New Cpf Life Calculation

[qhong61]

hilarious must everyone have a lifetime annuity? my dad does not have it, my grand dad does not have it. my uncles and aunties does not have it. all of them are well to do and did not end up as destitute as predicted.

cos we cannot depend on our children nowadays in old age.

 

[dork32]

cos we cannot depend on our children nowadays in old age.

who every said my dad depended on me. who said my uncles have to depend on their kids.

 

[qhong61]

who every said my dad depended on me. who said my uncles have to depend on their kids.

Then u must be very lucky.

 

[BBCWatcher]

must everyone have a lifetime annuity?

The overwhelming consensus view in developed (and some developing) countries is yes, retirees (and the disabled) should have at least a minimum, lifetime guaranteed income stream.

This consensus developed starting in 1881 when Germany's Chancellor, Otto von Bismarck, proposed that country's old age and disability social insurance system, adopted in 1889. Before Germany's public system, there were lifetime annuities for narrower segments of the population. For example, military pensions are very old. Among private sector employers, American Express introduced lifetime annuity pensions in 1875 for its employees.

 

[dork32]

The overwhelming consensus view in developed (and some developing) countries is yes, retirees (and the disabled) should have at least a minimum, lifetime guaranteed income stream.

This consensus developed starting in 1881 when Germany's Chancellor, Otto von Bismarck, proposed that country's old age and disability social insurance system, adopted in 1889. Before Germany's public system, there were lifetime annuities for narrower segments of the population. For example, military pensions are very old. Among private sector employers, American Express introduced lifetime annuity pensions in 1875 for its employees.

it does not matter which country has or not. the question is does everyone needs it. garmen tends to play it safe. even if you do not need it, having it is not going to kill you.

who cares about germany or usa. we are in sg. i dont care what those chao ang moh do.

you want to tok history? do you know that in the 70s and 80s, many civil servants in sg were on pension scheme. today, they totally scrap this scheme today. if lifelong annuity is so impt, why garmen scrap this? both my parents are on this scheme, that is why they do not have to depend on me.

And did my parents made a correct choice? in the 80s, they offer my parents about a few hundred thousand in their cpf in place of the pension scheme. my parents chose the pension scheme while some of the friends chose the cpf scheme. the 200k they got in their cpf was used to buy a terrace house. the terrace house is worth 2.5 million today.

my mom has received pension of 18k per year for 20 years already. she is still going strong. but even if she were to live another 100 years, she would not be getting what her friend got.

does it mean that lifelong annuity is always a better choice? for my parents i would say yes. they hardly save anything. having money in their bank account hurts them. they must quickly spend everything they have. yes, lifelong annuity keeps them from being a destitute.

for their friends, a definite no. they can manage their money well. despite having a terrace house, their cash is much more than what my parents have. if they had remained in the the pension scheme, it would not have killed them, but they will definitely be less well off.

like i said, there is no one size fits all solution for all.

 

[w1rbelw1nd]

This discussion is getting pointless. Can't people come to consensus that there is a irreconcilable differences in their views and just acknowledge this difference?

 

[kehyi4]

This discussion is getting pointless. Can't people come to consensus that there is a irreconcilable differences in their views and just acknowledge this difference?

I think they are having too much fun to stop now

 

[henrylbh]

After so many posts, I got blur

With 166k, CPF Life estimates the payout to be between 1280 and 1380.

All I know is my table shows -

With 166k and prevailing interest rates, the payout of 1280, 1330 (average) and 1380 will last till -

1280 to 94 yo 12 mths (90 yo 1 mth without additional interest)
1330 to 92 yo 10 mths (88 yo 6 mths without additional interest)
1380 to 90 yo 11 mths (87 yo 2 mths without additional interest)

Look at the above ages till when retirement sum is exhausted, is there a real need to force all to gamble when theoretically half must lose for other half to gain? (I guess with cautious buffer in LIF in the initial trial, more will lose than gain especially the earlier cohorts).

What could be done is to lower the payout beyond 95 yo (to 100?) if this is no long enough. Those who live beyond, god bless them. Govt should step in if the survivor has no means. And empirically, how many poor can live that long?

 

[Yachtmaster]

Why are ur wasting time on something u cant control?

