CPF after 55

[andyhtc]

Where do you get these numbers ?

Department of Statistics.

I used by age group and the citizens rather than residents data.

https://tablebuilder.singstat.gov.sg/table/TS/M810671

 

[BBCWatcher]

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

Now you're being super weird. I provided the link, and you're citing SingStat either way. Just pick the correct number from the same report!

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 literally have no idea what you mean here, sorry.

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.

What's the next best alternative (NBA) you're considering?

 

[BBCWatcher]

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

Mechanically that's closer to what the CPF LIFE Basic Plan does. The Standard and Escalating Plans just draw dollars from the interest earning CPF Lifelong Income Fund.

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

All CPF LIFE payout plans feature zero residuals if you merely live long enough, and all have decreasing residuals once payouts start. The zero intercept age varies between plans, and of course the monthly payout amount varies. The Standard Plan's monthly payout amount is permanently higher than the Basic Plan's.

I wouldn't get too attached to the Basic Plan, by the way. It wouldn't shock me if the CPF Board gets rid of the Basic Plan in the name of simplicity. I can't think of a compelling public policy goal that the Basic Plan solves.

 

[andyhtc]

Now you're being super weird. I provided the link, and you're citing SingStat either way. Just pick the correct number from the same report!

I literally have no idea what you mean here, sorry.

What's the next best alternative (NBA) you're considering?

There is no need to be so serious

I come in for my coffee shop talk only...

 

[Value.Matrix]

Mechanically that's closer to what the CPF LIFE Basic Plan does. The Standard and Escalating Plans just draw dollars from the interest earning CPF Lifelong Income Fund.

All CPF LIFE payout plans feature zero residuals if you merely live long enough, and all have decreasing residuals once payouts start. The zero intercept age varies between plans, and of course the monthly payout amount varies. The Standard Plan's monthly payout amount is permanently higher than the Basic Plan's.

I wouldn't get too attached to the Basic Plan, by the way. It wouldn't shock me if the CPF Board gets rid of the Basic Plan in the name of simplicity. I can't think of a compelling public policy goal that the Basic Plan solves.

Mechanically, Basic plan Draws the interest first from your RA, then capital from RA, then capital from CPF Life premium, and finally the pool interest. Are you sure you understand the mathematics behind?

Standard Plan draws from CPF Life Premium first (which forms the bequest), then the pool interest (which is not in the bequest). For your full participation into CPf Life premium, of course you should get more in monthly payouts. Else NO ONE would take Standard at all.

For any investment, that's the same too, any residual can go to 0.

I also would not be surprised everyone will be forced into Standard/escalating Plan with lower payouts if there is not enough residual in CPF LIFE interest pool.

Not sure If you are trying to be funny by stating them, because you kept stating the pros and not the cons.

 

[BBCWatcher]

For any investment, that's the same too, any residual can go to 0.

Unless you have a reliable escalating life annuity in sufficient or better amount. Then all other wealth is instantly transferrable and bequeathable. I also illustrated upthread how you can self-convert the CPF LIFE Standard Plan to deliver a guaranteed residual -- and in fact an escalating residual starting by age 80 or less -- if you simply plow back all excess amounts above the CPF LIFE Basic Plan monthly payout into your CPF Retirement Account. So if you care about delivering a non-zero residual to a nominee, there you go, there's your answer.

Not sure If you are trying to be funny by stating them, because you kept stating the pros and not the cons.

Only one of us is fixated on the residual. But OK, if a non-zero residual is what you want to guarantee, no problem! Pick the CPF LIFE Standard Plan but consume only the CPF LIFE Basic Plan payout amount. Plow all dollars above the CPF LIFE Basic Plan payout amount back into your CPF Retirement Account. Mission accomplished.

 

[vsvs24]

if a non-zero residual is what you want to guarantee, no problem! Pick the CPF LIFE Standard Plan but consume only the CPF LIFE Basic Plan payout amount. Plow all dollars above the CPF LIFE Basic Plan payout amount back into your CPF Retirement Account. Mission accomplished.

