Retirement plan

[myrick]

Hi,

I am exploring to get retirement plan to act as a supplement to my CPF.

Which are the better plans around?

 

[boredboiboi]

Hi,

I am exploring to get retirement plan to act as a supplement to my CPF.

Which are the better plans around?

Actually all the plans are about the same.
but currently there are 2 types.
1) traditional type where ur money will depreciate throughout the income period. Because it payouts all total together with capital.
2) monthly income from as early as 37th months till all the way, and capital will appreciate along the way and can act as a form of legacy too.

 

[reddevil0728]

Hi,

I am exploring to get retirement plan to act as a supplement to my CPF.

Which are the better plans around?

What's your CPF situation?

 

[BBCWatcher]

What's your CPF situation?

A very good question. Asked another way, what CPF shortcomings are you trying to fix? Examples: bridging to a CPF LIFE payout start, increasing retirement income above what CPF LIFE can provide, protecting a spouse’s/partner’s lifestyle better than CPF alone can, and/or something else.

 

[myrick]

What's your CPF situation?

Both my spouse and myself have reached FRS for our CPF.

So exploring to see if it's better off to get a retirement plan to supplement our income during our retirement period.

 

[pchan2018]

Hi,

I am exploring to get retirement plan to act as a supplement to my CPF.

Which are the better plans around?

Got Manulife RetireReady Plus II via DBS to augment my multiplier account interests as well. Premium is 10 yrs to pay,

 

[boredboiboi]

Got Manulife RetireReady Plus II via DBS to augment my multiplier account interests as well. Premium is 10 yrs to pay,

Anyway manulife retireready plus 2 just remove from the shelf, now is Retireready plus 3

 

[reddevil0728]

Got Manulife RetireReady Plus II via DBS to augment my multiplier account interests as well. Premium is 10 yrs to pay,

Anyway manulife retireready plus 2 just remove from the shelf, now is Retireready plus 3

Why not Signature Income?

 

[Prof. Utonium]

Both my spouse and myself have reached FRS for our CPF.

So exploring to see if it's better off to get a retirement plan to supplement our income during our retirement period.

How long is the duration till retirement?

Do you need a non hassle plan or able to DIY?

Do you have SRS?

If you have SRS and want to maximize it, then it make sense to get a retirement plan via it.

If you have more than 10 years till retirement, perhaps the market would offer a better return.

Personally, I have MRRP paid lump sum to start at 50. Though I would be able to change it closer to the date. The idea is to get myself acclimatized to the payout and lessen my spending before full retirement. At that time, MRRP is the most value for money retirement plan. Highest guaranteed returns and some other perks such as Loss of Independence/ activities of daily living.

Did a quick search and seems like NTUC is really upping their game.

 

[boredboiboi]

Why not Signature Income?

Signature income is 1 of the options. See my very 1st comment. Income that start as early as 37th month.

 

[BBCWatcher]

Both my spouse and myself have reached FRS for our CPF.

OK, so you want more retirement income, got it. What's wrong with increasing your CPF Retirement Account balances? That would increase your monthly retirement income, and it would do so better (more "bang for the buck" than all of the other options mentioned so far). You're well below the maximum Retirement Account balances allowed.

You can add any amount(s) you like, up to the current Enhanced Retirement Sum (counting principal only; interest can accrue above the ERS). Every time the ERS is raised you can do more. You can even do "cross-spouse" transfers if you want, i.e. your spouse transfers his/her OA dollars into your RA and vice versa. And you have no insurance carrier default risk, only the risk the Government of Singapore defaults -- a very low risk indeed.

 

[myrick]

I am able to top up my CPF special account as it seems they are being transferred to my OA every month now.

I am age 42 this age and looking to draw down from age 60 or perhaps 65?

Anyone who is able to give me an illustration for the better plan in the market for comparison?

OK, so you want more retirement income, got it. What's wrong with increasing your CPF Retirement Account balances? That would increase your monthly retirement income, and it would do so better (more "bang for the buck" than all of the other options mentioned so far). You're well below the maximum Retirement Account balances allowed.

You can add any amount(s) you like, up to the current Enhanced Retirement Sum (counting principal only; interest can accrue above the ERS). Every time the ERS is raised you can do more. You can even do "cross-spouse" transfers if you want, i.e. your spouse transfers his/her OA dollars into your RA and vice versa. And you have no insurance carrier default risk, only the risk the Government of Singapore defaults -- a very low risk indeed.

 

[BBCWatcher]

I am able to top up my CPF special account as it seems they are being transferred to my OA every month now.

I think you mean you're unable to top up your Special Account, i.e. your Special Account has reached the Full Retirement Sum (FRS)? Is that correct?

I am age 42 this age and looking to draw down from age 60 or perhaps 65?

CPF offers drawdown options starting as early as age 55, so no problem there.

Anyone who is able to give me an illustration for the better plan in the market for comparison?

