CPF Easy Info Thread. :)

[henrylbh]

My father is 73

started lor

but his monthly payout use to pay his housing loan

$395 per month

so basically is no payout, after deduct

any advise for me?

Unbelievable. At 73 and he still has housing loan? How long more to go?

Are you prepared that your money stuck in his RA for the next 20 years, like a perpetual bond or that he outlive you?

 

[dork32]

My father is 73

started lor

but his monthly payout use to pay his housing loan

$395 per month

so basically is no payout, after deduct

any advise for me?

with a monthly payout of 395, age 73, a payout to 90 and 4% interest, your dad have about 60k in RA.

whatever extra you put in will not earn 5% but 4%. It will earn 5% when his ra drops to 60k or less.

one more thing is when you put money into his RA, his month payout will increase. eg he may get 500 per month. What is his action on this increase?
1. if he continues to get 395 and give you the rest, it is beneficial to you.
2. if he keeps the extra payout for himself and wow away the money, then i will not top up if i were you.
3. if you give your dad 105 allowance every month, i will top up his cpf and stop giving him allowance. ask him to take the allowance from the cpf.

there are so many possible actions and combinations. based on the limited information available, good advice can not be given. we have to go through all the ifs to choose the best choice. we will never be able to go through all the ifs.

 

[dork32]

I transfer my OA to my father's RA and he drawdown his RA. I recycle his payout into my OA and SA and then top up his RA all over again

it works for you coz your dad allows you full control of his cpf, including his payout into your account. when he stakes a claim on the payout and squander it away, you will have to reconsider this strategy.

 

[dork32]

I transfer my OA to my father's RA and he drawdown his RA. I recycle his payout into my OA and SA and then top up his RA all over again

you are probably pass 55. recycling his payout into your oa and sa does make some sense.

for those age 30, i would rather recycle the payout into father's oa and sa. again subjected to whether i can control the money or not.

 

[henrylbh]

you are probably pass 55. recycling his payout into your oa and sa does make some sense.

for those age 30, i would rather recycle the payout into father's oa and sa. again subjected to whether i can control the money or not.

My father monthly payout of $297 stopped when his RA became zero.

A few years later, I cash topped up his RA for tax relief. But there was no auto payout with my top-up.

Then I transferred 30k from my OA to his RA and requested for payout to re-commence. He got $297, same as his original payout, and I requested higher payout and it was adjusted to $690.

I keeping topping up his RA with my OA and requested for higher payout each time and his monthly payout was adjusted to $1,098 to $1,611, to $1,861 to $2,204.

On hindsight, I should have not applied for my father to re-commence payout at all

 

[dork32]

My father monthly payout of $297 stopped when his RA became zero.

A few years later, I cash topped up his RA for tax relief. But there was no auto payout with my top-up.

Then I transferred 30k from my OA to his RA and requested for payout to re-commence. He got $297, same as his original payout, and I requested higher payout and it was adjusted to $690.

I keeping topping up his RA with my OA and requested for higher payout each time and his monthly payout was adjusted to $1,098 to $1,611, to $1,861 to $2,204.

On hindsight, I should have not applied for my father to re-commence payout at all

moral of the story is this. henry is a smart guy that knows how to optimize. his dad did not poke his nose in and make unreasonable demands. henry's plan worked well.

 

[henrylbh]

But my report cards never failed to have red marks most of the time for maths from primary level all the way to A level

But I am proud that my kid had 6As in PSLE, more than I had from primary to A levels combined.

 

[rrr2015]

Thanks for the tips!

Actually there's an easier way to know the accrued OA and SA interest. login to cpf online, go to My Messages, scroll all the way down to Withdrawal. Your estimated withdrawal amount from OA and SA $xx will show more than the OA and SA in your account's homepage. That difference is the accrued interest earned in your OA and SA that has not been credited to the OA and SA principal amounts.

If wish to withdraw interest only, go CPFB personally in early Dec and ask them the approximate amount of interest that can be withdrawn without touching the principal amount. Then complete the application on the spot and wait for your money

 

[JF123456]

CPF life payout .. really worth?

Just wonder did anyone has ever done any calculation to compare CPF Life payout , vs putting the same principal in a bank for 10yrs earning 5% interest , and thereafter, getting the same payout as CPF Life ?

I am looking at Basic Plan @ RA = FRS.
Assuming if I put the same amt into a bank that gives 5% interest ( same as RA ), by what age will my principal runs dry ?


If someone has done this, can share the link here ?

I did a very simple calculation... with the bequest taken into consideration, CPF Life offers a better return only when I reach 101 years old ! Not sure if my formula is accurate... but, if so, how many of us actually lies beyond this age !

 

[BBCWatcher]

Just wonder did anyone has ever done any calculation to compare CPF Life payout , vs putting the same principal in a bank for 10yrs earning 5% interest , and thereafter, getting the same payout as CPF Life ?

Which bank is paying 5% nominal interest on Singapore dollars? Would you mind letting us in on that secret, because I'll be headed down to that bank right away.

