Should you delay your CPF Life payout

[Trader11]

The modern diet tells us that people will die earlier

 

[drunkard]

I don't think I will live beyond that a lot.. Why delay~

 

[Squaredot]

ra is your kids' money

I agree.
What is is basic or ers better if have no kids?

 

[starlight318]

I agree.
What is is basic or ers better if have no kids?

I have no kids but I would rather give the money to my nephews and nieces instead of giving to the lifelong fund pool if i die early. Will go for FRS and basic plan.

 

[tangent314]

I have no kids but I would rather give the money to my nephews and nieces instead of giving to the lifelong fund pool if i die early. Will go for FRS and basic plan.

How do you know you will die early? If you die late you will be taking money out of the pool.

 

[homer123]

Can you choose BRS if your RA is more than FRS minimum requirement?

I plan to choose BRS with Basic and not to defer the payout to limit my exposure to CPF Life. Its independent of how long I think I will live.

 

[starlight318]

How do you know you will die early? If you die late you will be taking money out of the pool.

Based on family history and current state of health. There is a higher chance of me
dying early compared to living past 89 which someone has calculated as the 'breakeven' age.

Of course, nothing is impossible. I may live till 100 but probability is very low.

And even if I really live past 89, no big deal since standard plan is only paying $100+ extra compared to basic plan anyway, not much impact.

 

[dork32]

I agree.
What is is basic or ers better if have no kids?

no kids but do you have loving nieces or nephews?

if no then choose standard or escalating with brs

 

[henrylbh]

I have several queries relating to CPF Life payouts and like to start off Q1. Please let me know what you know. Would be best if you can link or quote.Thanks.

I have RA that meets FRS of 176k (without top ups) at age 55.

RA would have grown with interest to $X by age 65 and $Y by age 70 (assuming no subsequent top-ups).

If I opt for Basic Plan at age 65 and assuming 20% is deducted as annuity premium, is the deduction based on $176k or $X?

 

[maple96]

I have several queries relating to CPF Life payouts and like to start off Q1. Please let me know what you know. Would be best if you can link or quote.Thanks.

I have RA that meets FRS of 176k (without top ups) at age 55.

RA would have grown with interest to $X by age 65 and $Y by age 70 (assuming no subsequent top-ups).

If I opt for Basic Plan at age 65 and assuming 20% is deducted as annuity premium, is the deduction based on $176k or $X?

Such questions shld be posted to CPFB if u want 100% correct answers

What do u think : why CPFB only start payout at 65 or allow u to delay till 70?

So more can be deducted as CPF Life premium!

 

[prudent76]

This is not correct. The latest stats gives life expectancy at 20.9 for those aged 65. Life expectancy is given as a mean, not a median, and the median tends to be about 3 years higher than the mean. So 50% of people aged 65 today will live until at least 89 years. Life expectancy has also been increasing steadily by about 0.1 per year, so by then time we reach 65 it would have gone up around a couple of years depending on your age today.

Most people tend to underestimate their own lifespans, it's a fairly well known phenomena. Unfortunately it means a lot of people don't appreciate the features of the CPF Life that are designed to make their money last longer.

https://www.population-europe.eu/pop-digest/underestimating-lifespans

Wrong. Median is only used to describe data sets with small population size and has outliers. 1) Our dataset is large 2)i doubt we have may outliers. How many ppl do you know living past a 100?. Use of average is correct. In short most of us will kick the bucket at 85 give or take the 1 SD, that is to say most of us will expire by 89 not"at least 89" as mentioned by you.

 

[BBCWatcher]

The latest stats gives life expectancy at 20.9 for those aged 65. Life expectancy is given as a mean, not a median, and the median tends to be about 3 years higher than the mean. So 50% of people aged 65 today will live until at least 89 years. Life expectancy has also been increasing steadily by about 0.1 per year, so by then time we reach 65 it would have gone up around a couple of years depending on your age today.

Most people tend to underestimate their own lifespans, it's a fairly well known phenomena. Unfortunately it means a lot of people don't appreciate the features of the CPF Life that are designed to make their money last longer.

Wrong.

Tangent314 is factually correct on all counts. Mean and median life expectancies do materially differ at age 65. They differ when there's a "skew" and/or truncation in the distribution (in a large or small population -- don't know what you're harping on there).

The maximum contribution anybody has ever made so far to Singapore's mean life expectancy at age 65 is +49 years since there was a Singaporean who lived to 114. (Possibly +50/115, but there's some reason to doubt that particular individual's birth date.) For males, +45 so far. To contribute 35 years to the mean you have to live to age 100, and there are over 1,200 Singaporeans alive today who've done that but not tens of thousands yet.

