CPF SA Shielding hack - RIP (Obsolete)

[fr33d0m]

Some argued standard plan bohua if die early mah…..so if there is no Basic plan to choose at age 65yo, then top up RA to max at 55yo is irreversible and machiam kena scam lol

bohua compared to what? something does not even exist?

 

[DevilPlate]

bohua compared to what? something does not even exist?

Refer to this article and draw yr own conclusion lah.
https://www.drwealth.com/cpf-life/

 

[fire]

Hello, you are daydreaming. You sure you confirm will have 3.3k per month for life? Guaranteed?

I was trying what they mentioned using the cpf payout calculator. At age 65, with $426k RA, I could only managed to get the payout to be abt 2k/mth. 3.3k per month required at least 600k RA

Maybe someone can advise how using the calculator can obtain 3.3k per month on 426k at 65

 

[DevilPlate]

I was trying what they mentioned using the cpf payout calculator. At age 65, with $426k RA, I could only managed to get the payout to be abt 2k/mth. 3.3k per month required at least 600k RA

426k at age 55yo and 65yo when start payout, u will get 3.3k

 

[fr33d0m]

Refer to this article and draw yr own conclusion lah.
https://www.drwealth.com/cpf-life/

SA has gone, so it is no longer a valid comparison. Next to go is CPF LIFE basic plan, without saying that choosing CPF LIFE basic plan is a bet against oneself..... How does one win on this! LOL

what to compare again?

 

[DevilPlate]

SA has gone, so it is no longer a valid comparison. Next to go is CPF LIFE basic plan, without implying that choosing CPF LIFE basic plan is a bet against oneself..... How does one win on this! LOL

what to compare again?

Duno what u are talking about haha
anyway im not here to argue w u whahaha

 

[fire]

426k at age 55yo and 65yo when start payout, u will get 3.3k

Ic thanks

 

[sohguanh]

Ic thanks

3.3k per month to me quite a lot. Since I eat little seldom spend a lot so maybe no need to top RA to so much. But I may need to downgrade my hdb to senior small flat else the town council fees every month is a killer

 

[henrylbh]

Looking at how the interest earn by RA doesn't flow back to you, I was wondering why you want to topup

I'm also expecting goalposts shifts before I retire. Now best for me is to take as much as I can out when I can better I manage it on my own

Looks like you got faint ideas about CPFL and your comments will mislead some here -

Oh I wasn’t aware that the interest earned in my RA doesn’t come back to me (via monthly payments) or to my beneficiaries if I die. If indeed so, then no real incentive to top up to max ERS.

The main problem is where to invest the funds after you take out, bearing in mind that T bills or other “safe” investments may not yield high interest rates in future

Your money in RA in CPFL (under standard and escalating plans) earns interest but is kept in the pool like your RA and you only start to draw on the interest when if you live past about 80 as your principal RA sum would be exhausted by monthly payouts by then. The longer you live the more you gain If you die around 80, kiss good bye to the accumulated interest in the pool.

 

[JustDoLor]

OIC. Interest earn by RA from 55 to 65 before CPFLife? Based on my understanding, it will be used as payout after 65.

If chose basic plan, RA at 65 will split into two part.
First part still remains as your RA, the interest earn here remains in your RA. Your initial payout comes from your RA till it is depleted. Second part (10% of RA at 65) is the annuity premium, interest go to Lifelong Income Fund.

If choose standard/escalating, at 65, RA will be emptied, all of your RA savings go to pay the annuity premium. Your initial payout come from your premium until depleted. All interest of your premium goes to the Lifelong Income Fund. Interest earned from 55 to 65 therefore formed part of your payout.

This i understand, then where the interest go? This is the point I clarifying what's the benefit of still topping up the RA.

Some here are saying the interest will still flow back to for payout.

 

[fire]

Looks like you got faint ideas about CPFL and your comments will mislead some here -


Your money in RA in CPFL (under standard and escalating plans) earns interest but is kept in the pool like your RA and you only start to draw on the interest when if you live past about 80 as your principal RA sum would be exhausted by monthly payouts by then. The longer you live the more you gain If you die around 80, kiss good bye to the accumulated interest in the pool.

