New CPF LIFE Estimator

[zoneguard]

yep. but that doesn't mean it has changed.

I don't know, cannot see. Wait for the reply from the write-in.

 

[fr33d0m]

The bequest portion now becomes an uncertainty.

This is perhaps to prepare the stage for another policy change.

It is never certain.

an estimate is just an estimate, can be 10% accurate or 50% accurate or 90% accurate.

 

[reddevil0728]

I don't know, cannot see. Wait for the reply from the write-in.

yep. one can say one doesn't know and thus need to clarify.

 

[fr33d0m]

The interest rates and mortality experience disclaimers were in both versions and there's no change.

The old version has 3 sets of data in chart form: payout, bequest and total payout by age.

New version has 3 payout values at age 65,85 and 95.

Is that sufficient information to make a decision? I leave it to individuals to decide. If you think you want more, please write in to CPF.

An estimate is just an estimate. You can estimate your own.

CPF’s estimate is not in any way better than your estimate or my estimate.

The bequest part of estimate is especially problematic and confusing. It is not an wonder that CPF changes the presentation of an estimate with more ambiguity as it is not close enough to actual experience.

 

[fr33d0m]

I used to be able to see the goal post clearly enough.
Now I cannot see the goal post through the 'fog'. I need to write in now so that I can see the goal post clearly again.

You never see the goal post and it keeps changing. The glimpse CPF provides previously is not an actual experience, it is just an estimate CPF provides and it has stopped providing as it is not close to actual experience.

No official communication from CPF will be based on the estimator. It will always tell you something around “based on actual mortality experience and adjust accordingly”. It won’t give you any number.

 

[zoneguard]

For reference:
1. https://www.cpf.gov.sg/members/FAQ/schemes/Retirement/CPF-LIFE/FAQDetails?category=Retirement&group=CPF LIFE&folderid=11663&ajfaqid=2186377
2. https://www.cpf.gov.sg/members/aboutus/about-us-info/cpf-clarifies/policy-faqs/why-is-interest-earned-on-my-cpf-life-premium-not-included-as-part-of-the-amount-paid-to-my-beneficiaries-when-i-pass-away?category=CPF Retirement Monthly Payouts&folderid=19774&faqid=6791249
3. https://www.cpf.gov.sg/members/FAQ/schemes/Retirement/CPF-LIFE/FAQDetails?category=Retirement&group=CPF LIFE&folderid=11684&ajfaqid=2186431

Q	Why is interest earned on my CPF LIFE premium not included as part of the amount paid to my beneficiaries when I pass away?

A

CPF LIFE is a longevity insurance scheme that provides you with a monthly payout for as long as you live. When you join CPF LIFE, your CPF LIFE premium will be paid with your CPF savings. Projected interest earned on your CPF LIFE premium is factored into your monthly payouts from the start. Your CPF LIFE payouts will be drawn from your CPF LIFE premium first. When your CPF LIFE premium is exhausted, you will then draw your monthly payouts for as long as you live from the interest that you and other CPF LIFE members have accumulated. The lifelong payouts under CPF LIFE for all members are made possible through this method of interest accumulation. That is why interest does not form part of the amount paid to the beneficiaries of CPF LIFE members when they pass away. If you pass on before your CPF LIFE premium is exhausted, the CPF LIFE premium balance (if any) together with any remaining CPF savings will be distributed to your loved ones.

Q	How does the CPF LIFE Basic Plan work?

A

CPF LIFE Basic Plan is a legacy plan carried over from the time CPF LIFE was first introduced in 2009. Many members would find the Standard or Escalating Plan more suited to their needs. Unlike the CPF LIFE Standard Plan that gives higher and stable monthly payouts, the monthly payouts under the Basic Plan are lower and will get progressively lower when your combined CPF balances eventually fall below $60,000. This is because the extra interest is earned on the first $60,000 of your combined CPF balances are credited to the Retirement Account (RA) and paid as part of your monthly payouts. As balances fall due to payouts, the extra interest earned and subsequent payouts will decline as well. Under the LIFE Basic Plan, about 10-20% of your RA savings will be deducted as CPF LIFE premium when you join CPF LIFE, which can be any time from 65 to 70. Your monthly payout will first be paid from your RA and is estimated to last until 90. Thereafter, monthly payouts will be paid from your CPF LIFE premium. If your CPF LIFE premium is depleted, you will continue to receive monthly payouts no matter how long you live.

Q	How much CPF LIFE premium balance will my beneficiaries receive when I pass away?

A

After you pass away, your beneficiaries will receive your CPF LIFE premium balance, which is the total CPF LIFE premium that you have paid less the total payouts you have received from your premium, together with any remaining CPF savings. For example, if you paid a CPF LIFE premium of $200,000 and pass away after receiving a monthly payout of $1,000 for ten months, we will pay your CPF LIFE premium balance of $190,000 (i.e. $200,000 - [$1,000 x 10 months]) together with any CPF savings to your beneficiaries. On the other hand, if you pass away before receiving any payouts, we will pay your CPF LIFE premium balance of $200,000, together with any remaining CPF savings to your beneficiaries.

To monitor if the same information can be found when the revamp to https://www.cpf.gov.sg/member is completed.

 

[kickass22]

You never see the goal post and it keeps changing. The glimpse CPF provides previously is not an actual experience, it is just an estimate CPF provides and it has stopped providing as it is not close to actual experience.

No official communication from CPF will be based on the estimator. It will always tell you something around “based on actual mortality experience and adjust accordingly”. It won’t give you any number.

I also remember they include another statement that says, that the figure will change but the change will be small and minimal.

 

[zoneguard]

I also remember they include another statement that says, that the figure will change but the change will be small and minimal.

