Should you delay your CPF Life payout

[lifeafter41]

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!

What happened after knowing oneself but got dementia......

 

[BBCWatcher]

My parents passed away at 83 and 91....

Yes, and that happened with medical science and other longevity factors as they existed in the past, in their era. You live in your demographically different era.

 

[maple96]

What happened after knowing oneself but got dementia......

I raised that question a few days ago, copycat?

I dun have to tell u all my strategy ok!

(I thought the comment was from BBC, not replying to u here, but applies )

Dementia : that's one reason I want start payout at 65. The rest is my secret strategy.

When u reach 64, post here I will share

 

[maple96]

Yes, and that happened with medical science and other longevity factors as they existed in the past, in their era. You live in your demographically different era.

I have more stress, they have less I know myself, u dun try to predict my future for me, it is a joke, not just a joke, a big joke!

 

[Mecisteus]

If you aspire to be like this guy, I think you really need an escalating plan.

He needs to spend alot of money to buy good running shoes, supplements, diet, medical treatment, therapy, etc.

Japan's centenarian sprinter 'Golden Bolt' dies at 108

https://www.channelnewsasia.com/new...ian-sprinter-golden-bolt-dies-at-108-11166320

 

[prudent76]

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.

Well getting into a math d*ck swinging contest isn't helping anyone, so here's my 2 cents worth.

Whether you should take the payments earlier or later can be broken down into 3 portions. They are interrelated.
1)Utility OR how shiok it would be to take the money out now VS how shoik it would be to take extra money after a delay.
2)Liquidity - Can you convert the asset into other goods or services, If you take the money now, you can spend it if required. Simply put, delaying payout makes your money illiquid. This is a deal breaker for me.
3)Liquidity premium - Will the additional money generated after delay really improve your lifestyle?

For me, that small increase in funds later will not bring me that much "shiokness" neither will it impair or enhance my life that much. Lastly, the ability to exchange my asset of other goods or services NOW is worth much more that the extra they would give if i delayed payment(for me anyway).

Hope this helps.

 

[havetheveryfun]

They should make just euthanasia legal for anyone who manages to live above 100 years old. Then don't need to debate so much.

 

[SKenny]

Delaying the payout only make sense if you believe that you will outline the average lifespan of Singapreans, and by quite a few years. Otherwise it doesn't make economical sense. If you choose to delay because you want a larger peace of mind, then be mindful that it will probably cost you a lot more.

If the average lifespan of Singapreans suddenly increases (due to medical advancement for example), then the payout will automatically get adjusted downward. CPF has a provision that allows for it. In the end you still have to outlive the average Singaporean before you break even.

 

[JuniorLion]

Delaying the payout only make sense if you believe that you will outline the average lifespan of Singapreans, and by quite a few years. Otherwise it doesn't make economical sense. If you choose to delay because you want a larger peace of mind, then be mindful that it will probably cost you a lot more.

If the average lifespan of Singapreans suddenly increases (due to medical advancement for example), then the payout will automatically get adjusted downward. CPF has a provision that allows for it. In the end you still have to outlive the average Singaporean before you break even.

Wise words.

 

[dork32]

Delaying the payout only make sense if you believe that you will outline the average lifespan of Singapreans, and by quite a few years. Otherwise it doesn't make economical sense. If you choose to delay because you want a larger peace of mind, then be mindful that it will probably cost you a lot more.

If the average lifespan of Singapreans suddenly increases (due to medical advancement for example), then the payout will automatically get adjusted downward. CPF has a provision that allows for it. In the end you still have to outlive the average Singaporean before you break even.

i take it as i win, regardless of the situation

if i die at 68, i would not have drawn anything. but my kids win big. all my ra + interest will go to them

if i die at 100, i also win. i get to draw a bigger amount.

 

[SKenny]

i take it as i win, regardless of the situation

if i die at 68, i would not have drawn anything. but my kids win big. all my ra + interest will go to them

if i die at 100, i also win. i get to draw a bigger amount.

In both of the scenarios, you will probably be ahead.

The issue is when you die between 70 and say 85 (which is the age range in which most CPFLife members die), then you would be financially worse off. For some people, it is a small price to pay for the larger price of mind.

In the end, what matters more is that you must be comfortable with your choice.