If plow back (presumably by cash topup), will it remain in RA or will be added to CPF life premium ?

I saw this FAQ. Does it mean they will review yearly and transfer the topup to RA into CPF life premium ? If plow back money still ends up in CPF life premium then go back to square one.

****

I have started receiving my CPF LIFE payouts. Will inflows into my Retirement Account increase my monthly payout?​

You can get a higher lifelong monthly payout by applying to increase your CPF LIFE premium using the Retirement Account (RA) inflows.

However, if you choose to leave the inflows in your RA, we will increase your CPF LIFE premium automatically during our yearly review enabling you to receive higher CPF LIFE monthly payout for life.

https://www.cpf.gov.sg/member/faq/r...iving-my-cpf-life-payouts--will-inflows-into-

 

[iMac]

After reading thru last few pages, I now find I am more confused with CPF Policies.

 

[vsvs24]

After reading thru last few pages, I now find I am more confused with CPF Policies.

One step at a time. Cross 55 first. See what need to be done upto 55.

CPF Life only need to decide which plan and whether to start payout at 65.

 

[Value.Matrix]

Unless you have a reliable escalating life annuity in sufficient or better amount. Then all other wealth is instantly transferrable and bequeathable. I also illustrated upthread how you can self-convert the CPF LIFE Standard Plan to deliver a guaranteed residual -- and in fact an escalating residual starting by age 80 or less -- if you simply plow back all excess amounts above the CPF LIFE Basic Plan monthly payout into your CPF Retirement Account. So if you care about delivering a non-zero residual to a nominee, there you go, there's your answer.

Only one of us is fixated on the residual. But OK, if a non-zero residual is what you want to guarantee, no problem! Pick the CPF LIFE Standard Plan but consume only the CPF LIFE Basic Plan payout amount. Plow all dollars above the CPF LIFE Basic Plan payout amount back into your CPF Retirement Account. Mission accomplished.

Maybe because it's (the residual) conveniently missed out. Oh wait it is. And you conveniently did not reply on the mathematics.

And definitely you do not understand the mathematics behind it. Else why are you showing not much understanding behind what cpf has done. Especially suggesting the standard plan but as guaranteed. That itself is unable to get a 4%. Because any amount you put in will become part of the cpflife premium. Essentially it becomes a free capital (0 interest free) for cpf (and the top up does not go to RA because it automatically becomes cpf life premium).

Again, you show your lack of knowledge on what is considered and what is not for bequest.

 

[andyhtc]

Since I don't really need the CPF payout, my draft plan to maximise the bequest is:

1. Go for ERS and top up every year to the new ERS by cash.
2. Go for a Basic plan and extend the payout age to 70.
3. Re-invest some of the payouts to top-up the RA to the new ERS so that the payout is mostly from the 4% interest rather than on the premium.

Any comments, please?

I also have a question: why does the slider in CPF Life Estimator still allow a top-up by cash scenario? I thought there is a cap to ERS of that year.

Note: I find it hard to believe I am still digging out new information on CPF despite reading it up since 2 years+ ago

 

[demoforce1]

One step at a time. Cross 55 first. See what need to be done upto 55.

CPF Life only need to decide which plan and whether to start payout at 65.

any advice for people who have not crossed 55? I know about cpf shielding, which also may be stopped, anything else that I can prepare for better?

 

[BBCWatcher]

If plow back (presumably by cash topup), will it remain in RA or will be added to CPF life premium ?

Rolls into CPF LIFE. That's *good*. I'll repeat this basic fact: monthly payouts are computed inclusive of interest impacts.

Again, you show your lack of knowledge on what is considered and what is not for bequest.

More ad hominem invective.

 

[zoneguard]

Since I don't really need the CPF payout, my draft plan to maximise the bequest is:

Maximize bequest by going for max SA shielding (40K cannot be shielded) and OA shielding (20K cannot be shielded). Then your RA balance will be at 60K at 55.
Invest OA in something that returns more than 4% over the long term.

