Question about CPF Life

[wisely98]

Sorry to hijack this thread.

Currently if RA=$171k (FRS) @ 55 y/o, monthly payout from 65 onwards is $1320-$1410. Question is if i will be 55 y/o 10 years from now and meet the FRS, will this payout be adjusted for inflation?

 

[dork32]

Sorry to hijack this thread.

Currently if RA=$171k (FRS) @ 55 y/o, monthly payout from 65 onwards is $1320-$1410. Question is if i will be 55 y/o 10 years from now and meet the FRS, will this payout be adjusted for inflation?

every year, the frs increase by 3k. so expect a frs of about 200k then. the payout should increase accordingly.

 

[wisely98]

every year, the frs increase by 3k. so expect a frs of about 200k then. the payout should increase accordingly.

It's about $5k per year (approx 3%), let's hope the payout will increase in tandem.

 

[henrylbh]

It's about $5k per year (approx 3%), let's hope the payout will increase in tandem.

That's assuming life expectancy, interest rate, claims etc remain about the same and provided people like Tean Lim does not form government

 

[microtek]

Another question, what if the sum in my CPF RA is much higher than the ERS when I turn 55? Eg: ERS = $250K but I have $350K in my RA. Does it mean I will get larger payouts accordingly?

 

[dork32]

Another question, what if the sum in my CPF RA is much higher than the ERS when I turn 55? Eg: ERS = $250K but I have $350K in my RA. Does it mean I will get larger payouts accordingly?

i think this is wat will happen.

before 55, there is no ra, only sa.

at 55, 250k will be transferred to ra. the 100k will remain in sa. you can withdraw your sa if you want to.

your ra will continue to grow because of the interest earned till you are 65. you will have more than 250k when you start to draw at 70

 

[henrylbh]

Another question, what if the sum in my CPF RA is much higher than the ERS when I turn 55? Eg: ERS = $250K but I have $350K in my RA. Does it mean I will get larger payouts accordingly?

No IF. Sum in RA can never exceed prevailing ERS

You can choose to meet the prevailing FRS or ERS by transfer from your CPF accounts (SA, followed by OA) or by cash to RA anytime you like. Whatever the amount in RA will be for CPF Life.

 

[dork32]

Another question, what if the sum in my CPF RA is much higher than the ERS when I turn 55? Eg: ERS = $250K but I have $350K in my RA. Does it mean I will get larger payouts accordingly?

just for your info,

if you have 250k in your RA at 55. it will grow to 370k when you are at 65. this will give you a payout of approx 2000 per month

if you have 250k in your ra at 65, it will give you a payout of approx 1400 per month.

standard plan

 

[henrylbh]

Sorry to hijack this thread.

Currently if RA=$171k (FRS) @ 55 y/o, monthly payout from 65 onwards is $1320-$1410. Question is if i will be 55 y/o 10 years from now and meet the FRS, will this payout be adjusted for inflation?

The payout is estimated at $1,320 to $1,410 based on $171k in your RA at 55 and payout commence at 65.

But if you commence payout later, the payout will be more by estimated x% (forget the percentage). The payout will be even more depending on when you choose to top up your RA to the limit of prevailing ERS and as far as I know, there is no age limit to topping up RA even after CPF Life payout commences.

 

[maple96]

Another question, what if the sum in my CPF RA is much higher than the ERS when I turn 55? Eg: ERS = $250K but I have $350K in my RA. Does it mean I will get larger payouts accordingly?

At 55, FRS will be transferred from your SA/OA to RA. Then u can choose to topup RA to 250K (your example of ERS=250k) from cash or transfer from SA/OA funds. So u say u have $350k in SA/OA?

Ok your example is wrong ok, above scenario should be what u see.

So RA at 55 cannot never exceed ERS of 250k. But it will grow with interest over the years until 65 where u will make a decision or defer to anytime until 70 year.

Yes, u will likely get larger payouts with bigger RA balance. It also depends on your choice of CPF Life Plan.

However, if after you have created your RA at 55 and with ERS of 250k after 55, then the govt announce higher ERS for subsequent years, u can still continue to topup RA to the current ERS

 

[scheng1]

Ok, under the old plans, Plus is quite similar to the current Standard CPF Life Plan where 100% of the RA is transferred to the CPF Life Pool at start ( based on info I gathered from google search). The only thing I am not sure is how extra interests on CPF is treated. So #1 is unlikely to change.

Since she topup her RA, she will get payout from there. If she continues to topup, it will be adjusted over the years until the fund is depleted. If she stops topup, it may or may not be adjusted in future. That's #2

# 3 is likely adjustments for interests credited to RA, based on what I see in one case.

That explains the payouts from different sources.

