RSS old scheme vs CPF life basic ? CPF Life Basic vs Std/Esc

[henrylbh]

Ok this time I used Excel, and RA at age 55 = S$181,000 will result in RA age 65 = S$281,173.
The reason why yours are different is because you are calculating using Annual-rest, while I calculated using bank's calculation method (which is monthly-rest). The bank's method is the fair method to use. Annual-rest will result in you being short-changed, and actual effective interest rate is lower compared to bank's interest rate.

As to mati at 65y1m or 65y11m, your RA balance will still be higher than the highest bequest range of $272,342! So the figure just doesn't tally as to why highest bequest is still lower than what you should have in your RA account.
But caveat here: my calculation is using monthly-rest since this is the banks' calculation method, and especially when we are dealing with monthly cash-in and cash-out, so just doesn't make any cow sense to use annual-rest here!

Whatever rest and fair or not, I used CPF's method to calculate. If you want to use your own or other method, then I got no say except why don't you also use bank's rate of interest to calculate?

Of course, RA balance has to be higher than bequest at any point of time because ....... (left to your imagination )

 

[kelhot2001]

OK OK dont argue , go here , every accurate, cannot deny

https://www.cpf.gov.sg/eSvc/Web/Schemes/SavingsCalculator/SavingsCalculator

I use $181,000.00 , based on 10 years , flat 3.75% (Mean no plus 1 plus 1)
You get $263,000.00

If you use $181,000.00 again 10 years, flat 4.3 Percent (mean 4+1+1)
You get $278,000.00

Satisfied liao, does that mean that our RA may experience 3.75% with the plus one plus one ? Dont say premium, this apply to Basic/Std/Esc before any plan is decide

 

[henrylbh]

Why 3.75% p.a. interest for CPF money?

It's between 3.75% and 4.25%. If they say between 2.5% +1% and X%, you happy? 2.5% is by statute.

 

[kelhot2001]

It's between 3.75% and 4.25%. If they say between 2.5% +1% and X%, you happy? 2.5% is by statute.

So to speak as per your above statement, it will be possible for CPF to give
RA interest as 2.5+1+0.25 = 3.75% since CPF have use it to simulate the payout (by the way, it is completely legal, I presume)

If that "reallly" happen, will it be still as wise investment tool?

 

[henrylbh]

So to speak as per your above statement, it will be possible for CPF to give
RA interest as 2.5+1+0.25 = 3.75% since CPF have use it to simulate the payout (by the way, it is completely legal, I presume)

If that "reallly" happen, will it be still as wise investment tool?

Well if interest rate heads south to zero or negative, the min by statute is 2.5% without plus plus and it may still be attractive.

But the mafia can amend the statute

 

[kelhot2001]

As usual , got answer like no answer. I ask them where am I , they tell me my location is 1.3521° N, 103.8198° E. Technical not wrong , but i still dont know where am I

Thank you for your enquiries of 3 March 2019.

When members turn 55, they are required to set aside the Full Retirement Sum (FRS) in the Retirement Account (RA) first.

Thereafter, members may apply to be fully exempted from setting aside a Retirement Sum (RS) and withdraw all the RA savings in a lump sum, if they are currently receiving a lifelong monthly annuity payout that is equal to or more than the maximum RS monthly payout applicable to their age group.

The Ordinary, Special and MediSave Account savings will remain in their respective accounts and continue to earn interest.

If members are placed on CPF LIFE but have not been issued a CPF LIFE policy, they will be excluded if they are fully exempted from setting aside a RS. However if they are receiving an annuity payout less than the FRS payout applicable to them, they may only qualify to be partially exempted from a RS and would have to set aside a lower retirement sum.

For more information on exemption, you can click here and select “Exemption from setting aside a retirement sum”.

We would be pleased to help if you require further assistance. For more information on CPF matters, you can also visit www.cpf.gov.sg or call 1800 227 1188 from Monday to Friday, 8am to 5:30pm.

Yours sincerely

Chan Pei Wen
Customer Service Executive
Customer Contact Centre
Central Provident Fund Board

 

[maple96]

As usual , got answer like no answer. I ask them where am I , they tell me my location is 1.3521° N, 103.8198° E. Technical not wrong , but i still dont know where am I

because is the same answer I gave u, extracted/adapted from CPF website, which u already know

 

[kelhot2001]

because is the same answer I gave u, extracted/adapted from CPF website, which u already know

You must understand that I phrase it that I read through the site and that part,
I pose a few question, but they cut and paste and reply

???

 

[kelhot2001]

At least this one is much better

Thank you for your enquiries of 3 March 2019.
You asked:

1) Why is the basic premium based on 10% - 20% ? Is there a specfic exact number? If no why? and how is the premium calculated? How or when will we know?

Under the CPF LIFE Basic Plan, a portion of your Retirement Account (RA) savings (about 10%) will be deducted as the annuity premium at the point of policy issuance. The actual percentage will depend on your age when you join CPF LIFE and gender. We will inform you on the amount deducted when your policy is issued.


