CPF Life Questions

[angtc11]

No, that's not correct in at least two ways. He qualifies for more free money deposited into his CPF account(s) -- the government is topping up some accounts, especially among the poorest Singaporeans -- and more (or all) of his premium dollars earn bonus interest.


That's not correct either. Under the old Retirement Sum Scheme there wasn't as much bonus interest (almost none actually), and there weren't free money deposits to any significant degree. Also, contribution rates were somewhat lower -- including especially employer contributions -- which didn't help your sample individual. And your sample individual ran a significant risk of outliving his CPF distributions, which of course meant/means he'd have to try to figure out how to work really, really extra hard at age 88, or at age 92, instead of working until (say) age 73 then easing up. Neither scenario is terrific, but destitution at age 88+ is worse.

Please don't conflate cpf with cpf life, I believe someone showed you the bonus interest happened before cpf life was rolled out.

Also, said individual can't survive at 65 and you are asking him to think about 92? My opinion is that the government needs to step in for such cases because cpf life does not solve poverty issues

 

[henrylbh]

That's what I predict will happen since the breakeven age is 90+. Personally I am not so confident our median lifespan will increase so much

The casino is still very new. Only earlier cohorts will be screwed for contributing more premiums than needed. Then when the manager is more confident, the premiums of subsequent cohorts would/should be adjusted?

If the earlier cohorts live longer than expected, life payouts would certainly be adjusted and some will become destitute

 

[henrylbh]

Please don't conflate cpf with cpf life, I believe someone showed you the bonus interest happened before cpf life was rolled out

Forgive him for forgetting. He only remembers what he wants for his case

 

[angtc11]

The casino is still very new. Only earlier cohorts will be screwed for contributing more premiums than needed. Then when the manager is more confident, the premiums of subsequent cohorts would/should be adjusted?

If the earlier cohorts live longer than expected, life payouts would certainly be adjusted and some will become destitute

My reference point is this statement: 'what's wrong with collecting more money'. If the fund was running at a loss, you can be sure it will be adjusted. But vice versa?

No worries, CPF life solves destitution according to some people here =p

 

[BBCWatcher]

Please don't conflate cpf with cpf life, I believe someone showed you the bonus interest happened before cpf life was rolled out.

The first percentage point of bonus interest was introduced in 2008, and CPF LIFE was introduced in 2009. The second percentage point of bonus interest was introduced in 2016.

If you want to hang your hat on a whole year of the first percentage point of bonus interest introduced before CPF LIFE, well, that's pretty nutty. Because obviously, as a matter of simple financial math, it'll only be the younger, CPF LIFE cohorts that get to enjoy a substantial or full working career with bonus interest on their contributions.

Also, said individual can't survive at 65 and you are asking him to think about 92? My opinion is that the government needs to step in for such cases because cpf life does not solve poverty issues

Which is worse: being poor (but not destitute) for life, or being poor at first and then destitute in the final years of life? Both are bad, stipulated, but scenario #2 is clearly much worse. Less worse is better.

I'm certainly not opposed to doing even better than less worse, and in many cases I advocate raising my taxes to help accomplish that goal. How about yours?

 

[angtc11]

Forgive him for forgetting. He only remembers what he wants for his case

I totally respect him for his knowledge, helpfulness and perseverance. However his predilection with cpf life is extraordinary, to the point of ignoring facts...

 

[henrylbh]

My reference point is this statement: 'what's wrong with collecting more money'. If the fund was running at a loss, you can be sure it will be adjusted. But vice versa?

No worries, CPF life solves destitution according to some people here =p

Vice versa means earlier batches were screwed.

 

[henrylbh]

I totally respect him for his knowledge, helpfulness and perseverance. However his predilection with cpf life is extraordinary, to the point of ignoring facts...

His sole basis is practically everyone wins with CPFL. No other ways for ALL.

 

[angtc11]

The first percentage point of bonus interest was introduced in 2008, and CPF LIFE was introduced in 2009. The second percentage point of bonus interest was introduced in 2016.

If you want to hang your hat on a whole year of the first percentage point of bonus interest introduced before CPF LIFE, well, that's pretty nutty. Because obviously, as a matter of simple financial math, it'll only be the younger, CPF LIFE cohorts that get to enjoy a substantial or full working career with bonus interest on their contributions.

Your point being? I got extra interest in cpf and it suddenly becomes a benefit of cpf life? If the condition of the extra interest is that I have to participate in cpf life, your statement will be much more persuasive.

Which is worse: being poor (but not destitute) for life, or being poor at first and then destitute in the final years of life? Both are bad, stipulated, but scenario #2 is clearly much worse. Less worse is better.

I think you are giving a false choice. Firstly,he will be destitute only if said individual lives beyond 85. Secondly, the cpf life that you are advocating does not solve anything either, if he needs to work after 65 to survive with the payouts, he essentially needs to work until he is dead to survive with cpf life cetaris Paribus and the point I was addressing was working in old age. Thirdly, my statement is one of fact. If said individual needs 600 to survive and only gets 400 from the MSS, he needs to earn 200 to live. With cpf life, he only gets 350,he needs to earn 250 to live. Please refute the point than asking for a false binary choice

I'm certainly not opposed to doing even better than less worse, and in many cases I advocate raising my taxes to help accomplish that goal. How about yours?

