CPF after 55

[vsvs24]

Some clarification from the above findings, let's say the person has 40k in RA, you receive the monthly payout, does the 4% interest gets paid out?

Or like how it is discovered, it'll still be drawn down on the 40k up til 80 years old, any interest is only 'distributed' if you live beyond that

So far most people talking about CPF life. Note that if you have less than $60,000, you have option not to join CPF life.

https://www.cpf.gov.sg/member/retirement-income/monthly-payouts/non-cpf-life
Not saying joining or not joining CPFlife is better. Just saying you have an option. You have to work it out yourself based on your needs.

 

[dork32]

Not saying joining or not joining CPFlife is better. Just saying you have an option. You have to work it out yourself based on your needs.

wonderful, this is exactly what i felt all along. there is no right or wrong answer.

 

[dork32]

This is quite important finding you have found, did you write in officially to CPF for an answer using the example numbers you input in?

Read so many post, some readers seem to think the monthly payout already include your principal + interest and NOT like you say draw down principal finish then draw down the interest no more draw other ppl interest.

actually a lot of people here already know this. people like bbc, henry..... all the old birds. knowing is one thing, analyzing is another.
what you are hearing is the version that is skewed towards my choice: cpf life basic. if you hear from bbc, his analysis is skewed towards standard and escaling.

 

[aeng]

It is definitely not 0% interest, as when I keyed in 0% into my Excel, I got a much lower payout from CPF Life Estimator

For reference, if you key in FRS at age 55 into the CPF Estimator, you can see the balance inside at age 65 equals about 4% interest per year, and that is the money already in the CPF Life that belongs to you.

I'm quite lost at the great discussion above as CPF is a very complicated and obscured system. Hence, I'm starting fresh using my Excel to figure out how it works.

you're a bit off here.

from age 55 till 65-70 (depending on when you start payouts), the money you have is in your own RA, earning 4%.
Only at age 65 then the money is put into CPF LIFE and you start drawing out from that RA amount accumulated from 55-65.

 

[sohguanh]

actually a lot of people here already know this. people like bbc, henry..... all the old birds. knowing is one thing, analyzing is another.
what you are hearing is the version that is skewed towards my choice: cpf life basic. if you hear from bbc, his analysis is skewed towards standard and escaling.

The problem with bbc is he is so super long winded, perhaps he is a US angmo? So long until you read finish the long paragraph you lost track the gist of it. I prefer easier point form format since I am a software developer or maybe English is not our native language so we take sometime to understand. That is for me not sure about other readers though.

 

[sohguanh]

you're a bit off here.

from age 55 till 65-70 (depending on when you start payouts), the money you have is in your own RA, earning 4%.
Only at age 65 then the money is put into CPF LIFE and you start drawing out from that RA amount accumulated from 55-65.

Ok can I put in point form format from what I understand from your post?

1. Age 55-65 or 70 RA with the FRS will earn 4% = X
2 At age 65 or 70, above step 1 X (which include 4% interest) we draw the monthly payout

My question is at Step 2 the X will continue to earn say Y (interest), this Y will not form part of the monthly payout ?

 

[henrylbh]

henry will say my dad lived to 91, my aunt lived to 99, many of my relatives. i have good genes, i have tonic, i excercise, i sure outlive them.

Why fond of mentioning me? Want to follow me?

Despite the longevity of my elders, I will go for basic plan

Like my elders who have no tonic and exercise, I also the same, but I smoke, sleep irregular hours, have supper at nites (with hash brown and sometimes chu bee png and anything deemed unhealthy) and have kopi ka tai like 5x a day, and use to add more oil, soya source and chilli to my porridge or chee cheong fun and food like that. I also use salted butter to fried stuff or add more salt on my hash brown, fries and burgers. For bread, I just go for the cheapest white bread and add thicker layer of salted butter or peanut butter My siblings said I siao with all unhealthy food. Previously, I used to drink pepsi every day and magi noodle with oil added. Now lesser top hair I used to store whole carton of pepsi and magic noodles. Only I don't and can't drink. I got drunk twice in one nite when I was in the liquor industry. And I don't gamble except for stocks and shares. Generally I feel blessed though I am not religious at all. My only regular exercise is on bed

 

[henrylbh]

Ok can I put in point form format from what I understand from your post?