So let's suppose your SA has reached the FRS. You are still able to do the following:

1. You can deposit cash into your MediSave Account as long as the deposit fits within both the CPF Annual Limit and Basic Healthcare Sum (BHS). MA earns 4.0% interest, and this deposit is eligible for tax relief.

2. You can make an "all three account" Voluntary Contribution. This contribution must fit within the CPF Annual Limit. It is eligible for tax relief only if you are self-employed. You will earn >>2.5% interest on this type of contribution, with the exact rate depending on whether your MA has reached the BHS.

3. You can repay OA funds used for housing. The limit is the amount you've used for housing plus accrued interest. These dollars will earn 2.5% interest and are not eligible for tax relief.

4. You may have options involving a spouse or partner.

Options #1 and #2 are very highly likely to beat any/all insurance company sold retirement plans. I'd say even Option #3 is competitive. However, while I think Options #1 and #2 are sufficiently attractive, generally speaking I think regular purchases of a couple low cost, well diversified index funds are more attractive than #3. So that's what I suggest you look into as the non-CPF part of your retirement plan, to make regular monthly buys of a couple low cost, well diversified index funds for the next couple decades. There are lots of discussions about how to do that, and you may decide to do at least some of that via a SRS account, depending on your income tax situation.

 

[boredboiboi]

I am able to top up my CPF special account as it seems they are being transferred to my OA every month now.

I am age 42 this age and looking to draw down from age 60 or perhaps 65?

Anyone who is able to give me an illustration for the better plan in the market for comparison?

Drawdown from age 60 or 65 for how many years of income?
I am able to quote something for you.

 

[myrick]

I think you mean you're unable to top up your Special Account, i.e. your Special Account has reached the Full Retirement Sum (FRS)? Is that correct?

CPF offers drawdown options starting as early as age 55, so no problem there.

So let's suppose your SA has reached the FRS. You are still able to do the following:

1. You can deposit cash into your MediSave Account as long as the deposit fits within both the CPF Annual Limit and Basic Healthcare Sum (BHS). MA earns 4.0% interest, and this deposit is eligible for tax relief.

2. You can make an "all three account" Voluntary Contribution. This contribution must fit within the CPF Annual Limit. It is eligible for tax relief only if you are self-employed. You will earn >>2.5% interest on this type of contribution, with the exact rate depending on whether your MA has reached the BHS.

3. You can repay OA funds used for housing. The limit is the amount you've used for housing plus accrued interest. These dollars will earn 2.5% interest and are not eligible for tax relief.

4. You may have options involving a spouse or partner.

Options #1 and #2 are very highly likely to beat any/all insurance company sold retirement plans. I'd say even Option #3 is competitive. However, while I think Options #1 and #2 are sufficiently attractive, generally speaking I think regular purchases of a couple low cost, well diversified index funds are more attractive than #3. So that's what I suggest you look into as the non-CPF part of your retirement plan, to make regular monthly buys of a couple low cost, well diversified index funds for the next couple decades. There are lots of discussions about how to do that, and you may decide to do at least some of that via a SRS account, depending on your income tax situation.

Oh yes, i mean not able to top up my Special Account.

Maybe it's a good idea to partial refund my CPF used for housing. Do I look into refund accrued interest first or principal?

 

[myrick]

Drawdown from age 60 or 65 for how many years of income?
I am able to quote something for you.

Hi,

Maybe for 20 years for age 60 and 15 years for age 65?

 

[BBCWatcher]

Maybe it's a good idea to partial refund my CPF used for housing. Do I look into refund accrued interest first or principal?

As far as the second part, it doesn't really matter. Whatever you repay, whether it's $1 or $100,000, will earn 2.5% interest in your OA.

However, I don't think OA repayment should be your first or even second choice. In particular, if you have room below the CPF Annual Limit -- if your compulsory CPF contributions (employer plus employee) are below $37,740 for the year -- you can get >>2.5% interest from CPF. And, as mentioned, I don't think OA at 2.5% is attractive enough at age 42 versus simple dollar cost averaging into low cost, well diversified index funds.

 

[pchan2018]

Why not Signature Income?

I saw this, but the one time premium is too stiff for me and it has a number of riders that seems to inflate its premium cost like able to transfer to your kids, which is not im looking for. Just supplement income at my retirement age on top of CPF and whatever savings i have at that time, premium was in my budget, and no unnecessary add-ons.

 

[reddevil0728]

I saw this, but the one time premium is too stiff for me and it has a number of riders that seems to inflate its premium cost like able to transfer to your kids, which is not im looking for. Just supplement income at my retirement age on top of CPF and whatever savings i have at that time, premium was in my budget, and no unnecessary add-ons.

Premium financing.

 

[boredboiboi]

I saw this, but the one time premium is too stiff for me and it has a number of riders that seems to inflate its premium cost like able to transfer to your kids, which is not im looking for. Just supplement income at my retirement age on top of CPF and whatever savings i have at that time, premium was in my budget, and no unnecessary add-ons.

There isnt any rider or add on. Its just a pure 1 time premium.