Which comments are misleading? I'm open to clarification

 

[henrylbh]

Which comments are misleading? I'm open to clarification

I already quoted your post -

Looking at how the interest earn by RA doesn't flow back to you, I was wondering why you want to topup

I'm also expecting goalposts shifts before I retire. Now best for me is to take as much as I can out when I can better I manage it on my own

RA from 55 earns interest till the time you choose CPFL plan. When you commence payouts, the RA or part is used to pay for life annuity. It still continue to earn interest but belongs to the pool. This will be paid you when RA is exhausted.

 

[henrylbh]

3.3k per month to me quite a lot. Since I eat little seldom spend a lot so maybe no need to top RA to so much. But I may need to downgrade my hdb to senior small flat else the town council fees every month is a killer

3.3k is not much unless I move to JB with another 3k from rental income plus other passive income of 3k

 

[tJ3333]

No, that's not correct. It's all part of the same deal. Nominees enjoy the benefits of a principal guarantee, that the residual (if any) plus total payouts will at least equal pre-payout principal. This principal guarantee is mathematically impossible without interest fully factoring into the deal. The monthly payouts are too high. Without interest the payouts would have to be significantly lowered in order to maintain the principal guarantee for nominees.

Also the Basic Plan, but the above is true regardless of payout plan. The payouts and residual are too high without interest fully factoring into the computation.

Guarantees aren't free! CPF LIFE is double guaranteed: there will be payouts for life, however long it lasts, and payouts plus residual will always equal or exceed total pre-payout principal. It's also nonprofit, extremely low overhead, and backed by near guaranteed 4.0% floor rates (plus bonus interest). That's...incredible. If you understand it at least at little.

CPF LIFE payouts are not guaranteed, but they are designed to be stable. Any adjustments to CPF LIFE payouts are expected to be small and gradual. CPF LIFE is a self-sustaining insurance scheme where payouts are matched to premiums. Guaranteeing a minimum payout would require higher premiums.
https://www.cpf.gov.sg/member/faq/retirement-income/monthly-payouts/are-cpf-life-payouts-guaranteed-

 

[narutos]

Nothing much….js don’t die too rich….lol

Migrate to a country with no estate tax.

 

[narutos]

give away all your money!

Difficult. Estate tax always come with gift tax to plug this type of loophole.

 

[fire]

OIC. Interest earn by RA from 55 to 65 before CPFLife? Based on my understanding, it will be used as payout after 65.

If choose standard/escalating, at 65 there is no more RA, all of your RA savings go to pay the annuity premium. Your initial payout come from your premium until depleted. All interest of your premium goes to the Lifelong Income Fund. Interest earned from 55 to 65 therefore formed part of your payout.

Yup, This is my understanding. Interest earned will not flow back to RA account, it will flow to the pool and only be used as payout after 80

 

[fire]

I already quoted your post -

RA from 55 earns interest till the time you choose CPFL plan. When you commence payouts, the RA or part is used to pay for life annuity. It still continue to earn interest but belongs to the pool. This will be paid you when RA is exhausted.

Have you read what my comments were in reply to? What start the exchange?

 

[celtosaxon]

SA has gone, so it is no longer a valid comparison. Next to go is CPF LIFE basic plan, without saying that choosing CPF LIFE basic plan is a bet against oneself..... How does one win on this! LOL

what to compare again?

CPF LIFE Basic is probably next… but before they can do that, they have to figure out a way to add joint w/survivor option on the CPF LIFE annuity, otherwise the surviving spouse could face a major income drop.

 

[BBCWatcher]

CPF LIFE Basic is probably next… but before they can do that, they have to figure out a way to add joint w/survivor option on the CPF LIFE annuity, otherwise the surviving spouse could face a major income drop.

"Introducing the CPF LIFE Partner Plan!"

(I've corrected some figures upthread.)