CPF Retirement Sum Scheme

[karakorum1999]

Starting from Jan 2016, the old requirement to have a certain minimum sum in Medisave acct at age 55 before any withdrawal has been removed.

 

[oceanicmanta]

Asking for fren's mum who is 85yo

Current RA = 20k (RA only recently formed by cash top up)

Have not requested for any monthly payout yet

CPF RSS calculator shows she could receive $297 per month for next 6 years (estimate)

Using the calculator, by topping up :
- $1k, the payout becomes $404 for 5 years (estimate)
- $5k, payout = $481 for 4 years
- $8k, payout = $538 for 5 years
- $10k, payout = $579 for 4 years ?!

it seems strange that the duration of the payout could change from 6yr, to 5 to 4 depending on the Top Up amount.

Also, the Total Payout received (with 8k top up) would be more than the 10k top up.

Pls could someone help explain why ?

Any reference in CPF as to how Top up to RA is being disbursed into Monthly Payout ?

Is $297 the minimum monthly payout under RSS ?

 

[henrylbh]

Write to CPF for the correct amount if you want to know for sure.

Under the Minimum Sum Scheme (MSS) now renamed Retirement Sum Scheme (RSS), the monthly drawdown now renamed monthly payout is estimated to exhaust RA in about 20 years based on full RSS from drawdown age (DDA) now renamed payout eligibility age (PEA).

Like amount for RSS, over the years, PEA changed from 60 to 62 and now 65 and min payout changed from $297 to $250.

For the old lady, I think her PEA was 60 and the min payout was $297.

For her, any top-up to RA before 80, the monthly payout is recalculated based on new RA (after top-up) to exhaust RA by 80, with a min payout of $297.

Any top-up from 80, the payout is recalculated to exhaust the RA by about 5 years to 85 with min payout of $297.

If another top-up is made at 83, the payout would be recalculated to exhaust the new RA (after top-up) by about 5 years to 88 and so on with the min payout based on the payout before topping up.

 

[andyhtc]

better or lousier is just a perception

rss pay higher for 20+ years.

to ensure that your payout last for life, you money is pooled with others. and of course they will reduce your payout and the bequest.

this reduction is the price for having a lifelong payout.

people that finds this price cheap will say cpflife is good.

people that find this price expensive will say rss good.

this is my opinion

for basic, you lose 20% of your interest every year. at 250k and 4%, you lose 2k per year. ok lah not too expensive, not very cheap either.

for standard, you lose all your interest, 10k per year. compounded some more. i think not cheap at all

My mother is on Retirement Sum Scheme and her first draw down was at age 70. It is nice to know that she gets to keep all her earned interest.

As she does not need the payout, she is now asking me to top it back into her Retirement Account due to the good interest rate of 4% I guess she will get the monthly payout until she is 95 years old.

CPF Life is a blackbox now compared to the Retirement Sum Scheme.

 

[BBCWatcher]

My mother is on Retirement Sum Scheme and her first draw down was at age 70. It is nice to know that she gets to keep all her earned interest.

That's not a given. She and her nominee(s) (together, combined) will collect all CPF interest. She individually may or may not. If she personally receives all CPF interest then that will mean she has outlived her CPF savings.

This is a very important point. Money has zero value to the deceased!

As she does not need the payout, she is now asking me to top it back into her Retirement Account due to the good interest rate of 4% I guess she will get the monthly payout until she is 95 years old.

She can do that as long as she has room below the current Enhanced Retirement Sum. Unfortunately the CPF Board doesn't seem to automate this. It's a manual process every month.

 

[fr33d0m]

My mother is on Retirement Sum Scheme and her first draw down was at age 70. It is nice to know that she gets to keep all her earned interest.

As she does not need the payout, she is now asking me to top it back into her Retirement Account due to the good interest rate of 4% I guess she will get the monthly payout until she is 95 years old.

CPF Life is a blackbox now compared to the Retirement Sum Scheme.

What you do not understand does not make it a black box. There is actuary model behind CPF LIFE. I am pretty sure that you have limit knowledge about rocket science or nuclear weapons, but it is not black box. There is science behind it.

