FRS or ERS?

[royalmix]

Not sure if CPF Board has criteria for allowing changes to the plan. Because I don't think they mention it was changeable on their website.

I edited my post, read the last part. You can from basic to "worst plans" but not from "worst plans" to basic.

"worst plans" to the member in my eyes, but good to CPFB! So the one way traffic

Still subject to approval.

 

[WHLN17]

No, not "very clearly." Examples:

1. If you have no CPF nominee(s) that you care about — no heirs, no charity — then you definitely should NOT choose the CPF LIFE Basic Plan. The monthly payouts are permanently lower than the CPF LIFE Standard Plan. You cannot spend any money after you're deceased.

2. If the CPF LIFE Basic Plan would not be adequate for your living needs, and if other ways to support your living needs are inadequate (or unavailable), then you're probably have to choose the CPF LIFE Standard Plan. At that point it does not matter whether a CPF nominee might receive a somewhat bigger bequest or not. You need the extra money now in this situation, not after you're dead.

3. If you have other assets then your choice of plan might not be obvious even if you think there's a high probability you'll die before age 80. Especially if you're trying to assure a particular level of lifetime gifts and/or bequests. There are no CPF LIFE payout plans that assure a specific bequest level.

For 1, if I know I will die before 80, I should choose basic plan isn't it? That way, I leave behind higher bequest. As for higher payout under SP, the extra I would have gotten is not meaningfully more as I will die at 80.

For 2, the point I was making in my post was that if we have other means, we should choose basis, since I know I will die at 80, I do not need higher monthly income at the expense of lower bequest.

For 3, yes, more options with stronger financial means. Choose whatever also ok. Can bequest other assets to love ones and bequest CPF money to the common pool.

 

[BBCWatcher]

I remember someone shared before he opted for basic and then a number of years later changed to standard and monthly payout increased. Can't remember which thread and which poster mentioned it.

The only plan switches I remember the CPF Board allowing were from any payout plan to the CPF LIFE Escalating Plan when it was introduced. That one-time offer has expired. I'm not aware of any general plan switching option.

(On edit: See below!)

For 1, if I know I will die before 80, I should choose basic plan isn't it? That way, I leave behind higher bequest. As for higher payout under SP, the extra I would have gotten is not meaningfully more as I will die at 80.

No, not if you have no heir or charity you care about. Bequests have no value to you after you die, and you have no beneficiary you even want to attempt to leave money to.

For 2, the point I was making in my post was that if we have other means, we should choose basis, since I know I will die at 80, I do not need higher monthly income at the expense of lower bequest.

Quite possible in that case.

For 3, yes, more options with stronger financial means. Choose whatever also ok. Can bequest other assets to love ones and bequest CPF money to the common pool.

It's not quite that simple. If for example you give away the difference between Standard and Basic payouts (which you can afford to do if you're even considering the Basic Plan), and if the recipient has a high return on his/her investments, then the higher monthly payout could be the smart play. It really depends on what the next best alternative (NBA) investment is for the recipient(s). CPF interest rates (and the life annuity contribution thereof) are not bad, but we can't really rule out individuals capable of substantially higher returns who can put the extra monthly payout to earlier, better use even to beat the CPF Basic Plan's larger but delayed bequest.

 

[qhong61]

I spent about one week in my free time reading from the start till the latest post. I think everyone has some valid points, be it pro higher monthly income or pro higher bequest. I agree with the point that 'higher' payout under standard plan vis-a-vis basis plan is not meaningful as it is not high enough. Assuming if I choose standard plan, I am contributing to the common pool at the expense of higher bequest to love ones and accordingly, I ought to be 'compensated' fairly with meaningful higher monthly payout. Perhaps due to actuary consideration this cannot be done but it does make choosing standard and escalating plan a hard choice.

Right now we still have the option of choosing basic plan, where the interest earned in our RA go back to our RA as oppose going to the common pool under standard and escalating plan. Very clearly, if we know we are going to die before 80, we should opt for basic plan. I think we shouldn't be prejudicial against people who inclined to opt for basis plan if their life expectancy is short, as long as they have a Plan B, in case they live beyond 90 years old as they would have absolutely zero monthly income if they have been depending on CPFL basis plan solely. Maybe one day this option will be taken away if the money in the common pool not enough to meet the objective of CPFL? This can happen if people choose basic plan overwhelmingly and/or everyone live until 120.

