you go for frs + amp, you lose the interest from 55 to 65
To age 70, actually, because
if you're trying to maximize yield certain -- which seems to be the popular idea in these sometimes silly threads, but OK, whatever -- you would start CPF LIFE payouts at age 70 (the maximum allowable age). That's 15 years (not 10) of annually compounded 4% interest on the age 55 ERS top up, plus the compounded interest on subsequent annual January ERS top ups (and 5 more of them) over that period.
Please note you can still make annual January AMP (or for CPF LIFE payout boosts, as you wish) top ups after age 70, as the ERS increases.
Also please note that an age 70 payout start means your CPF nominee(s) do better if you should unfortunately die within the 5 year interval from age 65 to age 70, because they get the straight up principal plus compounded interest, pre-longevity risk pooling. That's another reason to defer if you're trying to maximize yield certain. According to Singstat's 2017 life tables there's a ~5% chance that somebody alive on his/her 65th birthday will be dead before his/her 70th birthday. So if you want a ~5% greater chance of beating the longevity risk pool (for your heirs' benefit), there you go, that's another advantage of deferring to age 70. (It's actually >5% chance of pure benefit to heirs due to the way compound interest works, but that calculation is a little more complicated. This is a free bonus, a pure contingent benefit to your heirs. If you love the classic Retirement Sum Scheme and pure, non-pooled Retirement Account funds, then you should also love hanging onto that scheme with the phattest possible balance for 5 more years -- i.e. deferring to age 70, stuffed full with ERS top ups.)
you go ers, you lose 20% of the interest after 65. this 20% is going to rise steadily to 100% when you are bout 90
You haven't phrased that well, but sure, go ahead and make the most yield-pessimistic assumption you wish, if you wish, about date of death. First of all, it's not going to be 20% for a male at age 70, but let's outlandishly assume that it's 20%. And then add the most pessimistic personal mortality assumption, which still means (with the Basic Plan) your net effective yield certain on these ERS top ups is somewhere in the mid 3.X%/year range. (The exact X is a little complicated due to the way CPF calculates interest on lowest balance for the month.) That's much higher than all government bonds, and forecastably higher than even the corporate bond fund (MBH).
So to make this math work in favor of deferred AMP top ups over earliest ERS top ups, you have to reliably hit greater than mid-3.X% yields on your top up money. To which I'd say, "Good luck!" One reasonable, underlying assumption here is that both ERS and AMP top ups would be allocated to bond/bond-like investments in any alternative. Your stock/stock-like investments would remain more or less as they are, whatever they are. However, if you're the odd duck that's going to keep 95% (or something like that) of your total investment portfolio in stocks from ages 55 to 70...well, "Good luck!" again. (No, that's not realistic. Realistic is dealing within the bond/bond-like part of your total investment portfolio for these particular dollars.)
Bottom line: take the ERS deal, folks (for those reasonably well-to-do people who are in a position to do so). It's a great deal.
