FRS or ERS?

[Guojing88]

With all the scams going on, ERS becomes a better deal!

 

[crimsontactics]

ERS or BRS, there are no losses. there are gains (or at least breakeven). percentage gain for ers is lower than frs which is lower than brs.

The average person loses out financially from CPF Life since the breakeven age is 90...

 

[crimsontactics]

That's not a reliable plan. How do you travel to Thailand for medical care if you're incapacitated or otherwise unfit for travel? If (as one of many examples) your appendix bursts you're not going to wait for the lower fare on Scoot to Bangkok next week.

Retirement plans should be realistic if they're going to be viable.

"Lose more money than FRS"? That doesn't make any logical sense. Each additional RA dollar from FRS to ERS yields exactly the same life annuity output as each additional RA dollar from BRS to FRS.(*) If you believe that you're losing money then (by that logic) you'd choose BRS-level CPF LIFE. Or even opt out of CPF LIFE completely by buying (if you don't already have one) a qualifying alternative life annuity.

(*) Possibly a little better depending on the assumptions you make about your other CPF account balances, bonus interest, and payout plan selection.

The average person loses out financially in CPF Life since the breakeven age is 90...

 

[DevilPlate]

The average person loses out financially from CPF Life since the breakeven age is 90...

So u also dont buy any other insurance? All lose out if u dont make a claim

 

[dork32]

The average person loses out financially from CPF Life since the breakeven age is 90...

What do you mean breakeven, breakeven against what?

90 is not the break even age. 90 is the age that you withdraw everything that you have if you are on basic.

lets say you die at 85, have you lost? to me no. the money is given to your kids, is that a loss?

lets say you bto at 35. you flat can last till your are 134. if you die at 80, you lose? no, the house is given to your kids.

 

[DevilPlate]

What do you mean breakeven, breakeven against what?

90 is not the break even age. 90 is the age that you withdraw everything that you have if you are on basic.

lets say you die at 85, have you lost? to me no. the money is given to your kids, is that a loss?

lets say you bto at 35. you flat can last till your are 134. if you die at 80, you lose? no, the house is given to your kids.

I think he meant lose out on the “10%” paid to the pool.

 

[crimsontactics]

So u also dont buy any other insurance? All lose out if u dont make a claim

Yeap...

Thats the whole point of insurance...

Chiu pay money for peace of mind...

 

[crimsontactics]

What do you mean breakeven, breakeven against what?

90 is not the break even age. 90 is the age that you withdraw everything that you have if you are on basic.

lets say you die at 85, have you lost? to me no. the money is given to your kids, is that a loss?

lets say you bto at 35. you flat can last till your are 134. if you die at 80, you lose? no, the house is given to your kids.

On basic, you lose 10% to the pool mah...

 

[DevilPlate]

Yeap...

Thats the whole point of insurance...

Chiu pay money for peace of mind...

Normally we buy insurance to protect our dependents/loved ones.

 

[crimsontactics]

Normally we buy insurance to protect our dependents/loved ones.

True...

So CPF Life ish an insurance which most of us will lose money on in exchange for a better peace of mind...

 

[royalmix]

So u also dont buy any other insurance? All lose out if u dont make a claim

False, my insurance I make if I dun claim, my beneficiaries make more if there is a claim!

On basic, you lose 10% to the pool mah...

This young man is not only savvy with his CPF monies, he is very savvy on CPF Life too!

Basic Plan pays 10-20% as CPF Life Premiums, so you lose 4%pa compounded on this Premium from the time you join CPF Life until you die, unless you die after 93-94 (thereabouts). That is the cost of buying longevity insurance, recoverable if you live beyond 93-94 for Basic Plan.

If you have ERS, the CPF Life Premium will be a bigger sum, so you pay more cost of insurance to "guarantee" a bigger payout!

 

[magicming]

True...

So CPF Life ish an insurance which most of us will lose money on in exchange for a better peace of mind...

Exactly.

since more or less all have to do, it is a kind of tax. We pay for security, peace of mind. Generally we will lose money. Since the interest on our CPF life goes to the pool. The main winner is the govt. but they are a very clever govt, so deserve to win, lor. And richer tax payers. Who might otherwise have to pay more taxes to fund govt help.

 

[sohguanh]

Exactly.

since more or less all have to do, it is a kind of tax. We pay for security, peace of mind. Generally we will lose money. Since the interest on our CPF life goes to the pool. The main winner is the govt. but they are a very clever govt, so deserve to win, lor. And richer tax payers. Who might otherwise have to pay more taxes to fund govt help.

A bit side track but just to comment this Spore govt is very smart aka pandai which is why over the years our SGD is strong and we have nil net debt (https://www.mof.gov.sg/docs/default...-the-singapore-government-heavily-in-debt.pdf).

