Understanding CPF LIfe & The Estimator

[maple96]

“The CPF Lifelong Income For The Elderly (CPF LIFE) is a longevity insurance scheme that insures you against the risk of outliving your retirement savings, by providing you with a monthly payout for as long as you live.”
(quote: CPFB)

 

[dork32]

“The CPF Lifelong Income For The Elderly (CPF LIFE) is a longevity insurance scheme that insures you against the risk of outliving your retirement savings, by providing you with a monthly payout for as long as you live.”
(quote: CPFB)


There are 3 CPF Life Plans:

1. Basic Plan

2. Standard Plan

3. Escalating Plan


A. How do you know which plan gives you the best value for money?

Continue reading Understanding the Basics of CPF Life

one very big mistake in this article. He is comparing the differences at 81. it is giving an impression that if you lived to 82, standard is a better plan. sorry, you have to live to 87, 88 to win on standard.

why did the guy choose 81? is it because the losses is the biggest for standard at 81? otherwise, i do not see any significance in 81. he would be much better off publishing the bi table like henry does.

 

[dork32]

there are also critical errors in his maths

first is 10 to 20 %, it is very unfair to use 10%. actual numbers from the cpf life estimator shows it to be about 12%

second the interest loss for standard is all wrong. it states 57k (4%) is lost over the 16 years. the number is actually closer to 100k(99k++)

this is what i meant, any monkey that pass psle english and n-level e maths can start to write a blog

 

[lifeafter41]

there are also critical errors in his maths

first is 10 to 20 %, it is very unfair to use 10%. actual numbers from the cpf life estimator shows it to be about 12%

second the interest loss for standard is all wrong. it states 57k (4%) is lost over the 16 years. the number is actually closer to 100k(99k++)

this is what i meant, any monkey that pass psle english and n-level e maths can start to write a blog

Hi dork, I just took a quick look in the article, it stated 86k, instead of 57k for the standard plan. Did I miss anything?

 

[celtosaxon]

“The CPF Lifelong Income For The Elderly (CPF LIFE) is a longevity insurance scheme that insures you against the risk of outliving your retirement savings, by providing you with a monthly payout for as long as you live.”
(quote: CPFB)


There are 3 CPF Life Plans:

1. Basic Plan

2. Standard Plan

3. Escalating Plan


A. How do you know which plan gives you the best value for money?

Continue reading Understanding the Basics of CPF Life

Honestly, if I had no understanding of CPFL and just read this article, I would be more confused than before I read it!

I think a better way to compare these is to run a side by side analysis between RSS, Basic & Standard... i.e. no pooling, partial pooling and maximum pooling. Notice I don’t say full pooling for Standard - although 100% of the premium ‘theoretically’ goes to the pool... from a ‘practical’ standpoint, the premium stays (to cover payments and bequest, until exhausted) and 100% of the interest earned on that premium goes to the pool - hence the 0% return until exhausted.

 

[BBCWatcher]

The author is also missing an important pronoun: you. It's a dead certainty (pun intended) that Singapore dollars are and will be worthless to dead people.

 

[dork32]

Hi dork, I just took a quick look in the article, it stated 86k, instead of 57k for the standard plan. Did I miss anything?

well, someone edited the post when after i made my post.

the interest is still wrong. it is 99k on 200k on just the 4% alone. the bonus interest + interest on interest for the 16 years is another 17k. Total losses = 116k

these sort of blog can be easily edited. maybe maple is the author. after i mentioned, he went to change the blog

 

[BBCWatcher]

why did the guy choose 81?

That's a complete mystery, never explained. For reference, Singstat's 2019 life table for men lists a 19.6 year life expectancy at age 65 (and 22.9 years for women). If you're going to pick a specific age I don't know why it'd be so far below even these figures (which are too pessimistic as forecasts).

 

[maple96]

Honestly, if I had no understanding of CPFL and just read this article, I would be more confused than before I read it!

I think a better way to compare these is to run a side by side analysis between RSS, Basic & Standard... i.e. no pooling, partial pooling and maximum pooling. Notice I don’t say full pooling for Standard - although 100% of the premium ‘theoretically’ goes to the pool... from a ‘practical’ standpoint, the premium stays (to cover payments and bequest, until exhausted) and 100% of the interest earned on that premium goes to the pool - hence the 0% return until exhausted.

Failed Attempt In Learning

U wasted all your time calculating IRR and still dun understand how CPF Life actually works! Talk facts, not theory

U asking to prepare spreadsheets to compare or use your IRR?

 

[dork32]

i have already mentioned the 10 to 20% range for premium for basic is very large.

it is not very fair to use either numbers. eg frs today will result at 250k at 65. 10% of 250k is 25k and 20% is 50k. the difference is 25k. this is quite a lot of money.

the blogger mentioned that he does not trust the numbers from the estimator. the author uses his knowledge cpf life to determine if it is correct.

he should use his knowledge of cpf life to determine this number as provided by the estimator and not just take the lower limit of 10%

 

[dork32]

"Do not get obsessed with the financial estimates"

this statement is the one of the best in the blog.

there are people that like to calculate to the last cent. they get very worked up and wonder where they go wrong when their numbers are off by a little. is that really important? even if it is off by a little, it is not going to affect the big picture.

