CPF after 55

[vsvs24]

Anyone knows how often CPF review the CPF life payout amounts ?

Eg if I use CPF life estimator to check payout now, will it show a different estimated payout when I check back say 3 years later ?

Just tried the CPF life estimator. After it calculates, there is a footnote that shows :

• Payouts are based on the current CPF interest rates.
• CPF LIFE monthly payout may be adjusted every year to take into account factors such as interest rates and mortality experience.
• This tool is for illustrative purposes only and actual results may vary.

So looks like review is yearly.

I will take screenshots every year from now till 65 to see if it changes .

 

[vsvs24]

Do you have any evidence supporting your assertion?

Personally I would be very happy if your assertion were true, specifically if the CPF Board would raise the maximum age of payout start above age 70.

No please....

All the more determined not to topup RA. Who knows what policy change may happen.

Money you cannot touch is not your money

 

[BBCWatcher]

All the more determined not to topup RA. Who knows what policy change may happen.

That's correct. You also don't know, as a few examples in no particular order:

1. What Singapore's future tax rates will be.
2. What Singapore's future taxable income types will be.
3. What the real value of Singapore dollars will be in the future.
4. What other CPF rules will change.
5. What HDB rules will change.
6. What URA rules will change.
7. What Singapore's future immigration policies and rules will be.

You can assign whatever hopefully reasonable weights and probabilities you want to these various hypotheticals and others, but a rational person would not limit his/her imagination only to CPF Retirement Accounts.

Money you cannot touch is not your money

Thus you keep all or most of your wealth in the form of freeze dried food buckets stored in a spare bedroom. Because those banks, insurance companies, and government agencies are all completely untrustworthy, amirite?

 

[BBCWatcher]

By the way vsvs24, you didn't answer the question that at least two of us have: what evidence do you have that the CPF Board is going to raise the minimum CPF LIFE payout age from 65 to 70? That's your assertion. What's your source?

 

[vsvs24]

By the way vsvs24, you didn't answer the question that at least two of us have: what evidence do you have that the CPF Board is going to raise the minimum CPF LIFE payout age from 65 to 70? That's your assertion. What's your source?

That statement not made by me lei. I also asking.

 

[Andrew833]

Noted.

Btw, how do you know CPF payout start shifting to 70 soon ? Did not see anything on this.

Do you have any evidence supporting your assertion?

Personally I would be very happy if your assertion were true, specifically if the CPF Board would raise the maximum age of payout start above age 70.

Previously we can withdraw all our money at 55, later RA change to 65, later RA change to opt for 70. So who know what will be the next changes.

 

[vsvs24]

Previously we can withdraw all our money at 55, later RA change to 65, later RA change to opt for 70. So who know what will be the next changes.

Oh. Don't think they will do this soon. Big backlash previously when they did not communicate properly and people misunderstood that push back to 70.

 

[Andrew833]

Oh. Don't think they will do this soon. Big backlash previously when they did not communicate properly and people misunderstood that push back to 70.

Those are old days, RSS (previous of RA), people forget to withdraw so default to age 70.
Now RA is different because of CPF Life.
I mean may push to 70 then payout, we don't know yet but from the way the govt doing, soon there will be changes. Just like retire age.

"Stipulating that the Minister for Manpower can prescribe a Retirement Age and Re-Employment Age of up to 65 and 70 respectively, in line with the recommendations made by the Tripartite Workgroup on Older Workers in 2019. The Retirement Age and Re-Employment age will be raised to 63 and 68 respectively on 1 July 2022.1 Nov 2021"

 

[BBCWatcher]

Previously we can withdraw all our money at 55, later RA change to 65, later RA change to opt for 70. So who know what will be the next changes.

OK, so you don't have any evidence for your assertion. Good to know, thanks.

"Previously" was before 1987. The Minimum Sum was introduced then, about 35 years ago.

 

[dork32]

Up to 20% inclusive of the up to $5,000 withdrawal available from age 55. Possibly more with a property pledge/charge in place.

If you're withdrawing any dollars from your CPF Retirement Account at age 65 in a lump sum you're most probably doing it because you're gasping for air, financially speaking. Oversimplifying only slightly, you're basically broke. And if that's the case you'd probably choose the CPF LIFE Standard Plan and pray for low inflation for your remaining days on Planet Earth. The Standard Plan offers the highest CPF LIFE monthly payout at payout start, and it's permanently higher than the CPF LIFE Basic Plan's monthly payout.