 

[BBCWatcher]

Delaying the payout only make sense if you believe that you will outline the average lifespan of Singapreans, and by quite a few years. Otherwise it doesn't make economical sense.

No, that's just not correct.

As Dork32 pointed out, deferring to age 70 means you have 5 additional years of information. That additional information can be extremely useful in making more informed payout plan and payout level decisions. That's not the only benefit, but it's one important one.

 

[SKenny]

No, that's just not correct.

As Dork32 pointed out, deferring to age 70 means you have 5 additional years of information. That additional information can be extremely useful in making more informed payout plan and payout level decisions. That's not the only benefit, but it's one important one.

You are entitled to your opinion.

 

[maple96]

You are entitled to your opinion.

Spot on!

I will choose 65 as I see more benefits than delaying. That's my choice.

Those who are not due yet can afford to wait and see and change their mind later as CPF rules might change in the future for your cohort. US tax regulations might change and u might change your plans in the future. That's your choice in the future.

BBC shld stop being aggressive and forcing his views on others, to the extent of trying to predict my future

 

[tangent314]

Delaying the payout only make sense if you believe that you will outline the average lifespan of Singapreans, and by quite a few years. Otherwise it doesn't make economical sense. If you choose to delay because you want a larger peace of mind, then be mindful that it will probably cost you a lot more.

If the average lifespan of Singapreans suddenly increases (due to medical advancement for example), then the payout will automatically get adjusted downward. CPF has a provision that allows for it. In the end you still have to outlive the average Singaporean before you break even.

This is incorrect. And I just did the math to confirm. If you die at 75, you would have received less total monthly payout if you delay to 70 than if you immediately start withdrawals at 65, however your bequest is also much much higher because of the 'principle guarantee' feature of the CPF Life plans as there are 5 extra years to accumulate compounding interest in your RA, this leads to the XIRR being higher for delaying to 70.

 

[henrylbh]

This is incorrect. And I just did the math to confirm. If you die at 75, you would have received less total monthly payout if you delay to 70 than if you immediately start withdrawals at 65, however your bequest is also much much higher because of the 'principle guarantee' feature of the CPF Life plans as there are 5 extra years to accumulate compounding interest in your RA, this leads to the XIRR being higher for delaying to 70.

If FRS is 176k at 55 and grew with interest to $x at 65 and $y at 70, which number is the 20% annuity deduction based on?

 

[henrylbh]

This is incorrect. And I just did the math to confirm. If you die at 75, you would have received less total monthly payout if you delay to 70 than if you immediately start withdrawals at 65, however your bequest is also much much higher because of the 'principle guarantee' feature of the CPF Life plans as there are 5 extra years to accumulate compounding interest in your RA, this leads to the XIRR being higher for delaying to 70.

If FRS is 176k at 55 and grew with interest to $x at 65 and $y at 70, which number is the 20% annuity deduction based on when one opts for basic plan?

Similarly, when opting to pledge property for BRS at the ages mentioned above, how much can one withdraw?

 

[SKenny]

This is incorrect. And I just did the math to confirm. If you die at 75, you would have received less total monthly payout if you delay to 70 than if you immediately start withdrawals at 65, however your bequest is also much much higher because of the 'principle guarantee' feature of the CPF Life plans as there are 5 extra years to accumulate compounding interest in your RA, this leads to the XIRR being higher for delaying to 70.

Did you also count the time value of money for the amounts that were withdrawn from 65? Or for did you used nominal figures in your calculation?

Are you saying that delaying your payout will always be better than starting at 65? Maybe you can share them?

I cannot comment further as there isn't any figure given for your calculation.

 

[verilyverily]

Don't just count the $$$, how's the Health & Utility ?

SOURCE :
https://www.moh.gov.sg/resources-st...hospital-admission-rates-by-age-and-sex-2017p

Not all 5-year age bands are the same health-wise.
Note the sharp increase in hospitalisations at the highlighted colored age bands. If this is a surrogate marker of age-related health status then hope this helps you think about the how you would like to utilise the payouts. (for that dream retirement resort stay or that dream hospital stay ?)

Of course this 2017 data-set may not be representative of your age cohort.
And it is wise for one to factor in healthcare financing in the silver/golden years.

Hope this helps.

 

[dork32]

I cannot comment further as there isn't any figure given for your calculation.

i like this comment. do not just talk about the air and water. give us numbers.

but i can tell you tis. tangent can really count.