CPF Life - Standard Plan

[inmyopinion]

So TS did submit a request to withdraw 20% from RA?
No wonder cpf didn't sweep everything into the pool.

You only need to inform CPFB if you want the 20% to be in RA.

When the CPF member turns 65, CPF will set aside 20% as a "reserved amount".
This is to allow the CPF member a one-time lump sum withdrawal when they start their CPF LIFE monthly payouts.
* Not so convenient for those who want to have higher CPF Life monthly payout and to withdraw interests from the OA. You need to inform CPFB that you want to retain this 'reserved amount in RA'

If you decide to defer your CPF LIFE payout, eg till 68 or later, the "reserved amount" stays in your RA.
During this period (between age 65 and your chosen payout start age), any withdrawal you make from your CPF will be deducted from this "reserved amount".

Once you decide to start your monthly payouts, any balance left in the reserved amount will be transferred to your OA.

 

[inmyopinion]

You only need to inform CPFB if you want the 20% to be in RA.

When the CPF member turns 65, CPF will set aside 20% as a "reserved amount".
This is to allow the CPF member a one-time lump sum withdrawal when they start their CPF LIFE monthly payouts.
* Not so convenient for those who want to have higher CPF Life monthly payout and to withdraw interests from the OA. You need to inform CPFB that you want to retain this 'reserved amount in RA'

If you decide to defer your CPF LIFE payout, eg till 68 or later, the "reserved amount" stays in your RA.
During this period (between age 65 and your chosen payout start age), any withdrawal you make from your CPF will be deducted from this "reserved amount".

Once you decide to start your monthly payouts, any balance left in the reserved amount will be transferred to your OA.

 

[inmyopinion]

Hi SaGu, Am I correct to say that for CPF Life - Standard Plan....

If you died before 88 yr old = 不划算

If you died at 88 yr old = OK

If you live pass 88 yr old = 划算

Source: https://forums.hardwarezone.com.sg/...oming-tonight.6438635/page-456#post-158171338
If you think you will RIP around mid 80s or earlier, u choose CPF Life basic plan.

If you think you can live till 80+ 90+, u can choose standard plan and take advantage of it.

If you are like Dr M, u choose escalating plan and take advantage of almost every one. Receive payout until u buay lin chu.


Source:
https://forums.hardwarezone.com.sg/...pass-at-age-75.7180274/page-11#post-158222653

Example: Basic, Standard plan. Payouts - Bequest.


Source:
https://forums.hardwarezone.com.sg/...is-best-for-you.7219969/page-5#post-159759954

Basic plan payout

 

[makan tidur]

sagu reveals the beautiful mystery of CPF Life and it is actually quite simple


At around age 84, the accumulated monthly payouts would be about equal to your age 65-70 RA amount …….

And for those on Standard Plan and still living, they continue to receive their monthly payout which at about age 88, the accumulated monthly payout would be equal to their age 65-70 RA amount plus (pooled) compounded interests. After about age 88 and still living, they will continue to receive their monthly payout from the common interests pool from other Singaporeans until they pass on.


Or for those on Basic Plan, and still living, they continue to receive their monthly payout which at about age 92, the accumulated monthly payout would be equal to their age 65-70 RA amount plus their own (non-pooled) compounded interests. After about age 92 and still living, they will continue to receive their monthly payout from the common interests pool from other Singaporeans until they pass on.



#saguwisdom

You mean at 84 yrs old, your RA amount contributed is about the same as CPFLife payout received from 65 to 84? You include the 4% interest from CPF for that period. Also, the difference between 65 and 70 is not insignificant.

 

[ricogan427]

3 months before age 65 then can choose to start CPF Life at age 65 or 70 and what plan.

Like me, after converting to Lease Buyback Scheme, by CPF law me and my wife was converted to CPF Life compulsory without question.

 

[Nicholas92]

Okay, a lot of questions on the part that is left in the RA. This is the 20% that you can take back. I've read some stuff, did some maths and this is the answer.

This amount is calculated as follows.

(RA - topups) * 0.2 - 5000.

Let's put in my numbers.

(253011.18 - 10000) * 0.2 - 5000
= 43602.24.

So it is correct.
I assume sometime in the future, it will be transferred to OA. Again, will update when that happens.

Hello, I got 2 follow up questions on this.

1) The 10k in your formula, do you remember when did you top-up? I'm curious why the interests on this top-up isn't included in the formula deduction. Cause that means only the principal top-up is deducted, and you are permitted to withdraw 20% of the interest earned on your top-up amounts.

2) Other than this 10k, did you top-up any amount before turning 55, that was reserved in SA and formed part of RA? I would have thought those amounts (including interests) is also part of the deduction formula.

 

[eggie011]

Hello, I got 2 follow up questions on this.

1) The 10k in your formula, do you remember when did you top-up? I'm curious why the interests on this top-up isn't included in the formula deduction. Cause that means only the principal top-up is deducted, and you are permitted to withdraw 20% of the interest earned on your top-up amounts.

2) Other than this 10k, did you top-up any amount before turning 55, that was reserved in SA and formed part of RA? I would have thought those amounts (including interests) is also part of the deduction formula.

I top up the 10k 2-3 years ago. It was to RA. It seems only the principal topup cannot be withdrawn.

Before 55, I did not do any topup to SA. But from all the googling, topups to RA and SA can never be withdrawn.