It would not be a good situation, though -- not the situation you would aspire to be in.

again like what i have previously mentioned one solution cpf life standard.

so why dont you put out the advantages of cpf life basic to our friend? if it is such a hopeless plan, then shouldnt we sack our garmen for coming out with it.

the correct way to do thing is tell people wat the advantages of basic have over standard. let the individual decisde which is best for them

me and many people in in money mind would rather opt for cpf life basic.

 

[dork32]

Interest doesn't suddenly stop when you enter CPF LIFE. Your CPF LIFE monthly payouts are computed based on full interest computation. If interest did hypothetically stop your CPF LIFE monthly payout would be a lot lower no matter what payout plan you choose.

correct interest does not stop. your money in cpf life continues to earn interest. this is interest goes to the pool and not you. this is for standard and escalating

if the interest does not come into my account, i take it as it is not earning interest. this is the reason why i will not choose standard

who cares if our nations salary grew by 6% last year. i am interested in is how much my own salary grows.

 

[dork32]

That's correct, although you are allowed to plow dollars back into a CPF Retirement Account up to the current Enhanced Retirement Sum (based on principal only).

you sure this can be done after payout starts?

and even if it can be done after there is one big problem

i am quoting the example on cpf life basic.

lets say the payout is 2k and you want to put all your 2k back into cpf life.

by proportion 10-20% will go to the lala account that earns interest for the common good but not you. but you are withdrawing from the ra which is earning interest.

in time to come, your ra will hit 0 and your lala account will have a lot of money.

in sa, there is no lala account, every bit of your sa is earning 4%.

 

[item2sell]

OK, so you don't have any evidence for your assertion. Good to know, thanks.

"Previously" was before 1987. The Minimum Sum was introduced then, about 35 years ago.

If you follow our reactive Gov to wait for evidence, it will be too late.

they are already trying to “convince” people to start withdrawing at 70. Sooner or later it will be 70. Just a matter of when.

 

[Okenba]

As cost of living rises, and people live longer, there are only so many things that CPF can do to ensure that the standard of living for retirees do not fall as they continue to age.

1) Increase FRS. So more money will go into RA to purchase higher payouts.
2) Increase payout age. So money in RA has longer time to compound before paying for the annuity.

Surely people understand that something has to give. Money is not magicked from thin air.

 

[BBCWatcher]

correct interest does not stop. your money in cpf life continues to earn interest. this is interest goes to the pool and not you. this is for standard and escalating

No, that's not correct. The interest is fully, individually computed as part of your individual life annuity claim on the CPF Lifelong Income Fund. Nobody else except CPF LIFE participants draw from the pool. Your monthly payout amount would be much lower without interest.

if the interest does not come into my account, i take it as it is not earning interest.

Then you would be wrong. The interest goes straight into boosting your monthly payout amount, and a higher monthly payout amount definitely counts.

you sure this can be done after payout starts?

Yes, absolutely sure. You can jam dollars into your CPF Retirement Account for the rest of your life if you wish, up to the current Enhanced Retirement Sum. Every time the ERS is raised you can jam more dollars in.

and even if it can be done after there is one big problem....

....And then you pretend interest doesn't exist when it (and principal) buys additional life annuity increments. That's just flat out wrong. It's as if you've never heard of pensions. Pensions are literally an 18th century invention!

 

[henrylbh]

Interest is always computed monthly and tracked for you (and your nominees). Interest accrues within your individual accounts and/or as part of your individual life annuity claim on the CPF Lifelong Income Fund.

Interest doesn't suddenly stop when you enter CPF LIFE. Your CPF LIFE monthly payouts are computed based on full interest computation. If interest did hypothetically stop your CPF LIFE monthly payout would be a lot lower no matter what payout plan you choose.

Where you get info that interest is always computed monthly and tracked for you ..... That's only true as long as money remains in RA.

Once money moved from RA to CPFL as annuity premium, you can forget about the interest on the premium. It not yours nor your beneficiary

You only start to recover the interest forgone after your monthly payouts exhaust the premium. And you have to live long enough to recover the interest lost or gain more than the interest lost. There must be losers and winners for this game to go on and on. So take your bet. You have no choice whatever CPFL plan you opt for

 

[BBCWatcher]

As cost of living rises, and people live longer, there are only so many things that CPF can do to ensure that the standard of living for retirees do not fall as they continue to age.
1) Increase FRS. So more money will go into RA to purchase higher payouts.
2) Increase payout age. So money in RA has longer time to compound before paying for the annuity.
Surely people understand that something has to give. Money is not magicked from thin air.

