CPF Easy Info Thread. :)

[maple96]

For the 20% that goes into the pool -

You sure it's not lost at any time?

You sure it's just not earning interest?

this one I can answer, 100% (capital) not lost cos u can account for it. CPF will have to answer for it

 

[maple96]

bbc says we should not seek to maximize yield. i beg to differ.

To maximize yield to me means recover as much as possible, not 100%. I dun agree with him because he wants 100% then later change his mind or no change I dunno and dun wish to know

To some extent I think u are talking about 100%?

It is similar to minmise loss = not 100%.

(from a personal financial management view )

 

[lifeafter41]

actually you raised a very valid point.

bbc says we should not seek to maximize yield. i beg to differ.

first is this, the 20% is not lost. it is just not earning interest.

i assume that your calculations are correct.
176k in ra at 55 will result in 215k in basic and 53k in pool. 215k earns 4% interest. 53k earns nothing

176k in investment will result in 226k in amp ra. 226k earns 4%

diff in principal is 37k. diff in interest earning amount is 11k

it will take your 11k, 30years to hit 37k at 4%

if you start doing this at 65, you will need till 95 then you can catch up. you may want to forget the idea. however your investment can get a higher return eg 3%, then it may turn the tables over.

for your case bbc is right. it is just that he did not back up is suggestion by numbers

Thanks dork.
One more question, what if the amount is 264k or ERS in RA at age 55, what will the numbers be?

Still need to hit 3% yields and above to turn the table.

I am also for maximizing yield, if given a choice.
Just that am lousy with numbers......lol

 

[henrylbh]

i assume that your calculations are correct.
176k in ra at 55 will result in 215k in basic and 53k in pool. 215k earns 4% interest. 53k earns nothing

You fake answer on interest?

Q Will my savings used to join CPF LIFE (i.e annuity premiums) continue to earn interest?
A Your savings used to join CPF LIFE (i.e. annuity premiums) will continue to earn interest like your Retirement Account (RA) savings, which is currently at 4% per year. The interest earned on the annuity premiums will be paid to the Lifelong Income Fund and pooled together with the interest of all CPF LIFE participants. The interest will be paid to you as part of your monthly payouts for as long as you live.

You need to live long enough (above 90) to get back the interest lost and the premiums paid.

Q Where will the extra interest be paid to after I join CPF LIFE?
A If you have chosen the CPF LIFE Basic Plan, we will pay the extra interest earned into your Retirement Account and pay it to you in the year it is earned as part of your monthly CPF LIFE payouts. Your monthly CPF LIFE payouts will not be level throughout as they will reduce gradually when your combined balances fall below $60,000. This is due to less extra interest earned.

Unlike above, you get consolation.

 

[henrylbh]

this one I can answer, 100% (capital) not lost cos u can account for it. CPF will have to answer for it

Yes confirm that one will get back no less than 100% at any time but still lose if one doesn't live long enough.

 

[lifeafter41]

You fake answer on interest?

Q Will my savings used to join CPF LIFE (i.e annuity premiums) continue to earn interest?
A Your savings used to join CPF LIFE (i.e. annuity premiums) will continue to earn interest like your Retirement Account (RA) savings, which is currently at 4% per year. The interest earned on the annuity premiums will be paid to the Lifelong Income Fund and pooled together with the interest of all CPF LIFE participants. The interest will be paid to you as part of your monthly payouts for as long as you live.

You need to live long enough (above 90) to get back the interest lost and the premiums paid.

Q Where will the extra interest be paid to after I join CPF LIFE?
A If you have chosen the CPF LIFE Basic Plan, we will pay the extra interest earned into your Retirement Account and pay it to you in the year it is earned as part of your monthly CPF LIFE payouts. Your monthly CPF LIFE payouts will not be level throughout as they will reduce gradually when your combined balances fall below $60,000. This is due to less extra interest earned.

Unlike above, you get consolation.

Hi Henry, thanks for this clarification.
Assuming at 176k at 55
Assuming at 263k at 65
Choose basic at 65, 20% of 263k or 52.6k goes into pool.
4% of 52.6k or 2.1k is pay into RA

Question, what will happen to the 52.6k, if one pass away.

 

[woof]

Yes, you're allowed to top up to the ERS as soon as your Retirement Account is formed on your 55th birthday then top up to the new (higher) ERS when it's increased every January and for the rest of your life. The ERS limit is only based on principal, not interest.

Thanks - I didn’t know that - I assumed that this would have been like CPF-SA where we can’t top up any more after we achieve the cap. I’ll try doing a top up in 2 months’ time then (Jan 2020).

 

[dork32]

Hi Henry, thanks for this clarification.
Assuming at 176k at 55
Assuming at 263k at 65
Choose basic at 65, 20% of 263k or 52.6k goes into pool.
4% of 52.6k or 2.1k is pay into RA

Question, what will happen to the 52.6k, if one pass away.

there is small amount of 1+1 interest that you will get. this is common whether you are on frs ers or brs. this is assume that you do not deplete your oa during this period. ignoring the extra interest is perfectly fine.

Henry is wrong this time.

 

[dork32]

Thanks dork.
One more question, what if the amount is 264k or ERS in RA at age 55, what will the numbers be?

Still need to hit 3% yields and above to turn the table.