SA/OA/MA balances as bequest are better than CPF LIFE premium as bequest given that the interest on LIFE premium is contributed to the pool and interest for the SA/OA/MA are retained in their accounts after 55 if FRS was met.

Basic plan is superior to the other 2 LIFE plans for bequest because the excess RA after the 10-20% LIFE premium deduction retains the interest (and extra interest for the 60K) within RA.

Returning the excess payout between Standard plan to Basic plan back to RA will indeed boost the LIFE premium and for Standard plan, any unpaid premium forms the bequest but the retained RA interest from Basic plan makes it a better bequest vehicle against the other 2 plans.

 

[zoneguard]

any advice for people who have not crossed 55? I know about cpf shielding, which also may be stopped, anything else that I can prepare for better?

Hit FRS and BHS. Maximize any tax relief for CPF top-ups.

 

[andyhtc]

Rolls into CPF LIFE. That's *good*. I'll repeat this basic fact: monthly payouts are computed inclusive of interest impacts.

More ad hominem invective.

I have just written to CPF to ask whether the payout after 65 years old includes or excludes the interest on the RA to clear this once and for all

 

[andyhtc]

Maximize bequest by going for max SA shielding (40K cannot be shielded) and OA shielding (20K cannot be shielded). Then your RA balance will be at 60K at 55.
Invest OA in something that returns more than 4% over the long term.

SA/OA/MA balances as bequest are better than CPF LIFE premium as bequest given that the interest on LIFE premium is contributed to the pool and interest for the SA/OA/MA are retained in their accounts after 55 if FRS was met.

Basic plan is superior to the other 2 LIFE plans for bequest because the excess RA after the 10-20% LIFE premium deduction retains the interest (and extra interest for the 60K) within RA.

Returning the excess payout between Standard plan to Basic plan back to RA will indeed boost the LIFE premium and for Standard plan, any unpaid premium forms the bequest but the retained RA interest from Basic plan makes it a better bequest vehicle against the other 2 plans.

I don't think I can beat 4% return consistently as I'm not share/unit trust/ETF investment savvy. I may just use the shielding method for SA for a very short period.

Yes, I guess Basic plan is more suitable for me since most likely I will recycle into RA up to the ERS. I'm still quite a long way to retirement so I guess policies will change to force more members to subsidise those who live longer or who don't have sufficient CPF to contribute to the pool interest.

 

[henrylbh]

Mechanically, Basic plan Draws the interest first from your RA, then capital from RA, then capital from CPF Life premium, and finally the pool interest.

No more withdrawal of interest from SA/OA which will only be credited on 1 Jan the following year. Does it apply to RA?

 

[henrylbh]

I have just written to CPF to ask whether the payout after 65 years old includes or excludes the interest on the RA to clear this once and for all

Probably different rule for RA or else monthly payouts for those on RSS will be affected or shortened, more than those under CPFL BP.

 

[henrylbh]

I have just written to CPF to ask whether the payout after 65 years old includes or excludes the interest on the RA to clear this once and for all

If you have not send your mails, question CPF on reply received by vsvs24 -

As part of the Board’s ongoing efforts to ensure our administrative practices are aligned with the market practice, we have revised our practice such that only the savings in your CPF accounts can be withdrawn.​

What rubbish statement is that? Effort to squeeze further?

The Board has all along set their rules differently from the market. On the contrary, with the change, the Board is deviating further from market practice and make it worst for members. Before the change, members are already short changed in that deposit/withdrawal during the month earns no interest.

Market practice by all banks except POSB with passbook is to credit interest monthly and interest is based on daily rest and so issue of withdrawing principal or interest in the following month is non-existence.

The change will upset those who build up their OA/SA (especially those who make VC every year if not everyday) and plan to withdraw interest to fund their retirement before withdrawing the principal balance.