CPF Life Questions

[AtomAnt111]

Thanks.
This fake atomic ant gave me a shock.

If he is right, everyone should be in BRS unless forced to. It is basically refund the deposit without any interest. A gamble quite many would lose.

Ps Read the portion below �� - it is from the article link >>

What Happens To Our Interest Returns Once We Put Our Money Into CPF LIFE?
This question is key to the security of our lifelong monthly payouts. Once we enter the CPF LIFE scheme, our contributed funds stop giving us an interest return directly. Rather, they continue earning the same interest returns, but this is contributed to the Lifelong Income Fund.

There are two implications for this: 1) the interest returns from our CPF LIFE contributions does not form part of our bequest and 2) it is the interest returns that provide Singaporeans and Singapore PRs who live longer the security of a lifelong monthly payout.

 

[AtomAnt111]

Pls share any links.. Really hope my interpretation is wrong too

 

[tangent314]

You are terribly confused. The principle amount is the amount transferred from the RA into CPF Life. While the money is still in the RA it will continue to earn interest and all that interest will go towards the CPF Life principle amount when you start your CPF Life payouts.

It's only when you begin your CPF Life payout where the bequest amount no longer earns interest. However, you still get the benefits of the interest because your monthly payout is calculated based on interest earned over actuarial life expectancy averaged across a population of your cohort.

 

[Toni90]

Why people against CPF Life always spread the wrong info? Where they got these info from?

 

[maple96]

Let me share with u CPF rules before July 2015 (cannot remember exact start year, maybe 2013):

1. At 55, member must choose CPF Life Plan. If Standard Plan was chosen, 50% of RA get transferred to CPF Life Pool as premium. If member die, CPF Life Pool premium will be refunded without interest. The remaining 50% in RA continues to earn 4% + extra interest and will be refunded too.

2. At 65, the remaining balance in RA will be transferred to CPF Life Pool as premium. If member dies, all unused premiums will be refunded without interest (interest accumulated from 65). This interest is 4% plus extra interest.

Current CPF rules after July 2015:

1. At 55, RA created and continues to earn 4% + extra interest.
2. At 65, if u choose to start mthly payout, u have to choose a CPF Life Plan. If u choose Standard Plan, all RA balance will be transferred to CPF Life Pool as premium. If u die, only unused premium, excluding interest of 4% + extra interest (accumulated from 65), will be refunded.

Current CPF rules allow u to defer mthly payout till 70. So long monies remain in RA account, it will continue to earn 4% + extra interest.

If u choose Basic Plan, only 10-20% of RA will be transferred to CPF Life Pool as premium. If u die, only unused premium, excluding interest of 4% (from 65), will be refunded. The balance in RA continues to earn 4% + Extra interest.

If u choose Standard or Escalating Plan, 100% of RA will be transferred to CPF Life Pool as premium. If u die, only unused premium, excluding interest of 4% + extra interest (from 65), will be refunded. Note extra interest (1% on first 60k + 1% on first 30k, total $900 pa) get paid into the CPF Life Pool as well. If u dun live long enough, u lose more of the 4% + extra interest.

 

[maple96]

Do read up on the post below.. Especially the portion on the bequest liability upon passing on..

https://www.google.com/amp/s/sg.fin...news/long-does-beat-break-even-235802141.html

Pls exercise your own due diligence when reading articles from this source. I noticed several articles with incorrect facts

 

[maple96]

For my case, $176K (FRS) will be deducted for the RA account, regardless of my intention to pledge the HDB. Once upon confirming the HDB pledge (between 55 - <65), the 50% of the FRS will be released to yr personal bank account- it will not be credited into Yr CPF OA which I would prefer.

U are right, if u pledge to withdraw 50% of FRS, the monies will be paid to your bank account ultimately. Ultimately, because u can do partial withdrawal.

If u would like to put into OA, u can VC to all 3 accounts if u have the annual limit, or pay off what u owe CPF for housing loan (if any). I reserve comments on my opinion.

Pls note my prior post are purely talking about CPF policies/rules, nothing of my opinion added.

 

[AtomAnt111]

Maple96 - thanks for all the info and being rational in yr facts

Guess the best person to confirm will be the CPF Officer - will try to book an appointment to clarify.

 

[henrylbh]

Do read up on the post below.. Especially the portion on the bequest liability upon passing on..

https://www.google.com/amp/s/sg.fin...news/long-does-beat-break-even-235802141.html

No wonder you got a little con...fused after reading that write up.