2)As I read, i understand that basic plan upon death, the bequest will be total of balance amount in RA and basic life premium in LIF, to be returned to the beneficiaries. AM I right on this ?
Yes, you are correct.

Bequest = RA Balance + [LIFE Annuity premium paid – Total monthly payouts received from the annuity, if any]


Under CPF LIFE, we will refund the unused annuity premium (without interest), if any, to the RA after the policyholder’s death. The refund amount together with his/her remaining CPF savings will be paid to his/her beneficiaries.

There will be no bequest if one passes away after the savings used to join CPF LIFE have been fully paid out in monthly payouts.


3) So by 90, I assume that my RA is completely depleted , the amount will be drawn out from LIF, Will this amount be reduced drastically or reduced gradually?

CPF LIFE payouts are designed to be stable.

However, we may adjust your monthly payout for the following reasons.

- Changes in mortality experience. If more people live longer than expected, the monthly payout might be lower, and vice versa.

- Changes in interest rate. If interest rates are higher than expected, the monthly payout might be higher, and vice versa.

- Transactions which affect your Retirement Account balance, for example, refund of money made from selling property, top-ups, lump-sum withdrawals and so on.

- If you had chosen the LIFE Basic Plan, your monthly payout will reduce when your combined balances fall below $60,000 and less extra interest is paid out.

We will inform you two to three months before we make any adjustments to your monthly payout.


4) LIF will be fund with monies pool with Std/Esc Premium and Basic Premium and all interest earn ?
Yes. The Lifelong Income Fund consists of the annuity premiums, and the interest earned on the annuity premium of all CPF LIFE members.



5) Lastly, based on FRS of $181,000.00, I calculated that at age 65, I would have in my RA estimate around $278,000 based on 4+1+1 Percent rate, but why is CPF estimator giving a total at S$264,000.00, why a big difference of S$14,000.00

Could you provide us with a screenshot of this information, please?



I will be pleased to assist if you would like further clarification. Alternatively, you can call 1800-227 1188 (Mondays to Fridays, 8am - 5.30pm).

 

[kelhot2001]

Must personally login into cpf to ask question, then reply will be more personal
will write in again

 

[henrylbh]

You must understand that I phrase it that I read through the site and that part,
I pose a few question, but they cut and paste and reply

???

Instead of saying answer is like no answer to your queries, why not also put the actual queries here for us to see both sides.

 

[kelhot2001]

Instead of saying answer is like no answer to your queries, why not also put the actual queries here for us to see both sides.

5) What happens after exemption? Again I wrote in for answer, expect it next week

I would if i could still leave the amount in CPF , just that I am doing more like an RSS withdrawal if that permit Assuming, CPF allow me to be exempted from CPF life at age 70, I still top up to FRS at 55, allow the monies to built up, monies still allow in RA after exemption, I withdraw 1600 per month till my RA dried up at age 65. Awaiting for answer

 

[henrylbh]

Must personally login into cpf to ask question, then reply will be more personal
will write in again

But still you may get incorrect answers

I emailed my questions and they replied officially by letter. Not happy with the answers, I pointed out that the answers could be wrong. Then they responded by another letter informing me to ignored the earlier letter and take 'this' letter as the one

We sincerely apologize for the wrong estimated payout information given in our previous reply of ....... Please ignore the letter dated ...... You may wish to refer to this letter instead.

 

[kelhot2001]

But still you may get incorrect answers

I emailed my questions and they replied officially by letter. Not happy with the answers, I pointed out that the answers could be wrong. Then they responded by another letter informing me to ignored the earlier letter and take 'this' letter as the one

We sincerely apologize for the wrong estimated payout information given in our previous reply of ....... Please ignore the letter dated ...... You may wish to refer to this letter instead.

So how? Believe in myself ?

 

[kelhot2001]

At least this one is much better

Thank you for your enquiries of 3 March 2019.
You asked:

1) Why is the basic premium based on 10% - 20% ? Is there a specfic exact number? If no why? and how is the premium calculated? How or when will we know?

Under the CPF LIFE Basic Plan, a portion of your Retirement Account (RA) savings (about 10%) will be deducted as the annuity premium at the point of policy issuance. The actual percentage will depend on your age when you join CPF LIFE and gender. We will inform you on the amount deducted when your policy is issued.


2)As I read, i understand that basic plan upon death, the bequest will be total of balance amount in RA and basic life premium in LIF, to be returned to the beneficiaries. AM I right on this ?
Yes, you are correct.

Bequest = RA Balance + [LIFE Annuity premium paid – Total monthly payouts received from the annuity, if any]


Under CPF LIFE, we will refund the unused annuity premium (without interest), if any, to the RA after the policyholder’s death. The refund amount together with his/her remaining CPF savings will be paid to his/her beneficiaries.

There will be no bequest if one passes away after the savings used to join CPF LIFE have been fully paid out in monthly payouts.


3) So by 90, I assume that my RA is completely depleted , the amount will be drawn out from LIF, Will this amount be reduced drastically or reduced gradually?

