FRS vs ERS

[foozgarden]

in cases where there is no need to subscribe for CPF life (due to parent's age before they made it compulsory).. i guess, its better not to choose it then?
just leave it in OA/SA, and like someone said, use it as a on-demand savings acct, with high 4-5% interest

 

[BBCWatcher]

in cases where there is no need to subscribe for CPF life (due to parent's age before they made it compulsory).. i guess, its better not to choose it then?

You cannot assume that.

 

[henrylbh]

You are not required to withdraw excess funds. If you do withdraw funds, you can withdraw eligible funds at any time, fully or partially. If partially, you can withdraw any partial amount as often as you like.

In other words, excess funds become just like an on demand savings account when you reach age 55. A very high interest savings account with AAA rated Singapore government backing. The smart play is to leave those funds right where they are if you don't need them for immediate consumption needs and you don't have other, lower yielding funds available.

If you are clearing elnewbi doubt, i think you misunderstood him.

 

[lzydata]

in cases where there is no need to subscribe for CPF life (due to parent's age before they made it compulsory).. i guess, its better not to choose it then?
just leave it in OA/SA, and like someone said, use it as a on-demand savings acct, with high 4-5% interest

Then the choice would be whether to opt into CPF LIFE or go with the older Minimum Sum Scheme where payouts end after 20 years. CPF LIFE is for the longevity risk.

 

[a4973]

Are we even given a choice to choose cpf life or min sum scheme?

 

[lzydata]

Are we even given a choice to choose cpf life or min sum scheme?

Birth year 1957 and earlier: You can apply to join CPF LIFE any time before you turn 80, or you can remain on the Retirement Sum Scheme.

Between 1 January 1958 and 30 April 1961:
If you have at least $40,000 in your Retirement Account (RA) at 55 or at least $60,000 in your Retirement Account at 65, you will be placed on CPF LIFE.

1 May 1961 onwards:
If you have at least $60,000 in your Retirement Account at 65 you will be placed on CPF LIFE

If you are not placed on CPF LIFE, you can apply to join CPF LIFE before you turn 80 or remain on the Retirement Sum Scheme.

https://www.cpf.gov.sg/Members/Schemes/schemes/retirement/retirement-sum-scheme

 

[a4973]

So DOB 1 Jan 58 onwards is Auto place on cpf Life, no choice right?

 

[lzydata]

So DOB 1 Jan 58 onwards is Auto place on cpf Life, no choice right?

Correct. The reason I talked about choice earlier was because the person said "due to parent's age before they made it compulsory". Only applies to older folks.

 

[Wood41]

Isn't great to have CPF life ?
Average Sinkies live until 80s.
It gives $$ for the next 15-20 years instead of
'taxing' your kids .

 

[dork32]

Isn't great to have CPF life ?
Average Sinkies live until 80s.
It gives $$ for the next 15-20 years instead of
'taxing' your kids .

the old minimum sum scheme also gives $$ for 20 years

 

[elnewbie]

Yes the old min sum scheme pays out till age 85-87 depending on 1st drawdown. This CPF Life scheme is a thinly veiled fraud where responsible people have to subsidize the irresponsible, like the guy who blew $147k of his RA in 5 mths (yesterday's ST)

the old minimum sum scheme also gives $$ for 20 years

 

[henrylbh]

Isn't great to have CPF life ?
Average Sinkies live until 80s.
It gives $$ for the next 15-20 years instead of
'taxing' your kids .

What so great about CPF Life? It's a bet that all are forced into.

The old min sum scheme is calculated to exhaust one's RA in 20 years. So if you are 65, your payout from RA will last to about 85. And under this scheme, the payout is much higher than CPF Life which is for life.

The last cohort before CPF Life will get monthly payout of $1,240 with min sum of $139,000. Under CPF Life you need min sum of $166,000 to get similar payout.

 

[badsector]

CPF should revive min sum scheme!!!

 

[lzydata]

Currently life expectancy for 65 year olds is 20 more years i.e. half of the people will live up to 85 and the other half beyond 85. Go back to the Minimum Sum Scheme, and half the people will outlive their money. Maybe you think you are luckier and smarter with your money and so that will not happen to you, but the system exists so everyone is in it together and everyone is protected.

 

[Wood41]

Then why do they change the name to CPF Life ?

the old minimum sum scheme also gives $$ for 20 years

 

[henrylbh]

Currently life expectancy for 65 year olds is 20 more years i.e. half of the people will live up to 85 and the other half beyond 85. Go back to the Minimum Sum Scheme, and half the people will outlive their money. Maybe you think you are luckier and smarter with your money and so that will not happen to you, but the system exists so everyone is in it together and everyone is protected.

With CPF Life of 166k, the average payout is 1330 for life. With this payout, one will only breakeven about 92 yo plus. If cannot breakeven means ???

If old scheme remains, 166k with same payout will last till 92 yo Oct. Not enough?

 

[BBCWatcher]

With this payout, one will only breakeven about 92 yo plus.

1. In your alternate irreality, what happens to people you live past 92? Destitution?

2. There has never been a guarantee of 4+ percent RA/SA interest. (Although any above market interest and tax reliefs boost member savings going into CPF LIFE.) So why are you assuming there's such a rate guarantee?

CPF LIFE guarantees lifetime income.

 

[henrylbh]

1. In your alternate irreality, what happens to people you live past 92? Destitution?

2. There has never been a guarantee of 4+ percent RA/SA interest. (Although any above market interest and tax reliefs boost member savings going into CPF LIFE.) So why are you assuming there's such a rate guarantee?

CPF LIFE guarantees lifetime income.

How real you want it to be? 100, 120 or eternity? 92 not good enough? If not good enough, then lower the payout and it can go on to whatever age you want or even eternity.

 

[Mecisteus]

How real you want it to be? 100, 120 or eternity? 92 not good enough? If not good enough, then lower the payout and it can go on to whatever age you want or even eternity.

Already told you everyone must lose. Provider must win. This is how insurance works.

 

[subprimelive]

Isn't great to have CPF life ?
Average Sinkies live until 80s.
It gives $$ for the next 15-20 years instead of
'taxing' your kids .

What if my advisor recommend other annuity better than cpf life?