That is correct, https://www.cpf.gov.sg/members/FAQ/...group=CPF LIFE&folderid=11673&ajfaqid=2186410

 

[Value.Matrix]

An estimate is just an estimate. You can estimate your own.

CPF’s estimate is not in any way better than your estimate or my estimate.

The bequest part of estimate is especially problematic and confusing. It is not an wonder that CPF changes the presentation of an estimate with more ambiguity as it is not close enough to actual experience.

The issues is based on the payouts, the estimate is quite fair and accurate. If payouts are increased, basic plan will suffer more, as the RA will be depleted at a faster rate.

But that also means the 4% interest will still be paid out as long as "10% to 20% of the RA are paid to CPF Life as premiums" remain, we can do an estimate and the old graphs are ok.

If they remove that line, it changes.things fundamentally. That is the worry. There is no way to cross check.

Whether our truth is the truth, it can be calculated at least to verify. Now is, you talk, i can change rule anytime since i did nkt orovide anything to verify.

 

[zoneguard]

The issues is based on the payouts, the estimate is quite fair and accurate. If payouts are increased, basic plan will suffer more, as the RA will be depleted at a faster rate.

But that also means the 4% interest will still be paid out as long as "10% to 20% of the RA are paid to CPF Life as premiums" remain, we can do an estimate and the old graphs are ok.

If they remove that line, it changes.things fundamentally. That is the worry. There is no way to cross check.

Whether our truth is the truth, it can be calculated at least to verify. Now is, you talk, i can change rule anytime since i did nkt orovide anything to verify.

I looked for other sites with screen shots of the old estimators:
1. https://dollarsandsense.sg/standard-basic-plan-need-understand-cpf-life-plans-deciding/
2. https://dollarsandsense.sg/cpf-life-basic-plan-wish-old-cpf-retirement-sum-scheme-rss/
3. https://endowus.com/insights/cpf-life-for-retirement/
4. https://onestopfinancial.sg/cpf-scheme/cpf-life/
5. https://valuewarrior.blogspot.com/2021/01/retirement-sum-scheme-rss-vs-cpf-life.html

Also archived the CPF links locally and remotely. Let's wait for the reply for the write-in.

 

[BBCWatcher]

It does seem fair to look at monthly payout trajectories as the primary consideration. The old calculator didn’t do that, but the new one does. Once payouts start residuals inexorably fall every month and fall to zero eventually. How soon they fall to zero varies, but they all get there if the member merely lives long enough. I could see why some potential heirs would want a slower declining residual, but it’s really not the CPF Board’s job to cater to anyone except the member her/himself — not its primary mission anyway. The member can decide whether the member wants declining real purchasing power out of CPF LIFE to chase the possibility (but not assurance) of a somewhat larger residual.

Do we really want to argue that chasing a declining residual is equally important as the monthly payout trajectories among the general membership with a typically near (or below) poverty level retirement income stream? I’d vote no, but if you’re among the minority of members who would like to weight the residual trajectories more heavily, you still can.

Pure speculation here, but it could be that the recent “pop” in short-term inflation rates reminded everyone that inflation still matters. That plate of chicken rice isn’t going to cost S$3 forever. (Oops, sorry, it’s S$3.50 now and smaller.) So how are elderly Singaporeans going to cope with 2 to 4 decades of inflation? Many are already struggling, so how about just asking them “what’s the plan?”, as this estimator does? Seems fair. Their children are already often going to inherit the residual HDB leasehold, so they can calm down.

 

[zoneguard]

The old calculator didn’t do that, but the new one does.

Actually the old calculator had monthly payout data. I kept the raw JSON data for all 3 plans and the conversions to CSV for my scenario planning. I even shared how to do this conversion somewhere in one of the threads here.

The new one only has 3 payout data points at 3 ages. And we are being asked to decide our plan choice based on this.

 

[BBCWatcher]

Simplification can be a very good thing. Do most members really need to see 30+ years of a horizontal estimated nominal payout line (Standard Plan), for example?

 

[zoneguard]

Do most members really need to see 30+ years of a horizontal estimated nominal payout line (Standard Plan), for example?

A policy's benefit illustration typically show more years than 3 years. Say we are being sold an annuity plan and there's only 3 lines in the BI, do you think there will be any takers?

 

[BBCWatcher]

We're not being sold an annuity. We're required to pick one of three available life annuity payout plans. In principle, if the information to inform this decision can be simplified and still be at least as helpful for the bulk of participants, great!

Private insurers' benefit illustrations are not any sort of gold standard here. It's not even clear they're bronze standards.

 

[proton_cannon]

Actually the old calculator had monthly payout data. I kept the raw JSON data for all 3 plans and the conversions to CSV for my scenario planning. I even shared how to do this conversion somewhere in one of the threads here.

The new one only has 3 payout data points at 3 ages. And we are being asked to decide our plan choice based on this.

obviously, CPF board is trying to hide information from the public they are supposed to serve

 

[reddevil0728]

obviously, CPF board is trying to hide information from the public they are supposed to serve

be careful with such allegation

 

[andyhtc]

There are quite a lot of people who want to bequest as much as possible since they don't really need the CPF payout. Having the bequest information can provide a reference for estate planning.

 

[twosix]

I prefer the current or old one that shows the 3 plans in a graph leh...

 

[iceblendedchoc]

We're not being sold an annuity. We're required to pick one of three available life annuity payout plans. In principle, if the information to inform this decision can be simplified and still be at least as helpful for the bulk of participants, great!

Private insurers' benefit illustrations are not any sort of gold standard here. It's not even clear they're bronze standards.

to be fair, we are not sold an annuity, we are forced into it.

So a better disclosure should be expected. I do think we need some certainly when it come to retirement money which a government draw without reservation from our monthly paycheck.