CPF after 55

[dork32]

you can see all the contradiction in bbc's post.

i have only one goal, to maximize returns. i consider my family as one unit. maximize return for the familly as a unit

 

[sohguanh]

you want to help people there are other means, eg community chess.

as what amdk has said. cpf is not for helping people. if you want to help people use a scheme that is purely for helping people. if you live long enough, you will not be helping anyone.

you believe in this crap?

Community chess? Anyway I am saying ppl told me different perspective no right or wrong. You think it is crap then choose Basic. I am just sharing what others told me different perspective different decision.

Analogy. I think some faith is crap telling me listen to heavy metal music is unholy. Whole lotta BS so I ignore different perspective different decision no right or wrong.

 

[edmwing]

Personally I will go for BRS and maxed out at ERS, collect at 70yo onwards
(if there is still such a choice when I reach 65.. I understood that CPF is removing this soon). It's the most balanced choice in terms of risk/reward IMO amongst the options. I prefer to have most of the RA interest going back into my account than a pooled account. But I will encourage everyone else to go for Escalating or Standard to keep the pooled account as high as possible hahaha it might indirectly help with my monthly payout.

 

[dork32]

Personally I will go for BRS and maxed out at ERS, collect at 70yo onwards
(if there is still such a choice when I reach 65.. I understood that CPF is removing this soon). It's the most balanced choice in terms of risk/reward IMO amongst the options. I prefer to have most of the RA interest going back into my account than a pooled account. But I will encourage everyone else to go for Escalating or Standard to keep the pooled account as high as possible hahaha it might indirectly help with my monthly payout.

brs and ers are mutually exclusive

 

[Okenba]

Personally I will go for BRS and maxed out at ERS, collect at 70yo onwards
(if there is still such a choice when I reach 65.. I understood that CPF is removing this soon). It's the most balanced choice in terms of risk/reward IMO amongst the options. I prefer to have most of the RA interest going back into my account than a pooled account. But I will encourage everyone else to go for Escalating or Standard to keep the pooled account as high as possible hahaha it might indirectly help with my monthly payout.

I think you mean Basic plan at ERS.

 

[edmwing]

I think you mean Basic plan at ERS.

Yes I meant Basic Plan at ERS. Thanks for pointing out.

 

[twosix]

Basic plan with ERS, withdraw from 65. Already 65 imo quite old already. why wait till 70? withdraw earlier, can dote on ur grandchildren, and hope they'll love u more. if withdraw at 70, grandchildren grown up, dun care u cos' u never dote on them. haha.

 

[henrylbh]

I think you mean Basic plan at ERS.

BRS at ERS means what?

You end with more than FRS in CPFL when you withdraw RA with property charge. Is that you plan or want?

 

[culture_counter]

Sounds logical, 65 is not young...70 is very old already, then why wait till 70 to payout CPFLife annuity monthly?

 

[twosix]

Even if I have millions of dollars already, I will still withdraw my CPF Life at 65, which is the earliest. You never know when you will go. Might as well enjoy your hard earned money asap.

 

[item2sell]

Even if I have millions of dollars already, I will still withdraw my CPF Life at 65, which is the earliest. You never know when you will go. Might as well enjoy your hard earned money asap.

No one knows when another covid variant strikes. Don’t overplan like immortal

 

[BBCWatcher]

Basic plan with ERS, withdraw from 65. Already 65 imo quite old already. why wait till 70? withdraw earlier, can dote on ur grandchildren, and hope they'll love u more. if withdraw at 70, grandchildren grown up, dun care u cos' u never dote on them. haha.

Sounds logical, 65 is not young...70 is very old already, then why wait till 70 to payout CPFLife annuity monthly?

There are easy answers. CPF is paying a comparatively attractive interest rate. Why not let all your Retirement Account savings enjoy that attractive interest rate for 5 more years? (And top ups during those 5 years if you're doing that.) Also, relatedly, if you should happen to pass on within that 5 year period then the total cumulative payout to you and your CPF nominee(s) will be higher than if you start payouts before age 70.

Of course if you need the money before age 70, and if your CPF LIFE income stream is the next best choice for receiving income, OK, carry on.

Some older CPF members recently got upset when the CPF Board required them to start payouts from their CPF Retirement Accounts. They got upset for a very basic reason: they don't need the money yet, and their money is earning a terrific interest rate. It's really very simple.

 

[aeng]

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 ?

ths video should answer your question.



disclaimer: I am not connected to Providend in any way.

 

[andyhtc]

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

Below is the extract of the reply I got, which implies that the interest rate on RA/CPF Life premium is factored in the payout. However, it is not 100% of the 4% interest rate.

