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

[kelhot2001]

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

Agreed to your point but again then what to do ?

 

[maple96]

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.

.

Expected answers per website

As stated in the website, mthly payout might reduce because of reason highlighted in red above. But if u continue to keep monies in OA/SA/MA to at least 60k, same extra interest will be earned, so changes in mthly payout will not be material. Especially if u keep MA to BHS which u did not utilise materially and your 10-20% premium have not been utilised until after 90.

No worries unless u drain your OA/SA/MA

 

[maple96]

Agreed to your point but again then what to do ?

If u happy with my answers, no action required

Maybe ask this question, what would be the % of premium if join at 65 vs 70? Will it be the same % based on balance at 65 or at 70?

 

[kelhot2001]

Expected answers per website

As stated in the website, mthly payout might reduce because of reason highlighted in red above. But if u continue to keep monies in OA/SA/MA to at least 60k, same extra interest will be earned, so changes in mthly payout will not be material. Especially if u keep MA to BHS which u did not utilise materially and your 10-20% premium have not been utilised until after 90.

No worries unless u drain your OA/SA/MA

Wonderful idea, another good reason to go basic, at 90 years old, I probably sucking out monthly payout from LIF (from std and life premium) LOL, just kidding

 

[henrylbh]

Wonderful idea, another good reason to go basic, at 90 years old, I probably sucking out monthly payout from LIF (from std and life premium) LOL, just kidding

Bad idea if you can live to 90 or even slightly above ...... basic plan goes to the dogs.

 

[kelhot2001]

Bad idea if you can live to 90 or even slightly above ...... basic plan goes to the dogs.

I am the underdog

 

[henrylbh]

I am the underdog

If you survive passed 90, your surviving cohort who chose SP will say you dumb and those who chose EP will say those who chose SP are dumb and BP most dumb Bigger insult comes when around age 95, your life payout starts to drop. To avoid that, you better go by 90