Based her age, she is likely to be under RSS, not CPF Life.
If I were under RSS, and has so much money as she has (after she disposed her flat), and I do not think I can live past 90 (based on family history), I will stick to RSS. RSS will let her withdraw (payout) from 65 until 90. If I do not spend all the mthly payout, I will just dump it back to RA (if still got ERS limit), this will increase future mthly payout.
Leave sufficient monies in OA, treat it like a high interest savings bank account, for emergency use. She cannot touch RA in times of emergency, so dun ask her go eat grass if she does not have sufficient emergency funds for survival. CPFB unlikely to help her even she got lots of monies in RA.
If she thinks she will live past 90, then explore CPF Life. Choose Standard Plan if she does not want to give any bequest when she die.
Dun forget to update her CPF nominations.
U did not mention if she has monies in MA. Put some monies there to earn 4% interest to pay for premiums and for emergency medical expenses if she only has medishield life.
Dun forget teach her to how to use internet to transfer monies from bank to CPF or u continue to help her when her brain deterioriates? LPA?
Edit: Ok I overlooked the SHB as value matrix pointed out, so likely she has no choice but join CPF Life. She needs to work out how much she has left after topping most of her sales proceeds into RA.
I will choose standard plan based on her situation to have a higher payout at 65, enjoy while she still can.
Thank you Maple96 for your valuable input!
I have just checked with my mum and aunt. My aunt has about 25k in MA, is it feasible to top it all the way up to the basic healthcare sum when she sells away the house?
And yes, i overlooked the part about LPA, I will talk to my aunt about this arrangement too.
Its for no frills thinking (especially if shes not into leaving a legacy). Its a selfish act to ensure she will not run out of money even pass age 90 or 100. Update: it is also because she will be taking the silver housing bonus. Which force her to take up cpf life.
At current drawdown rate for RSS, it will be revised to end by 90 years old.
But in order for 1 to be right, there have to be parameters to understand her objective. Thats why i try my best to give suggestions based on current situation.
Maple96 is also right for RSS. Its how you want the retirement to be done.
Thanks Value.Matrix!
To Maple96 and Value.Matrix, since I saw a couple of replies suggesting RSS so I asked my mum and aunt about it too. Looks like if my aunt doesn't take up the silver housing bonus, she doesn't need to go for CPF Life, would you guys suggest RSS over CPF Life if she doesn't take up the bonus?
I calculated that if she sells her flat at 450k,
returns to her cpf account the accrued part of 60k
and pays 150k for new one.
She will have 240k left.
By then her OA+RA will have 80k and top up to the full retirement sum (200k maybe)?
then spare cash
1) top up to MA till basic healthcare sum
2) save about 6 months worth of emergency cash
3) remaining go to OA?
No, she can certainly leave a legacy: potentially as much as every other scrap of wealth she has, as soon as her 65th birthday if she wishes. They're called "lifetime gifts," and escalating guaranteed life annuities make it hugely easier to give away as much as everything else, as early as right away (annuity payout start).
No, that's the opposite of selfish. With an escalating CPF LIFE payout stream and a modest 2 room HDB unit (with sufficient leasehold remaining) she's guaranteeing only that her basic lifestyle needs are taken care of, that she's never an enormous burden on her children or other loved ones, and then she's free to give away as much as all other wealth just as soon as the annuity payouts start.
There's also zero "competence risk." This is the government as the paying agent -- an extremely high quality, AAA-rated one with a high quality, convertible currency. No matter what she does in the future in terms of her own investment decisions -- she could go bonkers and "invest" in OneCoin -- as long as the Singapore government exists her basic lifestyle will be well defended every month for life. The government will make sure of it.
Said another way, an escalating, guaranteed life annuity is the strongest longevity insurance. If you and your loved ones want the utmost peace of mind and financial security -- and the freedom to enjoy life together with bigger and earlier lifetime gifts -- then this is how you do it. It's effectively like the trust fund construct that wealthy families so highly value for each of their members, but it's available in some measure to middle class Singaporeans from the government. And it's a lovely, powerful thing.
Thanks BBCW, my aunt has two not so kind children who will make themselves visible whenever my aunt has monies and disappear whenever she is penniless. i don't think my mum wants her sister to be saving anything for her children, we are just looking at being self-sufficient for my aunt (be it daily expenses and if need be, medical costs).
my aunt doesn't foresee herself living beyond 90 actually so if possible, RSS might be a better choice for her.
