FRS vs ERS

[BBCWatcher]

If CPF LIFE is so awful for you, why don’t you go buy a private life annuity and opt out of CPF LIFE? You’re 100% free to do that.

You have choices, lots of them. Make them as you see fit.

 

[henrylbh]

The brain is blocked. There is only one way and practically everyone wins

Funny things, you put in 417K into your RA, after 16 years, I drawout 2.1k a month for 16 years total $403k. Sound legit, suddenly you convenient forget the interest gain over 16 years.EffectiVely, you would have $240k
balance in your RA. This balance goes into LIF, and it is a good investment?

My statement was not referring to you.

Now you telling me or asking me about your numbers?

Anyway you need to accept that CPFB already mentioned that if you choose basic plan, your RA (after deduction of annuity premium) plus attributable interest would last close to age 90. Where the 16 years come into picture?

 

[kelhot2001]

My statement was not referring to you.

Now you telling me or asking me about your numbers?

Anyway you need to accept that CPFB already mentioned that if you choose basic plan, your RA (after deduction of annuity premium) plus attributable interest would last close to age 90. Where the 16 years come into picture?

Nah, not referring to you la, you are the "enlightened" one

 

[kelhot2001]

If CPF LIFE is so awful for you, why don’t you go buy a private life annuity and opt out of CPF LIFE? You’re 100% free to do that.

You have choices, lots of them. Make them as you see fit.

I am almost certain to do so with private annuity, of course having say that, I do plan to opt out at age 69. That is to fully utilise what CPF suppose to do.

I am here to enlighten others about the short-change CPF life against longevity as per our govt statistics, in the end it will be their choice

 

[henrylbh]

I am almost certain to do so with private annuity, of course having say that, I do plan to opt out at age 69. That is to fully utilise what CPF suppose to do.

I am here to enlighten others about the short-change CPF life against longevity as per our govt statistics, in the end it will be their choice

You got in mind a private annuity plan that's better than CPF Life? Otherwise, no possible to op out.

 

[kelhot2001]

You got in mind a private annuity plan that's better than CPF Life? Otherwise, no possible to op out.

Last week I was writing in to CPF to ask more about the requirement for private annuity. I am not interest in betting with CPF life, your bet to lose is 70% against 30%. The odds is worse than blackjack in MBS, lol

 

[henrylbh]

Last week I was writing in to CPF to ask more about the requirement for private annuity. I am not interest in betting with CPF life, your bet to lose is 70% against 30%. The odds is worse than blackjack in MBS, lol

Don't waste time writing. If want definite answer, choose a plan and then ask the board whether that plan is acceptable in lieu of CPFL. Bet there is no current plan in the market that's similar or better than CPFL

Only exit is to quit the country and try to come back later, if possible and you still like it here

To me, there is no place like Singapore when you are old and not so mobile.

 

[lifeafter41]

Doing that, topping up to ERS means you you cannot withdraw the topup and interest even if you decide to do BRS

Or even if you do FRS, interest from ERS is not withdrawable

Thanks!!
I had this impression that by topping up to ERS at 55 years old and 2 Weeks.
Go for FRS or BRS at age 65, and withdraw the rest.

Seems or is now a far fetch dream Liao.

 

[kelhot2001]

Don't waste time writing. If want definite answer, choose a plan and then ask the board whether that plan is acceptable in lieu of CPFL. Bet there is no current plan in the market that's similar or better than CPFL

Only exit is to quit the country and try to come back later, if possible and you still like it here

To me, there is no place like Singapore when you are old and not so mobile.

Let see what we can do, the worst case is to do BRS and leave everything in SA,this is to ensure your losses is to the minimum

Nah, I am not a quitter, Singapore is my homeland, one thing I detest most are those cpf supporter asking you to quit Singapore. I meant who the hell are you trying to teach me how to live my life.

I am definitely staying lol

 

[kelhot2001]

Thanks!!
I had this impression that by topping up to ERS at 55 years old and 2 Weeks.
Go for FRS or BRS at age 65, and withdraw the rest.

Seems or is now a far fetch dream Liao.

You can try FRS and and earn all your monies by 65, and then withdraw them once you earn enough interest, lol

My warning to those who think of topping up and go ERS or std and escalating plan, it is only worthwhile if you live up to 91 years old.

But if you belong to the 70% who be dead before 90, you definite lose alot of monies Into the pool instead to your kids

 

[kelhot2001]

I like the way u explain the concept in another way, but yet still people dun get it

As "consultants", regardless of how good or bad a "client" expresses himself, be it in writing or verbal, we have to try our best to understand and seek clarifications to help out. Singaporeans learnt how to understand singlish or accept others who cannot write well and how to interprete or seek clarifications.

If really so bad and cannot understand, then just ignore or seek clarifications, or wait for clarity. I dun respond to every single post, I choose what I like to respond to, be it right or wrong. We dun have to be last to post to win or wait for confirmation/assurance

If we are only interested in Basic Plan, just ignore the rest, otherwise it would become another "broken record" again

(past 2 weeks, when I sense the other party cannot understand despite my detailed explanations and going into "chicken and duck debate", I stop posting. Just giveup)

Maybe I should start a cpf thread to warn the pitfall of cpf life and let people understand what they are risking against what they stand to gain

 

[henrylbh]

You can try FRS and and earn all your monies by 65, and then withdraw them once you earn enough interest, lol

My warning to those who think of topping up and go ERS or std and escalating plan, it is only worthwhile if you live up to 91 years old.

But if you belong to the 70% who be dead before 90, you definite lose alot of monies Into the pool instead to your kids

Even 91 not enough!!!

If previous RSS is getting the same payout as CPF Life basic plan, it would be about 100 years old to exhaust RA and about 94 for standard plan .... according to my calculations.