 

[sirgym]

Hi, does anyone know what is the best plan for someone with no dependents?

 

[dork32]

Hi, does anyone know what is the best plan for someone with no dependents?

bbc choose escalating, the 2% annual increase is good for him
i choose standard, the initial cut for escalating is too steep for my liking
maple choose basic, it is his secret and he will not reveal his reason.

 

[BBCWatcher]

Hi, does anyone know what is the best plan for someone with no dependents?

I think you mean "heirs" rather than "dependents." ("Heir" is usually a more general term than "dependent.") If you don't have any heirs or charities you care about, then you definitely shouldn't choose the CPF LIFE Basic Plan. Otherwise, "it depends."

bbc choose escalating, the 2% annual increase is good for him

I'm inclined to choose the CPF LIFE Escalating Plan shortly before my 70th birthday. I don't know what plan I'll actually choose at that point in time because it'll depend on the situation at that point in time. If, for example, I'm in poor health, it seems likely I'd make a different decision.

 

[maple96]

I'm inclined to choose the CPF LIFE Escalating Plan shortly before my 70th birthday. I don't know what plan I'll actually choose at that point in time because it'll depend on the situation at that point in time. If, for example, I'm in poor health, it seems likely I'd make a different decision.

So now are u listening to me

And dork32 cannot make up his mind, swaying between Basic and Standard with his own secret reasons (the IRR)

 

[maple96]

"Do not get obsessed with the financial estimates"

this statement is the one of the best in the blog.

there are people that like to calculate to the last cent. they get very worked up and wonder where they go wrong when their numbers are off by a little. is that really important? even if it is off by a little, it is not going to affect the big picture.

i have already mentioned the 10 to 20% range for premium for basic is very large.

it is not very fair to use either numbers. eg frs today will result at 250k at 65. 10% of 250k is 25k and 20% is 50k. the difference is 25k. this is quite a lot of money.

the blogger mentioned that he does not trust the numbers from the estimator. the author uses his knowledge cpf life to determine if it is correct.

he should use his knowledge of cpf life to determine this number as provided by the estimator and not just take the lower limit of 10%

well, someone edited the post when after i made my post.

the interest is still wrong. it is 99k on 200k on just the 4% alone. the bonus interest + interest on interest for the 16 years is another 17k. Total losses = 116k

these sort of blog can be easily edited. maybe maple is the author. after i mentioned, he went to change the blog

there are also critical errors in his maths

first is 10 to 20 %, it is very unfair to use 10%. actual numbers from the cpf life estimator shows it to be about 12%

second the interest loss for standard is all wrong. it states 57k (4%) is lost over the 16 years. the number is actually closer to 100k(99k++)

this is what i meant, any monkey that pass psle english and n-level e maths can start to write a blog

And u just helped the author to slap yourself with your own obsession over changing and petty financial views

And u are choosing Standard Plan (with your IRR)

 

[dork32]

And u just helped the author to slap yourself with your own obsession over changing and petty financial views

And u are choosing Standard Plan

yes i am not obsessed. 57k ve 99k is a lot of money. it is significant. when the error is so large you cannot let it go.

99k vs 100k is quite small. it is not going to affect any decision. it further shows that i am not chasing after peanuts.

i am quite appalled by the standard of our financial professional. cannot even calculate interest and got the cheek to post this rubbish and post this rubbish. may you can count to 10 with the aid of your fingers also can become financial professional these days. not surprised that our financial professionals are losing their jobs to FT

and accountant also dare to say 57k and 99k got no difference. yeah 57 cents and 99 cents got not difference.

 

[dork32]

So now are u listening to me

And dork32 cannot make up his mind, swaying between Basic and Standard with his own secret reasons (the IRR)

dork choose basic

maple say celta cannot read but he himself cannot read. the guy ask if no dependent choose what. dork say choose standard is no dependent.

but dork got dependent, dork choose basic.

 

[dork32]

And u just helped the author to slap yourself with your own obsession over changing and petty financial views

same thing 10% and 20% no difference? what a lost accountant that we have.

12% and 10% not much difference but 10 vs 20?

and also, it is clear you cannot do proper analysis with the numbers on the estimator. it is clear that you are not able to come up with any number other that 10%.

and since your margin of error is large and yet acceptable, might as well no need analyze. just anyhow piang any number and be done with it.

this is wat i meant any monkey that fail maths today can become an accontant

 

[maple96]

same thing 10% and 20% no difference? what a lost accountant that we have.

12% and 10% not much difference but 10 vs 20?

and also, it is clear you cannot do proper analysis with the numbers on the estimator. it is clear that you are not able to come up with any number other that 10%.

and since your margin of error is large and yet acceptable, might as well no need analyze. just anyhow piang any number and be done with it.

this is wat i meant any monkey that fail maths today can become an accontant

U are obviously blinded by your own reading and comprehension skills. It was clearly explained in the second article. Go read it.