CPF LIFE payouts are designed to be stable.

However, we may adjust your monthly payout for the following reasons.

- Changes in mortality experience. If more people live longer than expected, the monthly payout might be lower, and vice versa.

- Changes in interest rate. If interest rates are higher than expected, the monthly payout might be higher, and vice versa.

- Transactions which affect your Retirement Account balance, for example, refund of money made from selling property, top-ups, lump-sum withdrawals and so on.

- If you had chosen the LIFE Basic Plan, your monthly payout will reduce when your combined balances fall below $60,000 and less extra interest is paid out.

We will inform you two to three months before we make any adjustments to your monthly payout.


4) LIF will be fund with monies pool with Std/Esc Premium and Basic Premium and all interest earn ?
Yes. The Lifelong Income Fund consists of the annuity premiums, and the interest earned on the annuity premium of all CPF LIFE members.



5) Lastly, based on FRS of $181,000.00, I calculated that at age 65, I would have in my RA estimate around $278,000 based on 4+1+1 Percent rate, but why is CPF estimator giving a total at S$264,000.00, why a big difference of S$14,000.00

Could you provide us with a screenshot of this information, please?



I will be pleased to assist if you would like further clarification. Alternatively, you can call 1800-227 1188 (Mondays to Fridays, 8am - 5.30pm).

Now we know afew more accurate things as per reply

1) they mention 10% (assuming I join at age 65 without any delay)
2) Bequest will include basic premium paid (Not std or esc plan)
Bequest = RA Balance + [LIFE Annuity premium paid – Total monthly payouts received from the annuity, if any] (this will answer Ervino question on why there is a range)
3) Basic withdrawal will drop at age 90, but good things is we are drawing out fully from LIF funds because our RA is depleted
4) LIF are pool together regardless of basic/standard/escalating, to be a bit bad, we will gain more if the death group before age 85 belong to std/esc, as we will be drawing out from the LIF funds left behind
5)The total fund at age 65, with FRS $181000.00@age 55 is still unknown

Tio bo?

 

[henrylbh]

5) What happens after exemption? Again I wrote in for answer, expect it next week

If that's how you put it, you can expect answer like no answer (to you)

 

[kelhot2001]

If that's how you put it, you can expect answer like no answer (to you)

Of course not la, but phrase in a better way, but I send via website question, I will resend again using personal CPF login and see

 

[maple96]

5) What happens after exemption? Again I wrote in for answer, expect it next week

I would if i could still leave the amount in CPF , just that I am doing more like an RSS withdrawal if that permit Assuming, CPF allow me to be exempted from CPF life at age 70, I still top up to FRS at 55, allow the monies to built up, monies still allow in RA after exemption, I withdraw 1600 per month till my RA dried up at age 65. Awaiting for answer

So u put the question as " If exemption is approved, can I still leave the monies in RA for withdrawal as mthly payout like RSS?"

The answer will be "we will refund the RA monies to your bank account"

 

[maple96]

2)As I read, i understand that basic plan upon death, the bequest will be total of balance amount in RA and basic life premium in LIF, to be returned to the beneficiaries. AM I right on this ?
Yes, you are correct.

Bequest = RA Balance + [LIFE Annuity premium paid – Total monthly payouts received from the annuity, if any]


Under CPF LIFE, we will refund the unused annuity premium (without interest), if any, to the RA after the policyholder’s death. The refund amount together with his/her remaining CPF savings will be paid to his/her beneficiaries.

There will be no bequest if one passes away after the savings used to join CPF LIFE have been fully paid out in monthly payouts.

Same answer as what I provided earlier Just stick to the formula and ignore the nitty gritty in the calculator figures

 

[maple96]

1) Why is the basic premium based on 10% - 20% ? Is there a specfic exact number? If no why? and how is the premium calculated? How or when will we know?

Under the CPF LIFE Basic Plan, a portion of your Retirement Account (RA) savings (about 10%) will be deducted as the annuity premium at the point of policy issuance. The actual percentage will depend on your age when you join CPF LIFE and gender. We will inform you on the amount deducted when your policy is issued.

U accept this answer?

Let me share a bit of history on Basic Plan. Before they change the policy in 2015 to allow to defer decision on CPF Life Plan choice to 65, those who join/choose CPF Life Plan at 55 with Basic Plan, 10% was deducted upon policy issuance at 55. An estimated 10% (making it about 20% previous policy) will be deducted at 65 when payout starts.

In 2015, after they change it to 65, at the website they state about 10% will be deducted at 65 upon joining CPF Life. Subsequently in 2017/2018, they quietly changed it to about 10%-20%.

The answer they gave u answers part of the old scheme above. So I suspect they are still not clear as the CPF rule tries to capture members in old and new scheme

Under old scheme 10% of RA at 55, then 10% of amt at age 65 = x
Convert this to the new scheme % on the RA at 65 = should give roughly x, so less than 20%

U want to try to get clarifications? I will follow my answers above