1. Age 55-65 or 70 RA with the FRS will earn 4% = X
2 At age 65 or 70, above step 1 X (which include 4% interest) we draw the monthly payout

My question is at Step 2 the X will continue to earn say Y (interest), this Y will not form part of the monthly payout ?

RA with FRS will grow at prevailing 4% plus extra interest of 1% on first $30k and and additional 1% on next $30k.

At age 65 or 70 the whole RA will move to CPFL for standard or escalating plan and you get fixed (for the time being) payout for the rest of your life. Simi interest you dreaming of Just hope that you will live beyond 90. If you live to about 80, you will lose big time.

 

[henrylbh]

The problem with bbc is he is so super long winded, perhaps he is a US angmo? So long until you read finish the long paragraph you lost track the gist of it. I prefer easier point form format since I am a software developer or maybe English is not our native language so we take sometime to understand. That is for me not sure about other readers though.

It has been like that. American style? You hear those advertisements or presentations by American salesmen in media? I hear or read and switch off not long after, not matter how good the product or service

 

[henrylbh]

actually a lot of people here already know this. people like bbc, henry..... all the old birds. knowing is one thing, analyzing is another.
what you are hearing is the version that is skewed towards my choice: cpf life basic. if you hear from bbc, his analysis is skewed towards standard and escaling.

Note angmo got shorter life span than Singaporeans and still majority of us will live around 85 and lose abit in CPFL to feed those hard to die

 

[sohguanh]

Note angmo got shorter life span than Singaporeans and still majority of us will live around 85 and lose abit in CPFL to feed those hard to die

You see Japanese live long life and all short short one can see from WW2 Jap soldiers but I have yet to find a scientific study that says short people live longer life. Maybe it is a urban myth.

 

[iMac]

not a bad video but there is one point that i do not like. it say it is free money when you principal runs out. i disagree. it is free money only when the principal and interest runs out

Agreed....the "free money" is actually our Interest-Earned.

Should not be called "free money"

 

[8zaoyu]

Whether it was the RSS or CPFL, the gov does not pump in money when CPF is exhausted. There is also no gov guarantee that CPFL will not be insolvent. Under RSS, members takes care himself individually but with CPFL, members takes care of themselves collectively. On balance, CPFL is better for society, though it appears to be a violation of individual's right

If members in a cohort are living longer than expected, the payouts got to revise downwards to take into account the balance in the pool. That why the gov got to monitor it annually so that payouts will be revised downwards or upwards gradually according to the balance in the pool. Otherwise it may be insolvent or left with money in the pool that is not exhausted. Whether there is cross subsidy between different cohorts, God knows

Although i like yr pt, the average balance does not look into longevity by gender and races?

 

[jayjayltd]

If compare between money to remain in SA vs money put into RA, it's more worth to remain in RA.

But if you do CPF shielding, then you are comparing the money in OA vs RA.
in this case, I rather transfer more from OA into RA.

Money in OA cannot be withdrawn until all your SA are withdrawn.

 

[8zaoyu]

Hi, been reading in this forum for while now. Have decided to share some information on cpf life that applies to my parents and in laws.

All 4 of them have started cpf life standard plan. The payout is almost exactly or above the estimator.

For example, one of the cpf life premium is about 124k. The payout of $680 started this month. By the time that person is 81 years old, the cpf life premium would be exhausted and start drawing from the pool.

The same applies for the rest, their cpf life premium will be used up by the time they are about 80 to 81 years old.

One of them have been drawing for a few years and have since switched from basic to standard plan this year. The yearly variation was not a lot. Eg.
2019: 780.84
2020: 779.15
2021: 781.67

As children, we do not care about bequest. We just want them to live a fulfilling retirement Iife.

If they live long enough, by the time they pass away, we would have also retired or even would not be around to enjoy their bequest. But I guess the money can still be passed to grandchildren.

We have also wrote in to cpf to check if 1) starting the payout at 70 or
2) starting the payout at 65, then putting in the money back into RA till age 70 is better.

Interestingly, option 2 is better. Eg. Leave till 70, payout increase from 680 to 780. But if start payout at 65 and put just 630 monthly for 5 years, it will still reach 780 and we get to keep 50 bucks each month for 5 years. And we get tax relief too. So it's win-win for us.