 

[crimsontactics]

Just wonder did anyone has ever done any calculation to compare CPF Life payout , vs putting the same principal in a bank for 10yrs earning 5% interest , and thereafter, getting the same payout as CPF Life ?

I am looking at Basic Plan @ RA = FRS.
Assuming if I put the same amt into a bank that gives 5% interest ( same as RA ), by what age will my principal runs dry ?


If someone has done this, can share the link here ?

I did a very simple calculation... with the bequest taken into consideration, CPF Life offers a better return only when I reach 101 years old ! Not sure if my formula is accurate... but, if so, how many of us actually lies beyond this age !

The breakeven point is usually 90 years old.

So technically, you only benefit if you live a long life.

But to me, CPF Life offers me a peace of mind.

I rather die with money left unspent than having no money when I am alive.

Sent from Samsung SM-N960F using GAGT

 

[JF123456]

Which bank is paying 5% nominal interest on Singapore dollars? Would you mind letting us in on that secret, because I'll be headed down to that bank right away.

Just saying lah.. cos CPF says $ in RA has 5% interest.. so I am just doing some checking on CPFLife payouts

 

[JF123456]

The breakeven point is usually 90 years old.

So technically, you only benefit if you live a long life.

But to me, CPF Life offers me a peace of mind.

I rather die with money left unspent than having no money when I am alive.

Sent from Samsung SM-N960F using GAGT

That's true. But doubt I will live even till 85 ! I am tempted to leave my $ in SA, and get 4% interest instead. Too bad this 4% is not guaranteed.

 

[BBCWatcher]

The breakeven point is usually 90 years old.

"Breakeven" with what?

Just saying lah.. cos CPF says $ in RA has 5% interest.. so I am just doing some checking on CPFLife payouts

The Central Provident Fund Board is not a bank, and it doesn't say that Retirement Accounts earn 5% interest. It says they earn up to 5% interest.

So you're comparing CPF LIFE to...the account that funds CPF LIFE (i.e. CPF LIFE), which isn't offered by a bank? Does that even make sense?

Are we really going to waste more time and space comparing something that exists (CPF LIFE) with something that isn't on offer and doesn't actually exist? Seriously?

 

[tangent314]

1. Under the standard plan, CPF Life reaches 5% IRR at about age ~92.5. Basic is about age ~99, and escalating about age ~94.

2. Interest in RA money is 4%. The first $30k gets an extra 2% interest (i.e. $600), the next $30k gets another 1% interest (i.e. $300)

3. You're not going to find a bank giving you anywhere near 4% interest

 

[candy crush]

with a monthly payout of 395, age 73, a payout to 90 and 4% interest, your dad have about 60k in RA.

whatever extra you put in will not earn 5% but 4%. It will earn 5% when his ra drops to 60k or less.

one more thing is when you put money into his RA, his month payout will increase. eg he may get 500 per month. What is his action on this increase?
1. if he continues to get 395 and give you the rest, it is beneficial to you.
2. if he keeps the extra payout for himself and wow away the money, then i will not top up if i were you.
3. if you give your dad 105 allowance every month, i will top up his cpf and stop giving him allowance. ask him to take the allowance from the cpf.

there are so many possible actions and combinations. based on the limited information available, good advice can not be given. we have to go through all the ifs to choose the best choice. we will never be able to go through all the ifs.

He will use his spare money for gambling

buy some 4D, buy some vegetable, and buy some beer that his life

 

[Okenba]

What I'm hearing is this.
Let's say you have some preexisting condition and don't expect to live very long. Maybe until 75yo.
What should a person do then?

CPF life sounds great for someone expecting to live a long life. What if they don't expect to live a long life?

 

[candy crush]

Unbelievable. At 73 and he still has housing loan? How long more to go?

Are you prepared that your money stuck in his RA for the next 20 years, like a perpetual bond or that he outlive you?

yes, become my father is very stupid and he just drag the housing loan

still 7.5 years to go man

 

[dork32]

Just wonder did anyone has ever done any calculation to compare CPF Life payout , vs putting the same principal in a bank for 10yrs earning 5% interest , and thereafter, getting the same payout as CPF Life ?

I am looking at Basic Plan @ RA = FRS.
Assuming if I put the same amt into a bank that gives 5% interest ( same as RA ), by what age will my principal runs dry ?


If someone has done this, can share the link here ?

I did a very simple calculation... with the bequest taken into consideration, CPF Life offers a better return only when I reach 101 years old ! Not sure if my formula is accurate... but, if so, how many of us actually lies beyond this age !

a bank that give 5% interest will have a xirr of 5%.

you just have to punch in the numbers and continue till the xirr of cpf life hits 5%. it is quite likely that the xirr will hit 5% only when you are 101.

if you were to use cpf life standard, chances are you are going to hit it faster.

the moral of the story, if you have instruments that ensures you get 5% return, go for brs. dont waste time on cpf life.

 

[candy crush]

guys

if my father OA is about 4k

but his MA is about 49k

if the housing loan finish up all his OA

what will happen? do he have to pay in cash? can withdraw from MA?