You can ignore facts if you wish, but facts are facts.

 

[henrylbh]

Tangent314 is factually correct on all counts. Mean and median life expectancies do materially differ at age 65. They differ when there's a "skew" and/or truncation in the distribution (in a large or small population -- don't know what you're harping on there).

The maximum contribution anybody has ever made so far to Singapore's mean life expectancy at age 65 is +49 years since there was a Singaporean who lived to 114. (Possibly +50/115, but there's some reason to doubt that particular individual's birth date.) For males, +45 so far. To contribute 35 years to the mean you have to live to age 100, and there are over 1,200 Singaporeans alive today who've done that but not tens of thousands yet.

You can ignore facts if you wish, but facts are facts.

The more pertinent question is not so much the number but the percentage of centenarians or over 90ers from each cohort.

 

[prudent76]

Tangent314 is factually correct on all counts. Mean and median life expectancies do materially differ at age 65. They differ when there's a "skew" and/or truncation in the distribution (in a large or small population -- don't know what you're harping on there).

The maximum contribution anybody has ever made so far to Singapore's mean life expectancy at age 65 is +49 years since there was a Singaporean who lived to 114. (Possibly +50/115, but there's some reason to doubt that particular individual's birth date.) For males, +45 so far. To contribute 35 years to the mean you have to live to age 100, and there are over 1,200 Singaporeans alive today who've done that but not tens of thousands yet.

You can ignore facts if you wish, but facts are facts.

(in a large or small population -- don't know what you're harping on there) therein is the crux of it which you completly missed or don't understand. He is using the median age to draw his conclusion. If you are calculating average height for a group of 10 ppl (small population) but you have a Yao Ming (outlier) in that grp, do you use mean or median and why? If you still don't understand then... I don't want to go into a full blown stats lesson so I'll just leave it at that.

 

[tangent314]

Wrong. Median is only used to describe data sets with small population size and has outliers. 1) Our dataset is large 2)i doubt we have may outliers. How many ppl do you know living past a 100?. Use of average is correct. In short most of us will kick the bucket at 85 give or take the 1 SD, that is to say most of us will expire by 89 not"at least 89" as mentioned by you.

No, median isn't used to "describe data sets with small population size".
Median, mean and mode are different ways to look at data. It is a known fact that when it comes to life expectancy after age 65, the median is 3 years higher than the mean and the mode is 7 years higher than the mean, and these values answer 3 different questions.

1. On average, what age will I live until? Answer: 86 (this is the mean)
2. What age do I have a 50% chance to live until? Answer: 89 (this is the median)
3. At what age do I have the highest chance of dying? Answer: 93 (this is the mode)

For people that don't understand the difference between mean, mode and median, these answers will probably blow your mind, but all 3 answers are factually correct, and they will make sense if you know how to read a probability distribution curve.

 

[maple96]

My parents passed away at 83 and 91, so there is a possibility I might live till 87 (average of 83+91).

I will still choose Basic and start payout at 65. I do not rely solely on CPF Life for retirement or for the rest of my life. Basic will pay me as long as I live.

I dun need the payout at 65 but will "reinvest" at guaranteed returns of at least 4%. I know how to manage my funds, to stream them out mthly for my expenses and needs, I dun need an insurer to manage it for me by paying back the monies to me in instalments.

If I can continue to grow my monies with at least 4% or minimum 2.5% guaranteed returns, I am happy and manage it to last beyond 87

Know yourself, half the battle won, know the other part, win win!

 

[maple96]

I have several queries relating to CPF Life payouts and like to start off Q1. Please let me know what you know. Would be best if you can link or quote.Thanks.

I have RA that meets FRS of 176k (without top ups) at age 55.

RA would have grown with interest to $X by age 65 and $Y by age 70 (assuming no subsequent top-ups).

If I opt for Basic Plan at age 65 and assuming 20% is deducted as annuity premium, is the deduction based on $176k or $X?

Such important questions which will affect my decisions, I always write to CPFB for confirmation

 

[dork32]

skewed normal distribution

 

[dork32]

Such questions shld be posted to CPFB if u want 100% correct answers

What do u think : why CPFB only start payout at 65 or allow u to delay till 70?

So more can be deducted as CPF Life premium!

sometimes you must look at it on both sides.

yes, they take more for their lifelong fund. it also means that you have more in your ra.

 

[maple96]

sometimes you must look at it on both sides.

yes, they take more for their lifelong fund. it also means that you have more in your ra.

Yes, I know that as well, so u have to weigh and make your decisions. I have done all the calculations plus other considerations.