Full retirement sum trend

[OngHuatHuat]

Current projection is till 2020, every year rise around 5000 but percentage wise, it is decreasing due to larger base.

Will the government shift goal post after 2020?
Is there an election next year?

 

[starlight318]

Once you hit the FRS, the contributions from employment income and yearly interests will definitely be enough to cover the yearly adjustment of the FRS. I just hit FRS in Jan this year, my SA is projected to increase by about 8% every year. As the base grows bigger, the percentage of increase of the SA balance will likely go down but if the FRS is only going to increase by 3% every year on average should be very safe.

 

[LiteHouse]

Once you hit the FRS, the contributions from employment income and yearly interests will definitely be enough to cover the yearly adjustment of the FRS. I just hit FRS in Jan this year, my SA is projected to increase by about 8% every year. As the base grows bigger, the percentage of increase of the SA balance will likely go down but if the FRS is only going to increase by 3% every year on average should be very safe.

What's your age this year?

 

[BBCWatcher]

Will the government shift goal post after 2020?

I'm not sure what you mean. CPF has raised the Full Retirement Sum every year for a long time. It's reasonable to forecast that the FRS will continue to increase.

The last (2014) CPF Advisory Panel explained their logic in their report (direct link). See Recommendations 6 and 7, starting on page 10.

Briefly, the Advisory Panel recommended that the BRS/FRS/ERS be adjusted annually in line with long-term inflation (10 year and 20 year retrospective measures) plus an uplift to account for general increases in standards of living. They also recommended 3% through 2020, which is exactly what's happening. And they recommended advance notice of any further changes, so as we get closer to 2020 it's reasonable to expect an announcement.

I don't have the current 10 and 20 year inflation numbers at my fingertips, but they're down a bit. So if the government continues to follow its own logic from 2014, then I'd expect something like 2.5%/year BRS/FRS/ERS increases after 2020, assuming inflation rates don't change much.

If you're a CPF member you ought to be hoping for bigger rather than smaller increases. There's no obligation to meet these sums, and the higher they are the more opportunities you have to play the CPF game well.

 

[OngHuatHuat]

I meant will they raise it at a faster rate despite of lower inflation rate in Singapore.
I support the idea of annuity, but not at buying the idea of raising the annuity to an insane amount.

I'm not sure what you mean. CPF has raised the Full Retirement Sum every year for a long time. It's reasonable to forecast that the FRS will continue to increase.

The last (2014) CPF Advisory Panel explained their logic in their report (direct link). See Recommendations 6 and 7, starting on page 10.

Briefly, the Advisory Panel recommended that the BRS/FRS/ERS be adjusted annually in line with long-term inflation (10 year and 20 year retrospective measures) plus an uplift to account for general increases in standards of living. They also recommended 3% through 2020, which is exactly what's happening. And they recommended advance notice of any further changes, so as we get closer to 2020 it's reasonable to expect an announcement.

I don't have the current 10 and 20 year inflation numbers at my fingertips, but they're down a bit. So if the government continues to follow its own logic from 2014, then I'd expect something like 2.5%/year BRS/FRS/ERS increases after 2020, assuming inflation rates don't change much.

If you're a CPF member you ought to be hoping for bigger rather than smaller increases. There's no obligation to meet these sums, and the higher they are the more opportunities you have to play the CPF game well.

 

[Mecisteus]

Something is wrong with the numbers.

From 2003 to 2015, it takes 12 years to double. That is a rate of 6% pa.

Inflation is never that high.

 

[OngHuatHuat]

I think they mentioned before initially the rise was steeper to catch up with the current living standard of singaporeans.

Something is wrong with the numbers.

From 2003 to 2015, it takes 12 years to double. That is a rate of 6% pa.

Inflation is never that high.

 

[BBCWatcher]

I meant will they raise it at a faster rate despite of lower inflation rate in Singapore.

Again, if the government continues to follow the logic in the CPF Advisory Panel's most recent report, no.

I support the idea of annuity, but not at buying the idea of raising the annuity to an insane amount.

That's not an actual, real world problem. Nobody is going to be living lavishly on a BRS level CPF LIFE payout even if the BRS were to increase at 5%/year for the next decade. What an awfully strange idea, that $850/month (for example; that's roughly $150/month above current BRS level CPF LIFE payouts) is intolerably too much lifetime retirement income. That very notion is absurd. If you're awash in CPF funds then your minimum CPF LIFE participation level is the BRS, or perhaps a little lower. Which is not even in the same universe as "insane," except insanely low. (Raise your hand if you want to live in Singapore on $700/month. Any volunteers?)