Personally, if I have other financial resources, I will not go for standard/escalating plan. I think it is fair that if I don't want to contribute to the common pool, then I must ensure that I can take care of myself beyond 90 once my basis plan payout exhausted. I am not quite decided yet but as of now, standard and escalating plan is out. I project that with other financial resources available to me at my disposal, I should be fine, if God willing.

At the ndp yesterday, got one 100yo ah ma.

 

[royalmix]

Oh ok. I think I got confused with the RSS. Then more reason to choose basis especially if ones have other Financial means.

With Basic Plan, when you start to get payout from the CPF Life Pool after 90 (those are your monies), the mthly payout is likely to drop a little, but if you know how to "hack", it should not drop. Otherwise, it will continue to drop year after year, a little a little. Your monies in the CPF Life Pool should be exhausted by about 93 (there abouts, I forgotten liao), then you live on other people's monies from the CPF Life Pool. I never think that far

I have plenty of other sources of income to feed me, I dun need CPF Life to feed me, so Basic Plan is good enough!

Just dun be like the Americans, I recently read a news, they give away their monies when alive/younger, then struggle to survive on less funds during their golden years, no backup/contingency plan/reserves!

 

[BBCWatcher]

With Basic Plan, when you start to get payout from the CPF Life Pool after 90 (those are your monies), the mthly payout is likely to drop a little, but if you know how to "hack", it should not drop.

Well, the "hack" involves money: either injecting some, or maintaining some on account. It's not a free hack.

Just dun be like the Americans, I recently read a news, they give away their monies when alive/younger...

You say that like a bad thing. Aren't gifts better for beneficiaries, to get more money sooner (and on a predictable schedule)?

 

[royalmix]

Well, the "hack" involves money: either injecting some, or maintaining some on account. It's not a free hack.

Not true, people just need to think deeply! Nothing new, it had been shared many times here!

You say that like a bad thing. Aren't gifts better for beneficiaries, to get more money sooner (and on a predictable schedule)?

Well, the news imply it is bad strategy, not me, but I concur! Bad for giver, good for receiver, giver suffer in the end, kpkb in the news!

I have a different tradition or practice or expectations, we are different! Every year, during cny, I give, during special occasions I give, but not give away my wealth!

 

[BBCWatcher]

Not true, people just need to think deeply! Nothing new, it had been shared many times here!

I stand by my description.

If your CPF accounts are depleted the bonus interest won't accrue, and your CPF LIFE Basic Plan payout will "burble" (fall slightly) due to the way the CPF Board has designed that legacy payout plan. You can either add funds or maintain funds if you don't like the "burble." Either way it's money: more you add, or more you keep on account.

Well, the news imply it is bad strategy, not me, but I concur! Bad for giver, good for receiver, giver suffer in the end, kpkb in the news!

Given there are lots of people in this thread apparently maniacally focused on bequests I don't see why gifts would be considered bad. Quite the opposite. Gifts are early bequests. Earlier is obviously better for the recipient(s).

I have a different tradition or practice or expectations, we are different! Every year, during cny, I give, during special occasions I give, but not give away my wealth!

Well that's clearly worse for the prospective recipients, that you aren't giving them more wealth (or all of it) sooner. Today, for example.

 

[royalmix]

I stand by my description.

If your CPF accounts are depleted the bonus interest won't accrue, and your CPF LIFE Basic Plan payout will "burble" (fall slightly) due to the way the CPF Board has designed that legacy payout plan. You can either add funds or maintain funds if you don't like the "burble." Either way it's money: more or you add, or more you keep on account.

I will not teach you cos you are escalating plan, dun waste my time!

Given there are lots of people in this thread apparently maniacally focused on bequests I don't see why gifts would be considered bad. Quite the opposite. Gifts are early bequests. Earlier is obviously better for the recipient(s).

Well that's clearly worse for the prospective recipients, that you aren't giving them more wealth (or all of it) sooner. Today, for example.

we are different, bequest is normal and not bad, dun change the subject matter. we are different, I am chinese true blue singaporean, you are US person, fullstop, dun waste my time. I am out!

 

[Oldnerd79]

I'm definitely going for basic but not sure whether FRS or ERS, what are the benefits of going for ERS? Isn't it the same since the excess amount if u keep it in SA also earns the same interest(4%)? And u have flexibility to withdraw. And also don't lose out as much interest to the pool on the 15% premium paid to CPF life?
Say If I know I'm going to die at 80, FRS basic or ERS basic better?