I think it is a reasonable mechanism to spread the cost of maintaining CPF payout to very old members with $0 in their balance.

The only way to gain financially from the system is to live longer than the rest

What happens to the interest earned on my CPF LIFE premium?​

You will benefit from the interest earned in two ways:

1. It is factored into your monthly payouts and you receive a higher payout from the start.
2. The interest accumulated on your CPF LIFE premium (and premiums of other CPF LIFE members) is what allows you to continue receiving payouts even after your CPF LIFE premium balance is depleted.

https://www.cpf.gov.sg/member/faq/r...my-cpf-life-premium-continue-to-earn-interest

 

[sohguanh]

Below is the extract of the reply I got, which implies that the interest rate on RA/CPF Life premium is factored in the payout. However, it is not 100% of the 4% interest rate.

I think it is a reasonable mechanism to spread the cost of maintaining CPF payout to very old members with $0 in their balance.

The only way to gain financially from the system is to live longer than the rest

What happens to the interest earned on my CPF LIFE premium?​

You will benefit from the interest earned in two ways:

1. It is factored into your monthly payouts and you receive a higher payout from the start.
2. The interest accumulated on your CPF LIFE premium (and premiums of other CPF LIFE members) is what allows you to continue receiving payouts even after your CPF LIFE premium balance is depleted.

https://www.cpf.gov.sg/member/faq/r...my-cpf-life-premium-continue-to-earn-interest

Thanks for sharing it clear up my suspicion earlier. Factored in can be less than 100% and the conclusion I get is same as yours. To "enjoy" the CPF Life scheme is please live longer life. But then usually good ppl die young so in order to live longer you must transform to do bad. Drama serial only one hero at last episode how you are so sure you can be that solo hero? It is much easier to be one of the villains in last episode though.

 

[andyhtc]

Thanks for sharing it clear up my suspicion earlier. Factored in can be less than 100% and the conclusion I get is same as yours. To "enjoy" the CPF Life scheme is please live longer life. But then usually good ppl die young so in order to live longer you must transform to do bad. Drama serial only one hero at last episode how you are so sure you can be that solo hero? It is much easier to be one of the villains in last episode though.

I estimated from my Excel and CPF Life Estimator that about 80% of 4% interest is paid out monthly, while 20% is retained for the standard plan, which is a reasonable premium.

The assumption is $0 bequest/balance at the age of 80. If this design constraint is relaxed, then the actual $0 bequest/balance age is about 87 based on the CPF Life Estimator payout. Hence, I believe my earlier calculations are consistent throughout and with CPF's reply.

I guess this settled once and for all on this issue and assures me that cash top-up to RA/CPF Life premium is still worthwhile especially if one is still very healthy at 70+.

 

[sohguanh]

I estimated from my Excel and CPF Life Estimator that about 80% of 4% interest is paid out monthly, while 20% is retained for the standard plan, which is a reasonable premium.

I guess this settled once and for all on this issue and assures me that cash top-up to RA/CPF Life premium is still worthwhile especially if one is still very healthy at 70+.

Someone told me CPF schemes always evolving so unless you are close to age 65 else don't fret too much over it. I get interested as CNY is lull period for my work. First I need to hit age 55 and the RA get created milestone.

 

[andyhtc]

Someone told me CPF schemes always evolving so unless you are close to age 65 else don't fret too much over it. I get interested as CNY is lull period for my work. First I need to hit age 55 and the RA get created milestone.

I'm very concerned now as I have been topping up my mother's CPF Life via cash. I don't want to pay for other's payout

 

[sohguanh]

I'm very concerned now as I have been topping up my mother's CPF Life via cash. I don't want to pay for other's payout

Oooh you should have shared this much earlier I see. Yes you got every right to be concerned haha. Actually why not just give the monies to her directly? It is becuz you want to enjoy the interest earned by the CPF Life scheme is it? Give direct no interest earned? But this approach you still give about 20% premium to others in exchange to get that interest. But I guess it is a trade-off.

 

[andyhtc]

I repeated some calculations for the basic plan. The bequest is set to $0 at the age of 91, which agrees with the 2021 chart before it disappeared from CPF website.

Due to the very low probability of someone living beyond 91 years old, you are essentially self-funding and reaping close to or at full 100% of the 4% interest rate.

The difference between 87 and 91 years old for standard and basic plan $0 bequest age is only 4 years. Hence, for those who think they cannot live beyond 87 years old and want to enjoy the 4% interest rate, one should choose the basic plan