I am also for maximizing yield, if given a choice.
Just that am lousy with numbers......lol

actually my consideration is at ers already.

both ers or brs will have brs in the ra. we have conveniently ignored this amount since it is common. it is this 176k that we have flexibility.

if you have chosen brs, this 176 will be in your investment at 2,5%
if you have chosen ers, this 176 will be in ra earning 4%

noticed i totally ignored the extra 1+1 interest. this is also common in both cases which will be earned by the first 88k.

 

[dork32]

You fake answer on interest?

Q Will my savings used to join CPF LIFE (i.e annuity premiums) continue to earn interest?
A Your savings used to join CPF LIFE (i.e. annuity premiums) will continue to earn interest like your Retirement Account (RA) savings, which is currently at 4% per year. The interest earned on the annuity premiums will be paid to the Lifelong Income Fund and pooled together with the interest of all CPF LIFE participants. The interest will be paid to you as part of your monthly payouts for as long as you live.

You need to live long enough (above 90) to get back the interest lost and the premiums paid.

Q Where will the extra interest be paid to after I join CPF LIFE?
A If you have chosen the CPF LIFE Basic Plan, we will pay the extra interest earned into your Retirement Account and pay it to you in the year it is earned as part of your monthly CPF LIFE payouts. Your monthly CPF LIFE payouts will not be level throughout as they will reduce gradually when your combined balances fall below $60,000. This is due to less extra interest earned.

Unlike above, you get consolation.

combined balance means i do not need my ra to earn this interest. it can be earned via oa sa or ma

 

[henrylbh]

]there is small amount of 1+1 interest that you will get[/I]. this is common whether you are on frs ers or brs. this is assume that you do not deplete your oa during this period. ignoring the extra interest is perfectly fine.

Henry is wrong this time.

You now contradicting yourself?

I have not said anything. And you said I am wrong? Tell me what did I say. I forgetful

Earlier, I merely question 'first is this, the 20% is not lost. it is just not earning interest'

Now you are adding 'this is assume that you do not deplete your oa during this period' Care to explain how is that relevant.

 

[henrylbh]

combined balance means i do not need my ra to earn this interest. it can be earned via oa sa or ma

When you have BRS/FRS/ERS and money in annuity, combined balance is remotely relevant.

 

[dork32]

For the 20% that goes into the pool -

You sure it's not lost at any time?

You sure it's just not earning interest?

you read the words in the cpf life website.

the same exact words were used for the 20% and that of cpf life standard. if 20% is gone, then all the money in cpf life standard is gone.


When you join the CPF LIFE Standard Plan, we will deduct all the savings in your Retirement Account as the annuity premium at the point of policy issuance. The premiums deducted will be paid into the Lifelong Income Fund.

When you join the CPF LIFE Basic Plan, a portion of your Retirement Account (RA) savings will be deducted for the annuity premium. This can range from 10% to 20%, from age 65 to 70. The actual percentage will depend on your age and gender. We will inform you on the amount deducted when your policy is issued. The premium deducted will be paid into the Lifelong Income Fund. The rest of your RA savings will stay in your RA. Both your premium and RA savings will continue to earn interest which will be paid to Lifelong Income Fund and RA respectively.

 

[dork32]

You now contradicting yourself?

I have not said anything. And you said I am wrong? Tell me what did I say. I forgetful

Earlier, I merely question 'first is this, the 20% is not lost. it is just not earning interest'

Now you are adding 'this is assume that you do not deplete your oa during this period' Care to explain how is that relevant.

yes it is not lost. it is not earning interest. this is confirmed.

the 20% is earning interest for the pool. if you feel that the pool is yours, you can join that group of people.

it is quite obvious lifeafter 2.5% could be the oa account. so i am not wrong in assuming that.

and if you have 88k in your ra. you do not need the 20% to earn the 1+1 for you. so i am right

 

[dork32]

When you have BRS/FRS/ERS and money in annuity, combined balance is remotely relevant.

if the combine balance is remotely relevant, it just means that i am going to get that 1+1 regardless what happens.

it means that the 20% does not contribute to my interest. it means that the 20% is contribute interest to the pool, which many of us feels that it is not ours.

 

[dork32]

You now contradicting yourself?

I have not said anything. And you said I am wrong? Tell me what did I say. I forgetful

Earlier, I merely question 'first is this, the 20% is not lost. it is just not earning interest'

Now you are adding 'this is assume that you do not deplete your oa during this period' Care to explain how is that relevant.

interpret it anyway you want. to me and many others here, it is still not earning interest.

 

[dork32]

You sure it's not lost at any time?

let me remind you again. yes it is not lost.

 

[dork32]

You sure it's just not earning interest?

yes it is not earning interest.

 

[dork32]

You now contradicting yourself?

I have not said anything. And you said I am wrong? Tell me what did I say. I forgetful

by saying "are you sure", you are implicating that the sentence is wrong and your stand is on the other side. and again yes you are wrong

 

[dork32]

Hi Henry, thanks for this clarification.
Assuming at 176k at 55
Assuming at 263k at 65
Choose basic at 65, 20% of 263k or 52.6k goes into pool.
4% of 52.6k or 2.1k is pay into RA

Question, what will happen to the 52.6k, if one pass away.

52.6k earns 4% for the pool.
the rest earns interest for your ra

52.6k goes to your kids if you die early. if you die 90++, you would have drawn away the 52.6k yourself.