CPF RSS Payout Issue

[oceanicmanta]

it doesn't look like a copy and paste. so the error might be cause of poster?

the error/typo is in the original reply in Mum's secured CPF mailbox

the family did not want to post actual CPFs replies in full

so I had paraphrased here

 

[wutawa]

such a reply took 3 weeks ,,, wonder how many people vetted it

the first reply also contained typo n obvious error eg) 31 Apr ??

it s a joke

given the buggy platform and tool, i suppose they got a lot of enquiries to reply. hehe

 

[sglandscape]

given the buggy platform and tool, i suppose they got a lot of enquiries to reply. hehe

I feel the site actually got significantly worse after the revamp. While it may look more aesthetically pleasing, it's a lot harder to find useful information compared to the old sites with tables and illustration.

What's worse is, to get any estimates you need to click through the calculator which makes it really difficult to do comparison across each of the plans.

 

[stingray1211]

RSS should just self calculate to compare with the calculator.

RSS is so straight forward actually.

your roughly divide linearly will be close enough.

the calculator is just a guide. if it seems too good to be true , your own calculations will verify that.

Read HWZ Forum Rules!

 

[chopra]

Hi may i confirm on the considerations to decide whether to change from rss to cpf life? My mum is 70yo and she has just abit of RSS

 

[BBCWatcher]

Hi may i confirm on the considerations to decide whether to change from rss to cpf life? My mum is 70yo and she has just abit of RSS

The classic Retirement Sum Scheme (RSS) will pay at least $350 per month until her CPF Retirement Account (including interest) is exhausted or until about age 90, whichever comes first. (Assuming of course there's at least $350 in the CPF Retirement Account. Once there's $350 or less left then that'll be the final "short" payment.) Exactly how long payments last depends on her current Retirement Account balance and whether any additional funds are added, and when. Payments must start by age 70, so presumably she's already receiving classic RSS payments.

CPF LIFE offers a choice of 3 payment plans: Basic, Standard, and Escalating. All 3 payment plans provide monthly payments for her entire life, however long it lasts. Because of this lifetime guarantee (and no $350 minimum) the CPF LIFE monthly payouts are lower while classic RSS payouts are made. But once classic RSS payouts run out CPF LIFE obviously pulls ahead.

A member who is in poor health probably shouldn't choose CPF LIFE. CPF LIFE helps insure against longevity, meaning the risk of exhausting your savings (your CPF Retirement Account specifically) and no longer having any retirement income. But if you aren't going to have that risk (because you're in poor health and highly unlikely to live to an advanced age) then classic RSS payouts should work better.

It's possible to defer a decision to switch to CPF LIFE until as late as a couple months before your mother's 80th birthday. However, classic RSS payouts will continue in the meantime, progressively draining her Retirement Account. Whatever's left at that point, if anything, could generate a very small CPF LIFE payout. But if someone (like you) expects to have more money available in a few years to boost her Retirement Account significantly to "buy" CPF LIFE longevity insurance (assuming she's in decent or better health then) then that's a possible approach I suppose.

Sometimes there are financial incentives available encouraging a switch to CPF LIFE. For example, the HDB Lease Buyback Scheme is designed to boost Retirement Account savings specifically to nail down a CPF LIFE retirement income stream. Tax relief and/or the Matched Retirement Savings Scheme may apply when dollars are added to her Retirement Account (for any payout arrangement). Family members may also be able to transfer their Ordinary Account dollars to her Retirement Account. All increases in her RA balance help boost her retirement income — for her entire life, however long it lasts, if she's on a CPF LIFE payout plan.

Which CPF LIFE payout plan to select is really a separate decision, a decision that follows whether to join CPF LIFE (and when).