 

[dork32]

What you do not understand does not make it a black box. There is actuary model behind CPF LIFE. I am pretty sure that you have limit knowledge about rocket science or nuclear weapons, but it is not black box. There is science behind it.

i agree with andy that it is a black box.

a black box does not mean that there are no rules and procedures. it is just that the rules and procedures are not made known to the general public.

you can describe the actuary model behind cpf life? you can then it is not a black box. otherwise it is a blackbox.

 

[fr33d0m]

i agree with andy that it is a black box.

a black box does not mean that there are no rules and procedures. it is just that the rules and procedures are not made known to the general public.

you can describe the actuary model behind cpf life? you can then it is not a black box. otherwise it is a blackbox.

If as you said that CPF LIFE is a black box, the opposition would have field days in parliament sessions regarding CPF. I have yet seen opposition calling it a black box in parliament.

 

[BBCWatcher]

I haven't either. In fact, I see one member of the Workers' Party previously suggested a CPF LIFE payout plan that can start as early as age 60 but features zero bequest (as the CPF LIFE Income Plan, a payout plan that was available when CPF LIFE was first introduced but is now no longer available except to those already on that plan). I think that's not a bad idea, actually. I see the merit in offering the option of an earlier payout starting age. But I think I'd tweak it a bit to attach some modest conditions to ensure adequacy:

* Minimum age 62 payout start
* Minimum Full Retirement Sum with property pledge/charge (or age 55 ERS without)
* CPF LIFE Escalating Plan only (or the "Partner Plan" I've described before)

I think minimum age 60 is going to be quite tough. The financial mathematics to add 60 extra payout months up front are very challenging. But age 62 (36 extra payout months) should be viable within these parameters.

 

[Value.Matrix]

If as you said that CPF LIFE is a black box, the opposition would have field days in parliament sessions regarding CPF. I have yet seen opposition calling it a black box in parliament.

Because it wasn't a black box.

Now it is. I am waiting for those who say its not a black box, to let us know how it's done.

 

[elvintay07]

Hi everyone
Assuming if your SA ($200k) and Medisave ($66k) is already max, what will happen to your monthly contributions? Will all the contribution from Medisave and SA flows into OA?

 

[iceblendedchoc]

I haven't either. In fact, I see one member of the Workers' Party previously suggested a CPF LIFE payout plan that can start as early as age 60 but features zero bequest (as the CPF LIFE Income Plan, a payout plan that was available when CPF LIFE was first introduced but is now no longer available except to those already on that plan). I think that's not a bad idea, actually. I see the merit in offering the option of an earlier payout starting age. But I think I'd tweak it a bit to attach some modest conditions to ensure adequacy:

* Minimum age 62 payout start
* Minimum Full Retirement Sum with property pledge/charge (or age 55 ERS without)
* CPF LIFE Escalating Plan only (or the "Partner Plan" I've described before)

I think minimum age 60 is going to be quite tough. The financial mathematics to add 60 extra payout months up front are very challenging. But age 62 (36 extra payout months) should be viable within these parameters.

i have hit FRS at 35, I actually do not mind CPF starting my payment earlier by using the FRS to form the RA at 35 years old. If CPFB allow.

 

[reddevil0728]

i have hit FRS at 35, I actually do not mind CPF starting my payment earlier by using the FRS to form the RA at 35 years old. If CPFB allow.

there's a reason why FRS increases yearly....

 

[hwarzoner]

Hi everyone
Assuming if your SA ($200k) and Medisave ($66k) is already max, what will happen to your monthly contributions? Will all the contribution from Medisave and SA flows into OA?

SA will stay in SA, medi will overflow to OA

 

[elvintay07]

SA will stay in SA, medi will overflow to OA

Thanks. Which means SA even if it hits FRS will continue to accumulate without ceiling/ cap?

 

[reddevil0728]

Thanks. Which means SA even if it hits FRS will continue to accumulate without ceiling/ cap?

Yep.

just that you can’t top-up anymore.

 

[elvintay07]

Yep.

just that you can’t top-up anymore.

Noted with thanks

 

[compro_1975]

what are other good forecast calculator example to this one? https://geek.sg/tools/cpf-forecast/

the webmaster i think gone already for this so need find new one...

 

[CrashWire]

the webmaster i think gone already for this so need find new one...

The Contact Me page or social media links at the bottom not working?

 

[compro_1975]

The Contact Me page or social media links at the bottom not working?

Send him 2 times already...