I broadly agree, but I can think of a couple more tweaks that'd help better combat elder destitution:

3) Allow two members (notably spouses) to pool their CPF Retirement Accounts into a single escalating joint/survivor (or joint/contingent) CPF LIFE monthly payout stream, ideally without any residual after both spouses die. I informally dub this the "CPF LIFE Partner Plan." A joint/survivor or (especially) joint/contingent life annuity is often substantially more efficient in providing lifestyle protection for a couple compared to trying to coordinate two completely separate life annuities (the status quo).

"Joint/survivor" means the payout amount doesn't vary after the first spouse dies. "Joint/contingent" means it varies, for example when both spouses are living the payout amount is $X and then when only the second spouse is living (the first has died) the payout amount is 75% of $X. ($X escalates.) The logic is that the deceased spouse doesn't need food, medical care, clothing, etc. so household expenses decrease somewhat. They don't fall by half, though, so 75% is in the ballpark.

4) Currently employers are allowed to make their payroll cycle transfers to the CPF Board a couple weeks after the end of the work month. Hypothetically the CPF Board could encourage employers to make their transfers more promptly, by the last day of the same calendar month, so that members start earning interest one month earlier.

 

[Andrew833]

"dork32 said:
if the interest does not come into my account, i take it as it is not earning interest."

Then you would be wrong. The interest goes straight into boosting your monthly payout amount, and a higher monthly payout amount definitely counts.

Do you have any support evidence/ document for this?
It's mean alot for people going to 55, kindly give correct information.

 

[BBCWatcher]

Where you get info that interest is always computed monthly and tracked for you ..... That's only true as long as money remains in RA.

No it's not, Henry. Life annuities count, too. When you add more dollars into a CPF Retirement Account, the monthly payout increases...inclusive of interest computation. That's all part of the equation. Different math, but interest is still in the math for YOU. The CPF Board knows exactly how much you put in, and when, and tracks it all.

The interest (and principal) buy the life annuity. More in means more out. If interest were not part of the equation then your monthly payout amount would be much lower.

Nobody has ever heard of a pension? Seriously? Come on, this is pretty ridiculous. Private or public pension, it doesn't really matter. Let's suppose it's a traditional private pension, you work for an employer for 30 years, and your employer contributes 5% of your salary into the pension fund. The pension fund earns interest (well, interest, dividends, and capital gains probably). Your monthly retirement payout is computed based on the principal you put in and the interest, dividends, and capital gains -- your pro rata share of all of that, with actuarial risk pooling. It doesn't particularly matter whether/how that computation is visible to your or not in a particular online Web page, but that's the computation.

I don't understand why this is so complicated for some of you to understand. This is ancient stuff, financially speaking.

 

[vsvs24]

I broadly agree, but I can think of a couple more tweaks that'd help better combat elder destitution:

3) Allow two members (notably spouses) to pool their CPF Retirement Accounts into a single escalating joint/survivor (or joint/contingent) CPF LIFE monthly payout stream, ideally without any residual after both spouses die. I informally dub this the "CPF LIFE Partner Plan." A joint/survivor or (especially) joint/contingent life annuity is often substantially more efficient in providing lifestyle protection for a couple compared to trying to coordinate two completely separate life annuities (the status quo).

"Joint/survivor" means the payout amount doesn't vary after the first spouse dies. "Joint/contingent" means it varies, for example when both spouses are living the payout amount is $X and then when only the second spouse is living (the first has died) the payout amount is 75% of $X. ($X escalates.) The logic is that the deceased spouse doesn't need food, medical care, clothing, etc. so household expenses decrease somewhat. They don't fall by half, though, so 75% is in the ballpark.

But this gets messy if there is divorce. Plus the deceased spouse may want to leave some or all CPF money to children and not all to the benefit of surviving spouse.

4) Currently employers are allowed to make their payroll cycle transfers to the CPF Board a couple weeks after the end of the work month. Hypothetically the CPF Board could encourage employers to make their transfers more promptly, by the last day of the same calendar month, so that members start earning interest one month earlier.

Employers need time to factor in resignations and no pay leave for the month.

Plus cashflow issue. Why would a company want to pay earlier.