In comparison to our Northern neighbor country with vast lands and natural resources but their MYR depreciate forever. They also have a lot of national debts which I doubt can be repay back in a single generation. They have our CPF equivalent called EPF but theirs much more relaxed easier to take out all/partial at 50 , 55. No such rubbish like RA , ERS , FRS concept. And they still retain the pension scheme for their govt employees. Imagine you retire can get every month half pay and also pay almost zero cost govt medical fees. My spouse sister is a teacher retiring soon. So shiok shake leg every month got half-pay. Monies must come from the govt from somewhere and the debt keep on growing year after year.

 

[magicming]

A bit side track but just to comment this Spore govt is very smart aka pandai which is why over the years our SGD is strong and we have nil net debt (https://www.mof.gov.sg/docs/default...-the-singapore-government-heavily-in-debt.pdf).

In comparison to our Northern neighbor country with vast lands and natural resources but their MYR depreciate forever. They also have a lot of national debts which I doubt can be repay back in a single generation. They have our CPF equivalent called EPF but theirs much more relaxed easier to take out all/partial at 50 , 55. No such rubbish like RA , ERS , FRS concept. And they still retain the pension scheme for their govt employees. Imagine you retire can get every month half pay and also pay almost zero cost govt medical fees. My spouse sister is a teacher retiring soon. So shiok shake leg every month got half-pay. Monies must come from the govt from somewhere and the debt keep on growing year after year.

Exactly. Thanks for the insight. SOMEONE will have to pay. I guess this CPF LIFE thing is ok. We pay for ourselves. And got some degree of flexibility. My only gripe is Singapore as a country is very rich, maybe LESS responsibility should be shifted to us as individuals.

 

[sohguanh]

Exactly. Thanks for the insight. SOMEONE will have to pay. I guess this CPF LIFE thing is ok. We pay for ourselves. And got some degree of flexibility. My only gripe is Singapore as a country is very rich, maybe LESS responsibility should be shifted to us as individuals.

CPF Life penalize ppl who got short life and I posted this quite a few times already. They just assume average is most ppl live longer so policies are designed based on that. They do not cater options for ppl who have short life especially those with family history of short lives. We get the shortened end of the stick very rugi. Don't spew crap like your monies can give offspring spend that is separate topic IMO.

 

[Okenba]

I think he meant lose out on the “10%” paid to the pool.

If I recall right, there is no 10% lost to the pool.
If you pass on before paying out whatever you put into the pool, whatever is left is paid out as bequest.

What you lose out on is the potential interest that you could have earned if that amount was not in the pool.
People like to take this interest as 4%, but for some, the amount that they put into RA would have been taken out of OA instead of SA, so maybe 2.5% might be a fairer number?
Some might argue that they could have invested it themselves and made more, so more than 4% would be fair to them.

If you remove interest earned, you lose nothing.

 

[crimsontactics]

False, my insurance I make if I dun claim, my beneficiaries make more if there is a claim!

This young man is not only savvy with his CPF monies, he is very savvy on CPF Life too!

Basic Plan pays 10-20% as CPF Life Premiums, so you lose 4%pa compounded on this Premium from the time you join CPF Life until you die, unless you die after 93-94 (thereabouts). That is the cost of buying longevity insurance, recoverable if you live beyond 93-94 for Basic Plan.

If you have ERS, the CPF Life Premium will be a bigger sum, so you pay more cost of insurance to "guarantee" a bigger payout!

Thank chiu Bro royalmix!

 

[crimsontactics]

Exactly.

since more or less all have to do, it is a kind of tax. We pay for security, peace of mind. Generally we will lose money. Since the interest on our CPF life goes to the pool. The main winner is the govt. but they are a very clever govt, so deserve to win, lor. And richer tax payers. Who might otherwise have to pay more taxes to fund govt help.

Yeap, most of us would lose money in CPF Life Bro magicming...

 

[BBCWatcher]

The average person loses out financially in CPF Life since the breakeven age is 90...

What do you mean breakeven, breakeven against what?

Dork32 asks the right question here. I'll ask it a little differently: what specific, alternative, available investment or savings vehicle are you suggesting in the alternative?

Comparisons against actually available alternatives? OK, let's take a look!

 

[DevilPlate]

CPF Life penalize ppl who got short life and I posted this quite a few times already. They just assume average is most ppl live longer so policies are designed based on that. They do not cater options for ppl who have short life especially those with family history of short lives. We get the shortened end of the stick very rugi. Don't spew crap like your monies can give offspring spend that is separate topic IMO.

then u go for BRS lor since u know u gona die earlier else lugi.

Do u have any contingency plans if u live past let say 70yo how?