases and more live longer than the breakeven age, I guess the higher monthly payout will be lowered to subsidise the payout to these very old CPF members. This could be the reason why the payout is depicted as a small range in the estimator.

Q	Can I withdraw the interest earned in my Retirement account?

A	The interest earned in your Retirement Account (RA) will form part of your RA savings for your monthly payouts when you reach your payout eligibility age.

https://www.cpf.gov.sg/members/FAQ/...ent Sum Scheme&folderid=12527&ajfaqid=2188520

 

[homedriver]

[url=https://postimg.cc/RN21jfFf] [/URL]

Interest will be earned but your beneficiaries will not get it.

Yes, that is what I understand. The money in the CPF life is no longer earn the interest. Basically, we are withdraw the money from the premium in our personal pool. And the remaining will be pass to our beneficiary.
So does it mean we should keep more money in the SA which still earn us interest after 65? The CPF life is more worth for those live longer which after personal pools is dry then the common pool will kick in.

 

[celtosaxon]

The 4% interest earned in your RA prior to CPF LIFE gets credited to your RA. Therefore, in the example given, if you have $200k at 55, the balance should be around $296k at age 65 at a 4% CAGR. You can postpone CPF LIFE all the way to age 70, in which case you would continue to earn 4% in your RA for 5 more years.

Once CPF LIFE is activated, and assuming you choose the Standard or Escalating plan, all of the interest earned from that point onwards is used to pay for a longevity insurance premium — this ensures you don’t outlive the payments.

The monthly payments are deducted from the principle, which becomes completely depleted after around 15 years. Once you run out of money, there won’t be any more bequest… but your payments will still continue (because the longevity insurance you paid for earlier, now kicks in).

So interest is always earned, but with CPF LIFE it goes to pay for your longevity insurance premiums. That gives you the security of guaranteed payments over your entire lifetime, even if you become a centenarian.

 

[proton_cannon]

CPF Life premium do earn interest, but the interest will be makan by CPF and not pass to your beneficiaries if one passed away early.

https://www.cpf.gov.sg/members/abou... Monthly Payouts&folderid=19774&faqid=6791249

 

[Value.Matrix]

CPF Life premium do earn interest, but the interest will be makan by CPF and not pass to your beneficiaries if one passed away early.

https://www.cpf.gov.sg/members/abou... Monthly Payouts&folderid=19774&faqid=6791249

You cannot say makan away. CPF will say you are fake news lol.

The correct term is interest goes to the pool and paid out as monthly. Your dependents beneficiary's does not get it haha.

Technically it is wrong, as you can receive the interest and more IF you live much longer like 100 years old. Else you still get the premiums without interest.

Same same wording, but the meaning is different (though my thoughts is the same as you)