One interesting thing to note from my mother's CPF statement.

She works part time, and the CPF contribution plus workfare still go into OA, MA and SA.

On her birthday month, which happens to be December, OA and SA (including interests) are emptied out. Half go into RA, and half credited into her bank account. So every year, her OA and SA start from 0.

It's quite confusing to see her statement because it has OA, SA, MA and RA. 4 columns instead of 3.

Cash Topup is different. It goes directly into RA, and won't be taken out.

 

[microtek]

I also found out that the CPF Annual top up Limit is $37,740/year. So you can't put in like... $100K at one go.

 

[scheng1]

I also found out that CPF Annual top up Limit is $37,740/year. So you can't put in like... $100K at one go.

Under Retirement Sum Topping-Up (RSTU) Scheme

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

 

[sg_investor]

No tax advantage already.

Under Retirement Sum Topping-Up (RSTU) Scheme

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

 

[kehyi4]

...
On her birthday month, which happens to be December, OA and SA (including interests) are emptied out. Half go into RA, and half credited into her bank account. So every year, her OA and SA start from 0.
...

This is really quite odd. Why does this happen?
Did she ask for this or is this something that CPF did on their own?

 

[scheng1]

This is really quite odd. Why does this happen?
Did she ask for this or is this something that CPF did on their own?

Auto de. Not just her. My ex-boss also same thing. He receives it on his birthday month which is in May.

 

[henrylbh]

I also found out that the CPF Annual top up Limit is $37,740/year. So you can't put in like... $100K at one go.

You can top up even more than 100k if your SA or RA is far short of prevailing limits - 171k for SA and 256.5k for RA.

The CPF Annual Limit of $37,740 is the sum total with respect to mandatory and voluntary contributions including direct top-up to MA.

 

[henrylbh]

One interesting thing to note from my mother's CPF statement.

She works part time, and the CPF contribution plus workfare still go into OA, MA and SA.

On her birthday month, which happens to be December, OA and SA (including interests) are emptied out. Half go into RA, and half credited into her bank account. So every year, her OA and SA start from 0.

It's quite confusing to see her statement because it has OA, SA, MA and RA. 4 columns instead of 3.

Cash Topup is different. It goes directly into RA, and won't be taken out.

From what I understand, your mum belong to the cohort that is allowed to withdraw 50% of CPF when they turned age 55, i.e. 50% is transferred from SA and OA to RA and the balance can be withdrawn from age 55. Thereafter, they are allowed to withdraw contributions, including WIS and interest credited to their OA and SA and MA if MA meets the medisave required amount once a year. The once a year withdrawal has since changed to multiple withdrawals during the year. She must have made a standing instruction to withdraw once a year on her birthday when she first started withdrawal. If she is making top-up (to RA), then it does not make sense to withdraw her OA and SA annually. Instead she could transfer whatever OA and SA contributions received monthly to RA every month for best effect.

 

[BBCWatcher]

If she is making top-up (to RA), then it does not make sense to withdraw her OA and SA annually.

Unless she's getting tax relief.

Instead she could transfer whatever OA and SA contributions received monthly to RA every month for best effect.

If she's not getting tax relief, that'd be better since she might be able to claw back some interest loss with a direct transfer. I know OA to SA transfers are favorable from an interest crediting point of view, since the transfer is effectively backdated to the beginning of the month for purposes of qualifying for the higher SA interest rate. Transfers into RA might be interest favorable as well.

 

[henrylbh]

If she is making top-up (to RA), then it does not make sense to withdraw her OA and SA annually.

Unless she's getting tax relief.

Did you not understand that his mum is quite elderly and working part time and getting workfare monthly. The fact that she could withdraw 50% of her CPF at age 55 is telling. Post 55, she is also withdrawing whatever is credited into her OA and SA annually. She may be rich but what possible tax relief is there?

Instead she could transfer whatever OA and SA contributions received monthly to RA every month for best effect.

If she's not getting tax relief, that'd be better since she might be able to claw back some interest loss with a direct transfer. I know OA to SA transfers are favorable from an interest crediting point of view, since the transfer is effectively backdated to the beginning of the month for purposes of qualifying for the higher SA interest rate.Transfers into RA might be interest favorable as well.

What claw back? Why mention transfer of OA to SA to earn interest back dated to beginning of the month unless you implying she could or should do that transfer?

Transfers into RA might be interest favorable as well

No a case of interest favorable as well. Can only transfer SA and OA to RA, if she wants to any transfer.

My goodness, the lack of basic English reading comprehension is astounding.

May be a case of wanting to say more than necessary?