RA (CPF question)

[RM2SSG]

My question was

1) currently my mom 60yo has 50k in her SA/RA account. Would like to top up cash to hit the 241k(maximum allowed to top up) ; in the event she wanna withdraw at the age of 70Yo Which the CPF Life starts paying . Is it possible .

It seems not possible as the maximum withdrawal is 20% max after attaining minimum sum when CPF Life starts the payout.

Coincidentally, another question come into my mind, doing a direct comparison, will the CPF Life outperform private insurance company annuity ? If yes then I don't need to do the top up and could just buy her a annuity

My humble suggestion; write in or call CPF directly with your mum's particulars and get a confirmed answer is better. Or make an appointment to see them and work out all the possible ways you could enhanced your parent retirement payout.

If you managed to find a private annuity plan that is better than CPF Life, please share here as well. I would really love to know. The last time I look around a few years back, CPF Life was still the most re-assuring with life time payment and at decent amount.

 

[wts2013]

Hi, I think if I'm not wrong, SA + RA Account will auto be converted to CPF Life(Annuity) upon age 65 which the payout will take effect. I think the funds in SA unable to withdraw unless it's above minimum sum of current 161k when you withdraw at age 55 or 20% max after attaining minimum sum when CPF Life starts the payout .


I'm sorry I didn't phrase my question more accurately cause I wasn't sure about the CPF Life also lol ~

My question was

1) currently my mom 60yo has 50k in her SA/RA account. Would like to top up cash to hit the 241k(maximum allowed to top up) ; in the event she wanna withdraw at the age of 70Yo Which the CPF Life starts paying . Is it possible .

It seems not possible as the maximum withdrawal is 20% max after attaining minimum sum when CPF Life starts the payout.

Coincidentally, another question come into my mind, doing a direct comparison, will the CPF Life outperform private insurance company annuity ? If yes then I don't need to do the top up and could just buy her a annuity

At 55, the min sum will be transferred from OA/SA to RA, whatever is remaining or being accumulated in OA/SA can be withdrawn anytime.

At 65, u can withdraw up to 20% of RA ( see ST article for detailed explanation), the rest will be transferred to CPF Life, amt depends on Basic or Standard Plan chosen. She can start getting payout at 65 or delay till 70.

If I'm not wrong, topup monies cannot be withdrawn.

Private annuity scheme: I would not consider just based on the risk that the insurer might not survive as long as the insured, CPF is different

Read this ST article published last Sunday on the new rules of CPF effective jan 2016

http://www.straitstimes.com/business/whats-new-in-the-cpf-scheme

Your mum is 60 now, has 50k, which account is this 50k in? She did not join CPF Life at 55? Read the rules below:

CPF Rules:

"You will be placed on CPF LIFE if you are a Singapore Citizen or Permanent Resident born in 1958 or after, and have at least:

$40,000 in your Retirement Account when you reach 55 years old; or
$60,000 in your Retirement Account when you reach 65 years old.

If you are not placed on CPF LIFE, you can apply to join anytime between your payout eligibility age and before you turn 80 years old or remain on the Retirement Sum Scheme."

So is she or will she join CPF Life? The outcome might be different.

 

[henrylbh]

OA = 2.5%
SA = 4.0%
Medisave = not sure
RA = 4.0%

*1st 30k (Age 55 - 65) additional 1%
*1st 60k additional 1%

You can try using the CPF Life calculator to get a rough estimate.

*I'm not sure the additional bonus interest applies to all account or only RA/SA account but I assume it's only for this account only.

The payout are for life but the bequest amount will be affected as to which plan your mom is intending to take up.

Take note** once the payout starts at the age of 65 years old or start at the delay age of 70, the interest rate change to average annuity interest rate of 3.75-4.25% per annum instead of the interest stated above .

Sorry to say that you are saying more than what you know in response to lushiris and so add to the confusion, to me at least.

lushiris mother is 66 yo and has started to drawdown her RA about $300 pm under the min sum scheme. Based on what he said, she is unlikely to be under CPF Life Scheme. As her RA is only 42k, she will be earning 6% on first 30k and 5% on 12k in her RA from 2016 as her other accounts are practically zero as she keeps withdrawing them.

 

[limyuzheng88]

Her monthly payout is based on what she have in her RA. Monthly payout will continue at the same amount until the RA is exhausted and there will be no more payout.

She can't have more than what she have. The only way to increase her payout is to top up her RA.

As she is still working, monthly employer and employee contribution will go into OA, SA and MA. I think from 2016, no more will go into her MA. She can move her OA and SA to RA, but that may be a silly move.

To enhance her payout, she can choose to withdraw whatever amount she wants from OA and SA anytime. But better to leave it in the respective accounts to earn respectable interest instead of taking it out and putting it in the bank. Only withdraw what she really need and no more. But the amount of withdrawal will be from what is in SA followed OA.

@henrylbh
Why would this be a silly move?
"She can move her OA and SA to RA, but that may be a silly move."