I know one good point to argue for ERS is nowadays there are scammers around so lock up in ERS will be safer. Other than that what r the benefits?

 

[DevilPlate]

I'm definitely going for basic but not sure whether FRS or ERS, what are the benefits of going for ERS? Isn't it the same since the excess amount if u keep it in SA also earns the same interest(4%)? And u have flexibility to withdraw. And also don't lose out as much interest to the pool on the 15% premium paid to CPF life?
Say If I know I'm going to die at 80, FRS basic or ERS basic better?

I know one good point to argue for ERS is nowadays there are scammers around so lock up in ERS will be safer. Other than that what r the benefits?

The general idea is to do SA shielding and then top up yr RA using Cash to ERS.

So if u are confident alternatives like Reits can give u better returns vs RA 4%, then keep it at FRS.

Or, u do not have much excess cash to begin with, then dont top up.

 

[dork32]

I'm definitely going for basic but not sure whether FRS or ERS, what are the benefits of going for ERS? Isn't it the same since the excess amount if u keep it in SA also earns the same interest(4%)? And u have flexibility to withdraw. And also don't lose out as much interest to the pool on the 15% premium paid to CPF life?
Say If I know I'm going to die at 80, FRS basic or ERS basic better?

I know one good point to argue for ERS is nowadays there are scammers around so lock up in ERS will be safer. Other than that what r the benefits?

how you know you die at 80? if you die at 95 you will continue to get the payout even though you have nothing left in the ra

 

[Oldnerd79]

The general idea is to do SA shielding and then top up yr RA using Cash to ERS.

So if u are confident alternatives like Reits can give u better returns vs RA 4%, then keep it at FRS.

Or, u do not have much excess cash to begin with, then dont top up.

But if I already doing shielding for SA and can fund FRS from OA alone, why top up to ERS using cash?

 

[Oldnerd79]

how you know you die at 80? if you die at 95 you will continue to get the payout even though you have nothing left in the ra

Unlikely to live past 80 given health condition and family history. I can go for ERS but want to know if there are really any benefits? No right?only if live long

 

[sohguanh]

Unlikely to live past 80 given health condition and family history. I can go for ERS but want to know if there are really any benefits? No right?only if live long

dork32 did reveal his side history all long family lives. I just finish another funeral father sister gone at age 64. Mandai Crematorium every 15 mins funeral car and tour bus come in. Burning chambers working OT and mine is 7.30 pm burn very jam like Causeway jam.

 

[final1]

If you can, BRS only.

At 55, take out all you can before rules change (who knows - it can happen) and do your own investment.

Obviously, when you are old-er at that age, dont get scammed by ATB and dont dump it on booze/drugs/pros/you name it.

 

[DevilPlate]

dork32 did reveal his side history all long family lives. I just finish another funeral father sister gone at age 64. Mandai Crematorium every 15 mins funeral car and tour bus come in. Burning chambers working OT and mine is 7.30 pm burn very jam like Causeway jam.

so what if u suay suay live till 90?

 

[DevilPlate]

But if I already doing shielding for SA and can fund FRS from OA alone, why top up to ERS using cash?

ofc if u know how to invest yr cash to get better returns, then u can even try to opt for BRS

 

[item2sell]

so what if u suay suay live till 90?

what if kenna Toto at 88 yo

what if have inheritance at 88yo

what if kid become PM

what if meteor hit us.

what if what if what if. Then you wasted living Liao

 

[magicming]

I'm definitely going for basic but not sure whether FRS or ERS, what are the benefits of going for ERS? Isn't it the same since the excess amount if u keep it in SA also earns the same interest(4%)? And u have flexibility to withdraw. And also don't lose out as much interest to the pool on the 15% premium paid to CPF life?
Say If I know I'm going to die at 80, FRS basic or ERS basic better?

I know one good point to argue for ERS is nowadays there are scammers around so lock up in ERS will be safer. Other than that what r the benefits?

Depends on
1. how much money u have in OA/cash.
2. how good you are at managing this money to get good returns.
3. How secure u need to feel.


since I’m not good at investing and I do like to feel secure, and I do have spare cash, I topped up the extra $100k or so, to reach ERS. So will get at least $2k payout per month. Enough for a basic retirement. BUT since I now feel secure enough, I’ve stopped topping up every year.