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Minimum sum increase, CPF Life payout dropped


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The more important question you should ask is, why is CPF Life payouts reduced barely 3 years into it's inception...

 

What you should know about CPF Life

Tue, Sep 15, 2009

The Straits Times

 

With rising life expectancy, it is prudent to ensure that your retirement savings will last for all your days.

 

The opt-in system began on Sept 5 and is open to older CPF members who wish to join the annuity scheme ahead of 2013, when it will be implemented for those turning 55 then. For older CPF members, the monthly payouts will start as early as next January.

 

While many are still undecided, some, like Madam Wong Kwai Sim, 55, have taken the plunge. She has opted for the CPF Life Balanced Plan, which will give her an estimated monthly payout of $856 to $948 when she hits 65.

 

Madam Wong, who works part-time as a clerk, currently has $117,000 in her Retirement Account, which is also the prevailing MS.

 

CPF Life scheme can do better ...

04:46 AM Mar 08, 2012

Letter from Tan Say Yin

 

 

THERE are two negatives in the Central Provident Fund Life scheme: Low payouts and, especially, the uncertainty of the monthly quantum, which could fluctuate yearly depending on interest rates.

 

And if the payout is at the lower end of the range, it could be further eroded by inflation in the future.

 

Private companies can structure their annuities with a locked-in monthly payout, with some even providing participating annuities whereby bonuses could be declared, which then raise the monthly payout.

 

The CPF Life scheme surely could do better, since it has a larger pool of members, as it is mandatory from next year for the majority of Singaporeans who turn 55.

 

I am in my late 50s and am looking at various options for my retirement. Using the CPF online calculator, I did some comparisons.

 

Assuming I have S$117,000 in my Retirement Account, the Minimum Sum monthly payout would be S$1,040 from the age of 65. The current CPF Life Balanced Plan, however, would provide a lower monthly payout ranging from S$768 to S$844.

 

I am aware that the monthly payouts last for as long as a member lives, But the Minimum Sum example I quoted could last for a good 20 years, likely to be sufficient for most Singaporeans.

 

Even if the difference in payouts between the two schemes was, say, only S$136, I would get S$32,640 more under the Minimum Sum scheme.

 

I could set aside this amount to possibly give me another three years of allowance, taking me to a ripe old age of 88 years. I am therefore not sold on CPF Life.

URL TODAYonline | Voices | CPF Life scheme can do better ...,,,

 

Copyright 2012 MediaCorp Pte Ltd | All Rights Reserved

 

So far nobody reply his letter in Today's Voice forum.

 

CPF Life Payout from $948-$856 (in 2009) dropped to $844-768 (2012) for the same $117,000.

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Neutral Newbie

this means its time to renounce citizenship and take all that cpf money go thailand kampong be 土皇帝 :ph34r:

 

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got to factor in inflation. with every today $, you will get less in years to come.

 

tats jus the rights we have here. everything is for illustrations - cpf life payout, ins payouts, new ppty artist impressions.... wan to stay here jus hv to accept. [rolleyes]

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tats jus the rights we have here. everything is for illustrations - cpf life payout, ins payouts, new ppty artist impressions.... wan to stay here jus hv to accept. [rolleyes]

 

CPF life also compulsory now right?

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CPF life also compulsory now right?

 

THe best is you get the whole lump sum back. The money belongs to the owner, not ga men

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CPF life also compulsory now right?

 

yeah...they thk they can manage funds better than the CFOs, CFAs, hedge fund managers.

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got to factor in inflation. with every today $, you will get less in years to come.

 

commercial annuity is fixed payout over a certain number of years...

in the interest of CPF members, why not let they buy commercial annuities instead of CPF Life

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Leong Tze Hian did comment that CPF Life payout is not guaranteed. It can drop to zero.

 

That is why he recommends going with CPF Life Basic.

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Leong Tze Hian did comment that CPF Life payout is not guaranteed. It can drop to zero.

 

That is why he recommends going with CPF Life Basic.

 

yup tats wat i did w my parents cpf life.

i went thru the brochure and all i can say is im sorry for all the old folks who read only the surface and missed the fine prints.

 

the minimum sum scheme was transparent and returns every cent that belongs to you but i guess all good things must come to an end. [sly] anyw i also dun wan to say too much on this cpf liao....surely one day more and more pple wil know how well it is run.

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actually, out CPF money is not for us to use one.

 

only when we die, then our kids get money.

 

so we saving up for them?

 

but medisave how?

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this means its time to renounce citizenship and take all that cpf money go thailand kampong be 土皇帝 :ph34r:

 

Totally agree and Like multiply by 100 :-)

 

 

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actually, out CPF money is not for us to use one.

 

only when we die, then our kids get money.

 

so we saving up for them?

 

but medisave how?

 

 

I got no kids.... So save for who???

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actually, out CPF money is not for us to use one.

 

only when we die, then our kids get money.

 

so we saving up for them?

 

but medisave how?

 

Why should we save up for our kids? If that is so we are better off dead than alive. [laugh]

 

Warren Buffett has warned everyone about "inheritance" it is a morbid idea. BTW, he is not leaving his money for his kids. They have to make their own money and save for their own future well-being.

 

Unless your kid is autistic, disabled or something, I don't see any reason why we should leave a VAST fortune for them. The idea is well played by our incumbent party to tap on your willingness to support CPF for their own obscure purposes.

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kns... my salary never account for inflation, longer life expectancies and rising expectations of quality of life postretirement

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