Will double FRS be enough?

[Project_Xco]

Will a couple each with FRS be able to retire adequately at 65?

Assumptions:
- on CPF Life at 65
- both not working and have no other passive income
- children fully independent and have their own retirement money
- fully paid 4 room HDB
- both have BHS to pay for Integrated Shield Plan (Govt) and careshield life
- No illness or long term care
- Any holidays draw out from separate savings
- Have small savings (let's say equivalent to $100k in today's money)

Don't intend to touch the savings unless for emergency.

 

[reddevil0728]

Will a couple each with FRS be able to retire adequately at 65?

Assumptions:
- on CPF Life at 65
- both not working and have no other passive income
- children fully independent and have their own retirement money
- fully paid 4 room HDB
- both have BHS to pay for Integrated Shield Plan (Govt) and careshield life
- No illness or long term care
- Any holidays draw out from separate savings
- Have small savings (let's say equivalent to $100k in today's money)

Don't intend to touch the savings unless for emergency.

without knowing how much the couple splurge on food and purchases. how to tell?

 

[BBCWatcher]

It really depends on how they define an adequate lifestyle. Plus they could still make a few financial mistakes that'd undermine their ability to maintain a particular lifestyle.

 

[magicming]

Will a couple each with FRS be able to retire adequately at 65?

Assumptions:
- on CPF Life at 65
- both not working and have no other passive income
- children fully independent and have their own retirement money
- fully paid 4 room HDB
- both have BHS to pay for Integrated Shield Plan (Govt) and careshield life
- No illness or long term care
- Any holidays draw out from separate savings
- Have small savings (let's say equivalent to $100k in today's money)

Don't intend to touch the savings unless for emergency.

If we do the standard plan payout for CPF life at 65, that will mean about $1500 each. So, the couple will have about $3000. if the couple does not own a car and live a typical HDB 4 room flat lifestyle, then I would think the $3000 would be enough for an adequate, though basic, lifestyle. An important point would be how much does this couple currently spend.

 

[BBCWatcher]

If we do the standard plan payout for CPF life at 65, that will mean about $1500 each. So, the couple will have about $3000.

Not a great assumption, though. For lifestyle adequacy questions you should be looking at the CPF LIFE Escalating Plan whether or not they choose it. (Inflation is real. If they don't choose the CPF LIFE Escalating Plan then they've got more manual work to do to combat inflation.) Also, you should be looking at the period when only one spouse is living. Household expenses don't reduce by as much as half when the first spouse dies, but that's what happens to the CPF LIFE income stream. So that's the more challenging part.

if the couple does not own a car and live a typical HDB 4 room flat lifestyle, then I would think the $3000 would be enough for an adequate, though basic, life. An important point would be how much does this couple currently spend.

I think that's about right but with the important caveats above.

 

[henrylbh]

If we do the standard plan payout for CPF life at 65, that will mean about $1500 each. So, the couple will have about $3000. if the couple does not own a car and live a typical HDB 4 room flat lifestyle, then I would think the $3000 would be enough for an adequate, though basic, lifestyle. An important point would be how much does this couple currently spend.

If now at age 65, with $3000 and no car, no maid, no smoking and drinking and ailments should be adequate for a simple life for the next 30 years despite inflation. If their adult children giving parents monthly allowance that would be a bonus.

 

[henrylbh]

If we do the standard plan payout for CPF life at 65, that will mean about $1500 each. So, the couple will have about $3000. if the couple does not own a car and live a typical HDB 4 room flat lifestyle, then I would think the $3000 would be enough for an adequate, though basic, lifestyle. An important point would be how much does this couple currently spend.

A maid is as expensive as a car. If got both, sure mati

 

[starbugs]

At 3.5% inflation assumed for the long term, things will cost twice as much in 20 year's time. $3000 then is worth $1500 now. Are you and your spouse able to live on a pooled $1500 today? It's doable but it's going to be a frugal lifestyle.

 

[elvintay07]

Actually depending on what is the value of $3,000 at age 65. If today I am 65, $3,000 is enough. Today excluding mortgage, my wife and I spend $4,000 a month.

 

[Mephist0pheLes]

To not obfuscate the discussion with inflation, lets just assume you and your partner are both 65 and retire today with FRS.

Using CPF Life estimator, you are expected to get a combined of $1,600 per month under the escalating plan. The reason for choosing escalating plan is because u do not have other source of income, and the escalating plan will mitigate the effect of inflation if u or ur spouse lives very long.

With $1,600 per month, an elderly couple with no financial commitment should be able to afford a frugal lifestyle. But you may not afford a maid to take care of u when u r old and frail or when you incur large medical expenses that is payable after claiming from your shield plan.

 

[Shawny88]

ERS is a safer bet

 

[DevilPlate]

But you may not afford a maid to take care of u when u r old and frail or when you incur large medical expenses that is payable after claiming from your shield plan.

That's when enhanced careshield life and/or whole life insurance kicks in to supplement.

So FRS alone for a couple is not enough.

 

[dork32]

To not obfuscate the discussion with inflation, lets just assume you and your partner are both 65 and retire today with FRS.

Using CPF Life estimator, you are expected to get a combined of $1,600 per month under the escalating plan. The reason for choosing escalating plan is because u do not have other source of income, and the escalating plan will mitigate the effect of inflation if u or ur spouse lives very long.