 

[Spike]

Frankly, I see CPF life as a source of income supplement than to rely on as the primary source of retirement income.

Probability of inflation eroding the monthly stipends is high in the first.

At that age, it's enough for me to eat cai png daily with the occasional restaurant treat. I don't see myself enjoying the same quality of life as today. Heart willing, body might not.

 

[Andrew833]

Like me, after converting to Lease Buyback Scheme, by CPF law me and my wife was converted to CPF Life compulsory without question.

That's mean your Lease Buyback Scheme, you didn't receive much cash? most money goes to RA to start CPF Life?

 

[ricogan427]

That's mean your Lease Buyback Scheme, you didn't receive much cash? most money goes to RA to start CPF Life?

Yes received LBS bonus for 4 room flat - $30K, $15K each to me and my wife and $100K cash. Rest goes to our RA and start CPF Life.

 

[ricogan427]

Frankly, I see CPF life as a source of income supplement than to rely on as the primary source of retirement income.

Probability of inflation eroding the monthly stipends is high in the first.

At that age, it's enough for me to eat cai png daily with the occasional restaurant treat. I don't see myself enjoying the same quality of life as today. Heart willing, body might not.

I concur

 

[yokine3a]

Like me, after converting to Lease Buyback Scheme, by CPF law me and my wife was converted to CPF Life compulsory without question.

Were you told that you would be converted to cpflife before taking up LBS?

 

[ricogan427]

Were you told that you would be converted to cpflife before taking up LBS?

Yes during the enquiry session and the pros and cons. My personal opinion it is worth it and I treat CPF Life as passive income. Reason we took up LBS is that my son flat is nearby and my wife goes there to look after my 10 years old granddaughter. Also prior to LBS, I was sourcing for a 3 room resale flat and it cost around $320K. At that time my 4-room flat market price was $390K only.

 

[tricolours]

Just treat CPF as your monthly bonus income and not your main retirement source of income.

Choose a lifestyle you are comfortable with. It can wipe out your personal savings easily if you are not able to manage your finance well.

 

[1982-1994]

for the $220k - $20k part, how did the $20k derived?
Does it applies to only for people whose FRS are not met?

 

[eggie011]

for the $220k - $20k part, how did the $20k derived?
Does it applies to only for people whose FRS are not met?

The $20k is a top up done by John to his RA.

 

[Iamnobodyla]

How to retire early at 50s at the same time hit ERS?

 

[inmyopinion]

for the $220k - $20k part, how did the $20k derived?
Does it applies to only for people whose FRS are not met?

$20K is just an amount (can be more/less) used in the above illustration

To withdraw 20% of RA if one has set aside FRS, from 65 onwards.
(RA - top ups) * 20% - $5K


Example:
TS (eggie011) mentioned he topped up $10K in his first post.
Some background. At 55 (2016), I selected FRS. The sum was $161k (according to Google). A few years back, I did a little topup of about $10k to RA.

($253,011.18 - $10,000) * 20% = $48,602.236
= $48,602.236 - $5,000
= $43,602.236 ($43,602.24)





https://forums.hardwarezone.com.sg/threads/cpf-qn-just-turned-55.7035769/post-152651364

For those who want to top up RA but don't want to top up so much.
And since CPF removed SA (4%), you can use below method to maximize & earn 4% interest in RA and can withdraw out before CPF Life payout.

For those turning 55 yo in 2024:
Top up 40K to RA. Then u withdraw 20%. The amount is the same as you don't do any top up.
The 40K earns 4% interest for 10 yrs.

Include those turning 55 yo in 2025:

 

[yokine3a]

How to retire early at 50s at the same time hit ERS?

Earn more, spend less, save more. If you can't do all these, continue to work.

 

[1982-1994]

The $20k is a top up done by John to his RA.

$20K is just an amount (can be more/less) used in the above illustration

To withdraw 20% of RA if one has set aside FRS, from 65 onwards.
(RA - top ups) * 20% - $5K


Example:
TS (eggie011) mentioned he topped up $10K in his first post.
Some background. At 55 (2016), I selected FRS. The sum was $161k (according to Google). A few years back, I did a little topup of about $10k to RA.

($253,011.18 - $10,000) * 20% = $48,602.236
= $48,602.236 - $5,000
= $43,602.236 ($43,602.24)





https://forums.hardwarezone.com.sg/threads/cpf-qn-just-turned-55.7035769/post-152651364

For those who want to top up RA but don't want to top up so much.
And since CPF removed SA (4%), you can use below method to maximize & earn 4% interest in RA and can withdraw out before CPF Life payout.

For those turning 55 yo in 2024:
Top up 40K to RA. Then u withdraw 20%. The amount is the same as you don't do any top up.
The 40K earns 4% interest for 10 yrs.

Include those turning 55 yo in 2025:

Still don't understand why there is such thing as draw 20% from RA

(RA - top ups) * 20% - $5K
So say I want to OA 100k to my RA of $500k ($600k) at 55,
($500k - $400k) *20% - $5k =$75k to OA?

How to retire early at 50s at the same time hit ERS?

Cash outlay for your mortgage
Sell the flat, sale proceeds add to SA (FRS) together with the remaining OA
Monthly median pay is enough to hit ERS at early 50s


Only those earning median plus top up can hit ers at early 50s