 

[dork32]

Do read up on the post below.. Especially the portion on the bequest liability upon passing on..

https://www.google.com/amp/s/sg.fin...news/long-does-beat-break-even-235802141.html

the thing about internet is that any monkeys can start to post on it.

the article quoted is very badly written.

then again, do you want to believe in the monkey that made this post?

 

[dork32]

Maple96 - thanks for all the info and being rational in yr facts

Guess the best person to confirm will be the CPF Officer - will try to book an appointment to clarify.

sorry, many of the cpf officers are as blur as you. you want facts, talk to maple, henry and bbc. but be careful with bbc. he will want to skew you towards escalating, start payout at 70 and ers

 

[Merg91]

Atomic ant is accidentally over radiated.
A victim.

Maple96 believes CPF Life is a scam with forfeited interest once one expire.
And your family get skinned.

Is that true?

 

[AtomAnt111]

Atomic ant is accidentally over radiated.
A victim.

Maple96 believes CPF Life is a scam with forfeited interest once one expire.
And your family get skinned.

Is that true?

"Thanks" for all the unwanted comments - appreciate those who can really advise.
If CPF staff cannot be trusted, guess the best person to trust will be our Finance Minister, too bad I am unable to approach him.

This forum is supposedly to enlighten - appreciate if you guys can focus on the topic rather than the participants

 

[dork32]

If CPF staff cannot be trusted, guess the best person to trust will be our Finance Minister, too bad I am unable to approach him.

This forum is supposedly to enlighten - appreciate if you guys can focus on the topic rather than the participants

i too am quite good at cpf and have been an unpaid adviser to many of my friends

one unemployed friend that have been living on rentals, has quite a lot of cash stashed up in a savings account. the money is reserved for paying off his home loans. i told him to pay back his cpf oa which he had used substantially for the property, instead of putting the money in the bank.

he went to cpf and they did a vc for him. the officers told him that there is no such thing as putting money into oa. he wanted to put in 100k but only 37k is allowed for vc.

i then printed the form the correct form for him.

many of the cpf people are like typical civil servants. they come and collect salary only. they have very little knowledge of their product, and just give politically correct answers

bbc will say that this is good becoz with vc money goes into sa. but this guy is in his early 40s. he needs the money to pay up his loan. he does not need money that is earning high interest, but locked up.

 

[dork32]

Maple96 believes CPF Life is a scam with forfeited interest once one expire.
And your family get skinned.

Is that true?

i dont see maple posting anything like that, at least in this thread.

 

[henrylbh]

With $264k in ERS this year, a total sum of $385k is expected 10 years later.

My question is :

If one expires @ 65, the beneficiaries should receive $385k.

If he expires 70 but never started on CPF Life.
I expect the beneficiaries to receive $385k+ 5 years of interest.

Am I wrong?

Don't tell me the beneficiaries only get back only $264k after 10-15 years just because he expires before he has a chance to start withdrawing CPF Life.

You will get back every single cent including due interest if you uplorry before signing up to commence CPF Life payout. Once you start, picture changes

 

[henrylbh]

Atomic ant is accidentally over radiated.
A victim.

Maple96 believes CPF Life is a scam with forfeited interest once one expire.
And your family get skinned.

Is that true?

Though I dislike CPF Life, it's not a scam. It's a betting pool Some must lose for others to gain. Still it's good for those who can't manage or don't know how to manage their CPF retirement sum.

For those who can manage and know how to gain from the system would prefer to just back what's theirs, no more (gain), no less (loss).

 

[BBCWatcher]

Though I dislike CPF Life, it's not a scam. It's a betting pool Some must lose for others to gain.

It’s (a little bit of) longevity insurance, which means you and your progeny don’t have to lose by hoarding as much wealth in conservative, low yielding vehicles. That’s whether you’re a savvy investor or not. Why is this fact so difficult to understand? It shouldn’t be.

Make CPF LIFE work for you in the ways it’s best designed to serve, and structure the rest of your financial life accordingly. Simple.

Honestly I frequently wonder whether the Money Mind crowd is as well-to-do and savvy as it purports to be. A low cost, actuarially fair, modest amount of high quality longevity insurance is a problem? Seriously? This viewpoint makes no financial sense.

 

[henrylbh]

I fail to understand how you could fail to understand To you, there is only one road to Rome.

 

[BBCWatcher]

Just run the numbers, Henry. It’s very, very clear then. Reduce CPF LIFE if you want, then compensate with self-insurance for longevity (as you must) in the form of more, bond-heavier, retained wealth. And that’s just not a financially attractive trade, under reasonable or even fairly unreasonable assumptions.