But they have decided to not continue with option 2 as they need the money now.

In the meantime, we will try to increase their cpf life premium as and when we have extra money or bonuses. It is just in case they really live for very long and have exhausted their own savings. At least a decent amount is still streaming out of cpf life and we do not need to greatly increase our contributions to them by then.

This is a real life admission of the payouts from BAsic Plan or CpF Life payouts from their Minimum Sums of those born before 1957(age 65 and older) usually under ($139k for the borns in 1958, can draw down next year) The choice is theirs to draw down on Minimum Sum Scheme OR LIfetime payment scheme. IF the males married or remarried late and have young foreign wives not working with young children, probably will take the Minimum Sum Scheme(if have) They won't read this forum discussion too. Here in forum, we compare how much interests we get in January, how fast and when to top up to get tax reliefs, etc. We have the figures of how much we will be getting made known, some fools will still overspend and loudest to get ALL out (after 65) and boast their kids earning over 10k a month (threaten children support scheme) but if children gone bankrupt, threaten Social Welfare Scheme. Their drama in the News rather than the Forum here

 

[Value.Matrix]

i will tell you why you are so wrong.

you used the wrong example to compare with. you used home loan. it home loan, it is not important to differentiate interest and principal. the bank is just interested in the total amount you owed to them. whether it is (interest 100k principal 400k) or (interest 300k principal 200k), to the bank it is just you owe them 500k.

in cpf life standard, it is very different. principal is your money, interest is not. when you die, you get back your principal, you do not get back the interest. hence it is very important to differentiate principal and interest. cpf is smart, they make you draw down the principal first so that they can pay you less if you die. it is only when your principal is depleted that you draw on interest. and when your interest runs out, you draw other people's interest.

anyway, people like freedom will always feel that he is right.

vsvs has admited his mistake. i have admitted mine. no one can be forever correct.

You said the most important stuff over here.

CPFLife draws down your principal first, then interest from the pool. This is the reason why I also say no interest.

And your bequest is 0. CPF has effectively tried to hide this information (make it harder to draw this conclusion).

But you put it in the way its super clear. Nobody refute this.

 

[andyhtc]

It is not. You're just not smart if you use life expectancy at birth — that's just foolish. Secondary school students are not receiving CPF LIFE payous. You should be using life expectancy at CPF LIFE entry age, with an estimate of mortality improvement.

It is a bit hard to get the data for life expectancy at CPF LIFE entry age, so I just use the most easily available data

As the BRS, FRS and ERS increase, the 4% interest rate on the RA can get very significant. One will really lose big time if one dies before age 80 (for standard plan) and if the top-up is done after age 65

I need to re-evaluate based on my and my close relatives' health condition whether to go for ERS and standard plan when I'm near retirement age.

 

[andyhtc]

you're a bit off here.

from age 55 till 65-70 (depending on when you start payouts), the money you have is in your own RA, earning 4%.
Only at age 65 then the money is put into CPF LIFE and you start drawing out from that RA amount accumulated from 55-65.

That was my early stage of digging into the mechanism of CPF Life payout for the standard plan. My thoughts are much clearer now for this plan. When I'm free over CNY I will delve into the basic and escalating plans.

 

[andyhtc]

While on this topic, I look at the rate of ageing in the 85 and over age group of Singapore citizens to get a sense of whether CPF Life payout can be maintained if lifespan increases. An interesting finding came out:

From 2010 to 2020, the number increase of this group consistently goes up, reaching 4,273, 5,113 and 5,424 in 2018, 2019 and 2020 respectively.

However, in 2021, the increase drops sharply to 3,534. I suspect this is due to Covid-19 and if that is the case, the actual reported deaths from Covid-19 may not be accurate at all

 

[vsvs24]

While on this topic, I look at the rate of ageing in the 85 and over age group of Singapore citizens to get a sense of whether CPF Life payout can be maintained if lifespan increases. An interesting finding came out:

From 2010 to 2020, the number increase of this group consistently goes up, reaching 4,273, 5,113 and 5,424 in 2018, 2019 and 2020 respectively.

However, in 2021, the increase drops sharply to 3,534. I suspect this is due to Covid-19 and if that is the case, the actual reported deaths from Covid-19 may not be accurate at all

Where do you get these numbers ?