CPF Easy Info Thread. :)

[dork32]

I have done some numbers on these 2 options. I prefer the former; ie. ERS + 65 withdrawal + AMP.

The topup for the AMP can be funded with the CPFLife withdrawal if needed. Alternatively I can fund the topup with withdrawal from OA/SA. This way, I will build an escalating withdrawals which (on average) is cheaper than the Escalating option provide by CPF.

thank you kenny.

you are a wise guy (no pun). you have enough cash to fight inflation. i trust you know how to stretch your money.

 

[highsulphur]

So deposit into RA post 65 will earn 4% under the AMP?

 

[dork32]

Is CPF Life your high yield bequest vehicle or your Retirement Income Vehicle for Life?

wat many of us are suggesting points towards a high yield bequest vehicle.

by heading towards the bequest vehicle, we are heading towards a higher retirement income.

eg topping ers at 55 will give more to the kids when i die. topping up to ers will also increase my monthly payout.

going for amp will also do the same.

 

[romeo88]

Not completely following previous posts, but just to make sure you understand...

One cannot suka2 deposit into RA - you do that to RSTU to match up with the current cohort's BRS/FRS/ERS. Assuming the present BRS is 88k, and you've started LIFE, come next year, you can top up up to 7.5k (ERS) into your RA. Why RA is after LIFE has started, RSTU now goes to your RA. BRS presently is projected to increase 2.5k every subsequent cohort - this is playing catch up and may change later. However, RSTU before LIFE started is a different story.

So after LIFE started and you RSTU, your AMP increases. The formula to work out AMP is taking the balance of your present RA balance and do a PMT formula with FV at 90 equals zero. However, the AMP for after your RA has depleted (age 90) will go back to using the RA at the point when you entered LIFE. Above assuming Basic plan. For other plans - I don't care (sorry).

RA is earning 4% (assuming things stay the same by which time).

So deposit into RA post 65 will earn 4% under the AMP?

 

[maple96]

wat many of us are suggesting points towards a high yield bequest vehicle.

by heading towards the bequest vehicle, we are heading towards a higher retirement income.

eg topping ers at 55 will give more to the kids when i die. topping up to ers will also increase my monthly payout.

going for amp will also do the same.

I beg to differ.

All alternatives have their assumptions, ie the underlying assumptions are different, so cannot be totally the same. I reserve further comments.

(u are beginning to generalise, to think like BBC what happened to his Escalating Plan in his secret recipe?)

(Eg. your "long drawn debate" with uncle henry on the extra interest earned. Is CPF Life premium earning the extra interest? Is it relevant or not relevant depends on each individuals circumstances (ie the underlying assumptions). Both are not wrong, it depends on what is your assumptions or the actual situation at that time. Each person have their own plans how they will retire with CPF Life and CPF monies. Most important is you understand how CPF Life and CPF works to manage it to your advantage and situation. As we always say, there is no one route to rome! )

 

[lifeafter41]

Ok, I think dork32 is the first to get close to my hint

Is CPF Life nothing but your high yield bequest vehicle?

So far, all the discussions, suggestions or recommendation are focusing on this, ie how to make CPF Life your high yield bequest vechicle by:

1. Topping up CPF RA to ERS at 55 and every year to the new ERS limit
2. Delay payout and choice of CPF Life Plan to 70, or until u got no choice but to start payout.
3. High chance you will die before 70, so not a single cent lost, no need to talk about which CPF Life Plan to choose, just focus on maxing your RA account to earn max interest.
4. If u dun die at 70, no choice start payout, then continue to topup RA to new ERS limit to earn max interest. Of course u should only choose Basic Plan if u want a high yield bequest vehicle until u die.
5. AMP after 70? What are u talking about? It is the default for everyone, like any RA balance to be paid to u. No need to think so hard, it is common sense.

Do u need to think so hard what to do? Do u need any secret recipe? It is simple common sense when your answer is CPF Life is your high yield bequest vehicle

But when u treat CPF Life as your Retirement Income Vehicle for Life, it is a different story, at least for me!

Begin with the end in mind!

Is CPF Life your high yield bequest vehicle or your Retirement Income Vehicle for Life?

Hi maple, having said that, what’s the thoughts towards CPF life as the retirement income vehicle.

Much as the preference is for both, bequest and income, the method to be applied will be very different?

 

[lifeafter41]

who is the confuse guy? even your annuity is 0, you oa can continue to earn the extra interest for your ra. this is a fact. the way lifeafter speak. he definitely will have oa at 65 and many years after that.

Yes dork, don’t think lifeafter41 will be able to live that long.....lol

 

[maple96]

Yes dork, don’t think lifeafter41 will be able to live that long.....lol

u have to live beyond 90 for your CPF Life premium to drop from 60k to zero, assuming u contribute 60k to the pool

 

[maple96]

Hi maple, having said that, what’s the thoughts towards CPF life as the retirement income vehicle.

Much as the preference is for both, bequest and income, the method to be applied will be very different?

I already stated, I reserve further comments. I am just playing devil's advocate

I am not wealthy, well-to-do, do not use lifespan to gamble, nor have any dependents to use CPF Life as a high yield bequest vehicle. Most hwz forumers in moneymind are wealthily well-to-do!