You really do want the BRS/FRS/ERS to rise faster rather than slower, within reason (which it would be), because that allows you to profit more from the system. It gives you more runway for tax relief, more room for MA to SA spillovers, and more room for OA to SA transfers. And all of that means more interest accrued compounded more.

If the government decides to raise the BRS/FRS/ERS by 20%/year for a half decade or more -- not going to happen -- then get back to me.

 

[OngHuatHuat]

Actually I won’t rely entirely on cpf life because I have other sources of income too. Thinking of taking responsibility for my own retirement rather than rely on government to do it.

Again, if the government continues to follow the logic in the CPF Advisory Panel's most recent report, no.


That's not an actual, real world problem. Nobody is going to be living lavishly on a BRS level CPF LIFE payout even if the BRS were to increase at 5%/year for the next decade. What an awfully strange idea, that $850/month (for example; that's roughly $150/month above current BRS level CPF LIFE payouts) is intolerably too much lifetime retirement income. That very notion is absurd. If you're awash in CPF funds then your minimum CPF LIFE participation level is the BRS, or perhaps a little lower. Which is not even in the same universe as "insane," except insanely low. (Raise your hand if you want to live in Singapore on $700/month. Any volunteers?)

You really do want the BRS/FRS/ERS to rise faster rather than slower, within reason (which it would be), because that allows you to profit more from the system. It gives you more runway for tax relief, more room for MA to SA spillovers, and more room for OA to SA transfers. And all of that means more interest accrued compounded more.

If the government decides to raise the BRS/FRS/ERS by 20%/year for a half decade or more -- not going to happen -- then get back to me.

 

[antonpoh]

Current projection is till 2020, every year rise around 5000 but percentage wise, it is decreasing due to larger base.

Will the government shift goal post after 2020?
Is there an election next year?

How do gahmen expect the next generation to catch up with that amount?

 

[henrylbh]

I meant will they raise it at a faster rate despite of lower inflation rate in Singapore.
I support the idea of annuity, but not at buying the idea of raising the annuity to an insane amount.

Insane amount no good? Your payout will also be insane. Isn't that what you planning for in retirement? Let the government plan for you

When your CPF savings reached insane level, you got choice to balek kampong. I no choice. No good?

 

[Mecisteus]

Insane amount no good? Your payout will also be insane. Isn't that what you planning for in retirement? Let the government plan for you

When your CPF savings reached insane level, you got choice to balek kampong. I no choice. No good?

Now there are more PRs.

Maybe in future rules will change with regards to withdrawal of CPF once these PRs balek kampong.

 

[SBC]

Suspect rise will be steeper after 2020.

 

[henrylbh]

Now there are more PRs.

Maybe in future rules will change with regards to withdrawal of CPF once these PRs balek kampong.

Government should consider PRs, who do not want to convert to citizens within 10 years or so, as foreigners and hence no more CPF.

 

[BBCWatcher]

Government should consider PRs, who do not want to convert to citizens within 10 years or so, as foreigners and hence no more CPF.

Doesn't Singapore want new citizens who willingly and eagerly volunteer to become citizens? You seem to be suggesting that Singaporean citizenship so awful, so terrible that extreme pressure is required. Seriously?

 

[BBCWatcher]

Suspect rise will be steeper after 2020.

Why is that your forecast?

 

[tangent314]

Actually I won’t rely entirely on cpf life because I have other sources of income too. Thinking of taking responsibility for my own retirement rather than rely on government to do it.

Taking responsibility for your own retirement means looking at all the options and working out that the government's way is the best way.

 

[SBC]

Why is that your forecast?

6k to 8k rise per year.

 

[undiscern]

I am already at 2020 FRS. So, not giving a hoot about shifting goal post. 40yo.

Current projection is till 2020, every year rise around 5000 but percentage wise, it is decreasing due to larger base.

Will the government shift goal post after 2020?
Is there an election next year?

 

[henrylbh]

6k to 8k rise per year.

From 1 Jul 2015 to 1 Jan 2020, the increase is $5000 flat a year.

Last time from 1 Jul 1995 to 1 Jul 2003, it was $5000 flat a year.