My opinion differs slightly from yours. I do think more can be done for the poor but my opinion is that rather than raising taxes, part of the land sales revenue can be used. Currently all our land sales revenue is locked away. My opinion is only freehold lands sales should be locked away since the land is sold in perpetuity. Leasehold land sales should be amortized to be used. Ie if it's a 99 year sale, ~1% of that amount should be used per year.

 

[justwakeup]

Again, ppl kpkl this system not good, that system screw up. That is easy. What about alternatives? I certainly is not smart enough for that. I believe in social responsibility. However imperfect the system is, it is still a way of tackling the issue of the old & poor outliving their retirement savings / payout without overburdening the government (which in turn mean us all).

I kinda agree that (much?) more should be given to the poor. How to do it? I will have to let the smarties sort it out.

 

[ocs_woodlands]

I have another question which I think someone else has previously asked, but I just wanna be sure.

Assume i have a sum in SA way on excess of ERS after the RA is formed @ 55 and money has gone into it.

@ 56 and subsequent years,
1) where does the 4% INTEREST on the sum in SA go?
2) Assuming that the 4% interest is = $X, when I withdraw the $X after 55, is the $X sum deducted from OA or SA?

 

[Merg91]

Others pointed out your confusions.
I was stunned & almost panic as I am on the way
to ERS.

Like doctors & lawyers, most professional advices are true & trustable. So are CPF staff.
Mistakes do happen.
It is also at times the unusual /uncommon problems that may need the senior help.

What makes you think the financial minister know
every single tiny bit of CPF to answer you?
Please don't waste his time.

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.

 

[Merg91]

Good govt have to think of making the country /most of the people better.
70% is happy here.
It is probably almost 50% or simply a slight majority in many other countries .

Of course the govt know some can manage, especially those who don't need them. Lol
It is those who need don't know how to manage /maximise.
If CPF is optional, the need-it-later group would clear up the pot of gold in no time.

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).

 

[henrylbh]

It is those who need don't know how to manage /maximise.
If CPF is optional, the need-it-later group would clear up the pot of gold in no time.

If CPF is optional, I can't understand how the need-it-later group would clear the pot of gold in no time.

If you are referring to CPFL, the longer surviving ones are the ones that benefit, nothing to do with whether can or cannot manage their CPF.

 

[henrylbh]

Others pointed out your confusions.
I was stunned & almost panic as I am on the way
to ERS.

Why stunned and almost panic? You don't know what you in for?

You also panic when ocbc dropped just 5c just after you bought?

 

[Merg91]

I thought I knew until I saw atomic's posting.
It is a $120k problem. Not a small sum for most.

I attended the last CPF retirement talk @Suntec (not the first one for me) 2 Sunday ago.

I fifo ocbc for years. Cool stock.
I heng cleared all YZJ though.

Why stunned and almost panic? You don't know what you in for?

 

[maple96]

I thought I knew until I saw atomic's posting.
It is a $120k problem. Not a small sum for most.

I attended the last CPF retirement talk @Suntec (not the first one for me) 2 Sunday ago.
.

U attended CPF talks more than once and still dun know your CPF rules, and what will happen to your money or interest? And u still can come here and get confused and panicky by others

AtomAnt111 is obviously much better than u, he/she does research, read and get confused by that article, came here to seek clarifications and got it (hopefully).

 

[henrylbh]

I fifo ocbc for years. Cool stock.

Yet your heart sank when OCBC dipped 5c only from 10.50 just after you bought it Weak heart better stay away from shares.

 

[dork32]

U attended CPF talks more than once and still dun know your CPF rules, and what will happen to your money or interest? And u still can come here and get confused and panicky by others

many of those talks are useless, just like the staff of cpf.

one of their favorite statement is:

"With CPF life standard, you get a higher monthly payout but a lower bequest compared to CPF life basic. full stop."

you tell this type of useless statement helpful or not.

higher monthly payout: how much higher? how did they arrive at this number?

lower bequest: how much lower? what is their calculations?

to me, there will be a point, if the monthly payout is raised sufficiently, that i will chose cpf life standard.

it is through the people here at the forum that we analyzed the numbers. many of use come to the conclusions that basic is better.

 

[lifeafter41]

many of those talks are useless, just like the staff of cpf.

one of their favorite statement is:

"With CPF life standard, you get a higher monthly payout but a lower bequest compared to CPF life basic. full stop."

you tell this type of useless statement helpful or not.

higher monthly payout: how much higher? how did they arrive at this number?

lower bequest: how much lower? what is their calculations?

to me, there will be a point, if the monthly payout is raised sufficiently, that i will chose cpf life standard.

it is through the people here at the forum that we analyzed the numbers. many of use come to the conclusions that basic is better.

Looking at the tables.....I will choose Basic.
Now just deciding whether to go for FRS or ERS.

Having said that, imho, I do not see the rationale to go for Standard plan at all.