 

[SKenny]

I beg to differ.

All alternatives have their assumptions, ie the underlying assumptions are different, so cannot be totally the same. I reserve further comments.

(u are beginning to generalise, to think like BBC what happened to his Escalating Plan in his secret recipe?)

(Eg. your "long drawn debate" with uncle henry on the extra interest earned. Is CPF Life premium earning the extra interest? Is it relevant or not relevant depends on each individuals circumstances (ie the underlying assumptions). Both are not wrong, it depends on what is your assumptions or the actual situation at that time. Each person have their own plans how they will retire with CPF Life and CPF monies. Most important is you understand how CPF Life and CPF works to manage it to your advantage and situation. As we always say, there is no one route to rome! )

The govt has said that they will give advance notice for the increase of FRS so that it facilitates our planning. However it is very strange that they have been silent on what goes beyond 2020 which is just around the corner.

Not sure what is happening?

 

[highsulphur]

The govt has said that they will give advance notice for the increase of FRS so that it facilitates our planning. However it is very strange that they have been silent on what goes beyond 2020 which is just around the corner.

Not sure what is happening?

Simple la... Election lor

 

[kehyi4]

The govt has said that they will give advance notice for the increase of FRS so that it facilitates our planning. However it is very strange that they have been silent on what goes beyond 2020 which is just around the corner.

Not sure what is happening?

The hints are there:

https://www.straitstimes.com/singapore/manpower/cpf-basic-retirement-sum-should-be-regularly-adjusted-so-payouts-keep-pace-with
CPF basic retirement sum should be regularly adjusted so payouts keep pace with inflation, standard of living: Josephine Teo

 

[SKenny]

The hints are there:

https://www.straitstimes.com/singapore/manpower/cpf-basic-retirement-sum-should-be-regularly-adjusted-so-payouts-keep-pace-with
CPF basic retirement sum should be regularly adjusted so payouts keep pace with inflation, standard of living: Josephine Teo

They were very forthcoming the previous time, when they gave a 5 years projection.

Now they resort of giving hints?? This is kinda sneaky isn't it?

 

[maple96]

The govt has said that they will give advance notice for the increase of FRS so that it facilitates our planning. However it is very strange that they have been silent on what goes beyond 2020 which is just around the corner.

Not sure what is happening?

PAP is well known to be able to foreast recession and take necessary actions before it happens (based on what I read in book). We already heard news of they being prepared to announce packages to help with upcoming GST increase and economic downturn. If u believe a big recession/depression/economic downtown is coming, I will not be surprised they announce a freeze or small increase for the next few years to help out.

If u fail to plan, u plan to fail

 

[SKenny]

PAP is well known to be able to foreast recession and take necessary actions before it happens (based on what I read in book). We already heard news of they being prepared to announce packages to help with upcoming GST increase and economic downturn. If u believe a big recession/depression/economic downtown is coming, I will not be surprised they announce a freeze or small increase for the next few years to help out.

If u fail to plan, u plan to fail

Looks like PAP is not forthcoming with their FRS projection. Is it because they cannot plan?

Telling someone that you are going to screw them in the near future, do not really reduce the pain when it happen. Just saying....

BTW, it is not a big deal to forecast a recession when they have all the data and when it is just around the corner. It would be better if they can forecast the damages they are doing to Singapore with their policies. Flip-flopping is a much poorer alternative.

 

[maple96]

Looks like PAP is not forthcoming with their FRS projection. Is it because they cannot plan?

Telling someone that you are going to screw them in the near future, do not really reduce the pain when it happen. Just saying....

BTW, it is not a big deal to forecast a recession when they have all the data and when it is just around the corner. It would be better if they can forecast the damages they are doing to Singapore with their policies. Flip-flopping is a much poorer alternative.

If decision is no change or small change, is +ve for the new cohort

I beg to differ with your -ve views.

 

[lifeafter41]

They were very forthcoming the previous time, when they gave a 5 years projection.

Now they resort of giving hints?? This is kinda sneaky isn't it?

Maybe busy with upcoming GE, no time for anything else......loll

 

[SKenny]

If decision is no change or small change, is +ve for the new cohort

I beg to differ with your -ve views.

"If decision is no change or small change is +ve for the new cohort ".... hmmm... Personally I prefer a bigger increase.

I accept and respect your different views.

 

[henrylbh]

"If decision is no change or small change is +ve for the new cohort ".... hmmm... Personally I prefer a bigger increase.

I accept and respect your different views.

Ha Ha I favour big increment. But more ordinary wage workers will be unhappy. From JT hint, BRS may no longer be half of FRS.

 

[dork32]

I already stated, I reserve further comments. I am just playing devil's advocate

I am not wealthy, well-to-do, do not use lifespan to gamble, nor have any dependents to use CPF Life as a high yield bequest vehicle. Most hwz forumers in moneymind are wealthily well-to-do!

the way you post, you are at least as rich, if not richer, as most of us.

different schemes are suitable for different people. if you feel that bequest is of the least importance, choosing standard or escalating may be a better choice.

if it is only for yourself, bbc did mention that standard is definitely more than basic for all situations