With $1,600 per month, an elderly couple with no financial commitment should be able to afford a frugal lifestyle. But you may not afford a maid to take care of u when u r old and frail or when you incur large medical expenses that is payable after claiming from your shield plan.

$1600 only for 2 frs? did you how much you can get with standard? this is why many here are not choosing escalating.

 

[royalmix]

Will a couple each with FRS be able to retire adequately at 65?

Assumptions:
- on CPF Life at 65
- both not working and have no other passive income
- children fully independent and have their own retirement money
- fully paid 4 room HDB
- both have BHS to pay for Integrated Shield Plan (Govt) and careshield life
- No illness or long term care
- Any holidays draw out from separate savings
- Have small savings (let's say equivalent to $100k in today's money)

Don't intend to touch the savings unless for emergency.

To me, it is very simple:

1. How old are you now, still working? What will your retirement lifestyle be like and your monthly expenses?
   
2. CPF Life is an insurance. It is not my only source of retirement fund/income. It is insurance which government force me to buy as a safety-net, a backup in case my primary or other source of retirement fund/income is not sufficient, eg due to emergencies, unforeseen events, inflationary pressures, etc
   
3. CPF Life payout alone will never be enough for me, factoring other uncertainties. I rely on my other primary retirement funds/income. CPF Life payout helps me fight inflation etc, Basic is enough for me.
   
4. Almost all insurance have an unguaranteed returns portion. If there other vehicles which can pay guaranteed returns higher than CPF, would you still want more CPF Life Premiums which has quite a big chunk of unguaranteed returns depending on which plan you choose. Now I can earn more than 5% with RHB and will delay CPF contributions next year, eg.
   
5. Retired from work, not life. I may still be able to “earn” some income, though I am not working for income/money. There are plenty of opportunities for free money out there.
   
6. Other insurance protection you have

Ok, enough of tips/tricks from me.

 

[DevilPlate]

I have seen healthy older folks getting mild senile (brain retardation of sorts) from late 60s and very susceptible to online scams for eg.

This kinda worries me and I have that in mind when comes to my own retirement planning.

 

[elvintay07]

To not obfuscate the discussion with inflation, lets just assume you and your partner are both 65 and retire today with FRS.

Using CPF Life estimator, you are expected to get a combined of $1,600 per month under the escalating plan. The reason for choosing escalating plan is because u do not have other source of income, and the escalating plan will mitigate the effect of inflation if u or ur spouse lives very long.

With $1,600 per month, an elderly couple with no financial commitment should be able to afford a frugal lifestyle. But you may not afford a maid to take care of u when u r old and frail or when you incur large medical expenses that is payable after claiming from your shield plan.

I just play around with this calculator. I assume I am 55 today (it doesn’t work if u r not at least 55). Entered RA at $300,000.
Age 65: $1,880
Age 85: $2,800
Age 95: $3,410
At age 65, I would like to join CPF life at $445,000 (don’t know what this means).
But to summarise, this looks freaking pathetic. Probably enough to pay for medication if I get any chronic diseases.
For me, I think best to have 1-2 solid property then rent out and be king in Bali. Rather than stay here with simi CPF life. Even with $300,000 RA also get this kind of monthly payout.

 

[Mephist0pheLes]

$1600 only for 2 frs? did you how much you can get with standard? this is why many here are not choosing escalating.

1600 at the start, and grow at 2% per year for the escalating plan.

for standard, it will be a combined of around $2,100 per month throughout.

 

[starlight318]

I just play around with this calculator. I assume I am 55 today (it doesn’t work if u r not at least 55). Entered RA at $300,000.
Age 65: $1,880
Age 85: $2,800
Age 95: $3,410
At age 65, I would like to join CPF life at $445,000 (don’t know what this means).
But to summarise, this looks freaking pathetic. Probably enough to pay for medication if I get any chronic diseases.
For me, I think best to have 1-2 solid property then rent out and be king in Bali. Rather than stay here with simi CPF life. Even with $300,000 RA also get this kind of monthly payout.

The payouts seem pretty decent to me for 300K RA, what kind of payout do you expect? Best to set aside other income streams instead of relying solely on CPF.
At age 65· the 300k would have grown to 445K over the 10years @ 4% current interest.

 

[elvintay07]

The payouts seem pretty decent to me for 300K RA, what kind of payout do you expect? Best to set aside other income streams instead of relying solely on CPF.
At age 65· the 300k would have grown to 445K over the 10years @ 4% current interest.

Let me estimate how much is needed based on today
(1) Utilities - $200
(2) Condo maintenance- $450
(3) Internet - $40
(4) Mobile Plan - $20
(5) Clothes - $100
(6) Snacks - $100
(7) Food - $1000

Total: $1910. Divide by 2 (husband and wife) = $955

Looks ok

 

[fr33d0m]

Let me estimate how much is needed based on today
(1) Utilities - $200
(2) Condo maintenance- $450
(3) Internet - $40
(4) Mobile Plan - $20
(5) Clothes - $100
(6) Snacks - $100
(7) Food - $1000

Total: $1910. Divide by 2 (husband and wife) = $955

Looks ok

Living in condo, yet only 300K in RA?

LOL...