 

[redchallenge]

off track a bit, what do you guys think of the FRS in 20-30 year's time? by rough calculation if yearly increment is 3%. FRS will hit around 340-370k in 30years time

 

[windwaver]

I think they are having too much fun to stop now

However, I find both of their points valid. It's a good discussion and it will only benefit everybody.

Point is, people disagree and that's a daily thing. A quality exchange is far more better than fists and brute and I consider this a healthy exchange.

 

[qhong61]

off track a bit, what do you guys think of the FRS in 20-30 year's time? by rough calculation if yearly increment is 3%. FRS will hit around 340-370k in 30years time

Why think so far ahead?

 

[BBCWatcher]

FRS will hit around 340-370k in 30years time

It could, although if inflation remains low (or even negative) over the medium to long term -- cf. Japan! -- then it probably won't be that high in 30 years. That said, the government looks like it wants CPF LIFE to rise, in real terms, to be more comparable to developed country lifetime annuity payout levels. I would expect the BRS/FRS/ERS figures to rise a bit faster than inflation.

 

[redchallenge]

Why think so far ahead?

better to anticipate and save more and gain compound interest rather than get surprised only when its too late ma

 

[redchallenge]

It could, although if inflation remains low (or even negative) over the medium to long term -- cf. Japan! -- then it probably won't be that high in 30 years. That said, the government looks like it wants CPF LIFE to rise, in real terms, to be more comparable to developed country lifetime annuity payout levels. I would expect the BRS/FRS/ERS figures to rise a bit faster than inflation.

in actuality our current inflation rate is lower than 3%, in the range of 1.5-2% iirc?

 

[BBCWatcher]

in actuality our current inflation rate is lower than 3%, in the range of 1.5-2% iirc?

Lately closer to 1.0%. ("Core inflation" is a good measurement for these purposes. An elder consumer inflation rate would be even better.)

 

[orwell76]

 

[orwell76]

http://financial-planning-advice.blogspot.com/2009/07/cpf-life-does-it-payout-for-life.html

MANPOWER Minister Gan Kim Yong has assured Singaporeans they will receive a monthly payout from the CPFLife annuity scheme for the rest of their lives, despite a 'disturbing' provision in the new law.

He gave this pledge on Monday when replying to Madam Halimah Yacob (Jurong GRC) and Madam Ho Geok Choo (West Coast GRC).
They were debating a major change to the Central Provident Fund (CPF) Act that will introduce the CPFLife scheme. This will give members a steady stream of retirement income from age 65. However, both MPs were worried by the lack of guarantee on premiums and payouts in the new law, which they argued gave the Government too much discretion in deciding the amounts.

Mr Gan, in his bid to allay any fears, said it was not feasible to guarantee the amount paid. This is because the monthly sum would have to be adjusted regularly, 'taking into account interest rates and mortality experience to ensure the solvency of the Lifelong Income Fund'.

The fund, administered by the CPF Board, holds the money that members use to participate in the annuity scheme. But the minister was quick to add: 'CPFLife members can rest assured they will receive payouts for as long as they live.'

The remark was directed at Madam Halimah, chairman of the Government Parliamentary Committee for Manpower, who noted that the law allows the CPF Board to stop CPFLife payments unless the Lifelong Income Fund is solvent. 'While I can understand the legal basis for this provision, I find it quite disturbing to have it reflected in the Bill,' she said.

There are similar clauses for commercial insurance companies, she noted, but added: 'The relationship between the CPF Board and the CPF members, however, is not just a legal contract but... a social contract as the board has a social responsibility to manage CPF funds prudently in order to help Singaporeans meet their retirement needs.' She wanted to know what are the safeguards for protecting CPF members against the risk of the fund's insolvency.

Do you trust Gan?

 

[OngHuatHuat]

Thanks for sharing and updating. That's why I think most important thing is to make sure the fund is sustainable under current model rather than keep paying super high interest rate. Get my point?

Anyway, I stick with my opinion, rate hike will affect fund payout.

 

[BBCWatcher]

....There are similar clauses for commercial insurance companies....

Do you trust Gan?

More than the CEO of a commercial insurance company, yes. Which is rather the whole point.