 

[henrylbh]

Let see what we can do, the worst case is to do BRS and leave everything in SA,this is to ensure your losses is to the minimum

What's the likelihood of losing when practically everyone wins

How to leave everything in SA? You can opt for BRS when RA is created and money is taken out of RA and can't go back to SA.

 

[tangent314]

Last week I was writing in to CPF to ask more about the requirement for private annuity. I am not interest in betting with CPF life, your bet to lose is 70% against 30%. The odds is worse than blackjack in MBS, lol

In a casino, or making a bet, you cannot simply looking at your chances of winning. You will also need to look at the payouts for winning vs the bet size. Even if the odds of winning a particular bet is only 30%, it is still better to take that bet if your payout is more than 7/3x the bet size. Similarly if the odds of winning the bet is 70%, it is not a good idea to take the bet if the payout is less than 3/7x your bet.


The cost of paying out annuities to someone grows exponentially with their life expectancy, so it's perfectly correct that there are less than half of these people.

 

[Mecisteus]

Maybe I should start a cpf thread to warn the pitfall of cpf life and let people understand what they are risking against what they stand to gain

Oh NOOO.

We got enough of discussion on CPF Life.

Please don't add more.

 

[kelhot2001]

In a casino, or making a bet, you cannot simply looking at your chances of winning. You will also need to look at the payouts for winning vs the bet size. Even if the odds of winning a particular bet is only 30%, it is still better to take that bet if your payout is more than 7/3x the bet size. Similarly if the odds of winning the bet is 70%, it is not a good idea to take the bet if the payout is less than 3/7x your bet.


The cost of paying out annuities to someone grows exponentially with their life expectancy, so it's perfectly correct that there are less than half of these people.

I beg to differ

Math cannot lie because logic is always there. let use a simpler example for you. I had invested $50K from my SA account many years back and now it is worth 100K. Excluded that, I now have 120K in my SA, of which I am taking $80K to invested for a short period

SA-invested $181,000.00. Now next year I am 55, I dump all my OA and balance SA into new newly created RA to form FRS of $181,000.00. Then I refund all my investment back to SA. So now,

SA = $181,000.00, RA = $181,000.00
Age 65, now my SA = $278,000.00, RA = $278,000 (For calculation sake, let assume it is possible)

Now for the draw down using CPF life estimator, I will use the lower end of Standard withdrawal of $1400.00 pr month for the rest of my life. Using

https://www.bankrate.com/calculators/investing/annuity-calculator.aspx

I calculate at $1400.00 p/mth, my SA account will last me till 93 years old based on interest at 4.3 percent.

Now let assume I live to 100 years old with additional 84 mth of payout

$1400x84 mths = $117,600.00 (additional payout till age 100)
$1400x108 mth = $151,200.00 (additional payout till age 102)

Your argument of exponential payout failed
Your risk of losing $159,000.00 at 81 ( Based on the remainder I had in my SA) against additional $117,600 at age 100 or $151,000.00 at age 102

The losing bargain

1)You need to risk from 65 to 93 which is 28 years without dying against additional 8 years of additional payout after the 28 years
2)You need to risk $159,000.00 against winning $117,600
3) You know the odds that 70 over more percent will be dead at 93 against 20 over percent alive
4) There is no exponential is the calculation, the amount you put in to bet is more than the amount you can gain
5) The male life expectancy is at 81 years of age today. This made your risk increase exponentially in dying younger
6) the rate of death of male and female is 66:34, this again increase your risk exponentially
7)At any point of dead before 91, I always have an bequest as compare to Std withdrawal plan which will be zero at 81
8)BTW, the percentage of alive at 100 in 2 % or 0.007% for males

Now that I calculated, I still find the MBS odds better

 

[Opps-gal]

So what's the conclusion? Which plan is best for people who is not sure when to die? With kids to pass to also?

 

[BBCWatcher]

Anyway you need to accept that CPFB already mentioned that if you choose basic plan, your RA (after deduction of annuity premium) plus attributable interest would last close to age 90. Where the 16 years come into picture?

For some strange reason(s) kelhot2001 is upset when, after taking a hammer and bashing his/her head with it, he/she has a headache.

Yes, if you want to try to maximize a non-guaranteed residual, and if you then make two choices (age 65 payout start, Standard Plan) that run counter to your residual aspirations, then die years earlier than the median Singaporean, you will end up with a hammer/headache situation of your own choosing. (A mild headache, though — you could have chosen Hyflux bonds or shares instead, i.e. a sledgehammer.)

What an odd thing to complain about. If you don’t like that particular combination, no problem, choose a different combination — it’s your choice. As CPF itself tells you in all its advisory CPF LIFE publications.

Generally speaking, I don’t think you should try to maximize a CPF LIFE residual. If you merely live long enough, your CPF LIFE residual falls to zero no matter what choices you make. I think it’s better to use something else (MediSave for example) to defend and to preserve a particular residual, if that’s what you want to do. But you’re free to make other choices.

 

[kelhot2001]

So what's the conclusion? Which plan is best for people who is not sure when to die? With kids to pass to also?

LOL, there is no conclusion on this, if you are a not risk taker, and think that you probably wont live by 89, and want to minimise losses in case you pass on before 90 , the 2 solutions

1) BRS plan at 55
2) basic withdrawal at 65
3) Keep the rest at SA (using shielding method)

your losses with be on premium interest say your BRS at $90,500, premium let take the max at 20% which is 19K, if you suay suay pass on at 89, your losses on interest will be around $30,000.00

 

[henrylbh]

So what's the conclusion? Which plan is best for people who is not sure when to die? With kids to pass to also?

Just pray and toss a coin when reaching 65, if still don't know which argument is convincing.