So you think you know about CPFLife

[Ct3833]

I wonder how many of us here  are clear about how the CPF Life balance sum is  computed before returning to the beneficiaries upon demise of the account holder ?  

 

Here is my understanding.  

 

Assuming a person Mr. A has $170k in his RA at age 55. by the time he reaches 65,  his RA account should have $242k assuming a compounding interest of 4%. to simplify our discussion, i stop the interest accruing from 65 onwards.

At 65, Mr, A start drawing out $1,2k per month for 8 years, 96*$1.2k = he would have drew out $115.2k when he is 74 year old. 

Assuming Mr. A unfortunately pass away at 74, the BIG question is how much would the balanced sum be returned to the beneficiaries? 

The answer is $170k - $115,2k = $54.8k. the deduction is not from $242k, because the sum to be returned is without interest, letting alone the balanced sum also has accrued compound interest YoY during the disbursement period from 65 to 74.

 

so go digest and think about how much money from the earned interest is evaporated from our account.  Dont get me wrong, I support CPF Life, but the way the refund being computed is sucks. Over and above, not to forget that the monthly disbursement amount  is based on the assumption that a member would exhaust his account by age of 93. meaning, if anyone pass away before 93, all the interest earned along the way from 55 year old would all be gone. 

 

 

 

Edited April 17, 2019 by Ct3833

[Pocy]

Did you seek confirmation from CPF?

[poiq]

Your calculation is off. You can use CPF Life estimator https://www.cpf.gov.sg/eSvc/Web/Schemes/LifeEstimator/LifeEstimator to see all the numbers.

 

For your example, setting the birthday as 1st May 1964, Male gender, 170k RA, payout at 65 years old, for Standard package, the monthly payout is $1349, the bequest at age 74 (after payout of 9 years) is about $105k.

[Angcheek]

I wonder how many of us here  are clear about how the CPF Life balance sum is  computed before returning to the beneficiaries upon demise of the account holder ?  

 

Here is my understanding.  

 

Assuming a person Mr. A has $170k in his RA at age 55. by the time he reaches 65,  his RA account should have $242k assuming a compounding interest of 4%. to simplify our discussion, i stop the interest accruing from 65 onwards.

At 65, Mr, A start drawing out $1,2k per month for 8 years, 96*$1.2k = he would have drew out $115.2k when he is 74 year old. 

Assuming Mr. A unfortunately pass away at 74, the BIG question is how much would the balanced sum be returned to the beneficiaries? 

The answer is $170k - $115,2k = $54.8k. the deduction is not from $242k, because the sum to be returned is without interest, letting alone the balanced sum also has accrued compound interest YoY during the disbursement period from 65 to 74.

 

so go digest and think about how much money from the earned interest is evaporated from our account.  Dont get me wrong, I support CPF Life, but the way the refund being computed is sucks. Over and above, not to forget that the monthly disbursement amount  is based on the assumption that a member would exhaust his account by age of 93. meaning, if anyone pass away before 93, all the interest earned along the way from 55 year old would all be gone. 

 

 

Assuming a person Mr. A has $170k in his RA at age 55. by the time he reaches 65,  his RA account should have $242k assuming a compounding interest of 4%. to simplify our discussion, i stop the interest accruing from 65 onwards. 

 

This part no need to assume ...... U wont get any INT after 65 

[Angcheek]

I wonder how many of us here  are clear about how the CPF Life balance sum is  computed before returning to the beneficiaries upon demise of the account holder ?  

 

Here is my understanding.  

 

Assuming a person Mr. A has $170k in his RA at age 55. by the time he reaches 65,  his RA account should have $242k assuming a compounding interest of 4%. to simplify our discussion, i stop the interest accruing from 65 onwards.

At 65, Mr, A start drawing out $1,2k per month for 8 years, 96*$1.2k = he would have drew out $115.2k when he is 74 year old. 

Assuming Mr. A unfortunately pass away at 74, the BIG question is how much would the balanced sum be returned to the beneficiaries? 

The answer is $170k - $115,2k = $54.8k. the deduction is not from $242k, because the sum to be returned is without interest, letting alone the balanced sum also has accrued compound interest YoY during the disbursement period from 65 to 74.

 

so go digest and think about how much money from the earned interest is evaporated from our account.  Dont get me wrong, I support CPF Life, but the way the refund being computed is sucks. Over and above, not to forget that the monthly disbursement amount  is based on the assumption that a member would exhaust his account by age of 93. meaning, if anyone pass away before 93, all the interest earned along the way from 55 year old would all be gone. 

 

 

The answer is $170k - $115,2k = $54.8k. the deduction is not from $242k, because the sum to be returned is without interest, letting alone the balanced sum also has accrued compound interest YoY during the disbursement period from 65 to 74.

 

This part is kind of grey bec there are many saying out there ....  Some article say its the principal amt at 65 which is 242k. 

Reason is INT is accrued from 55-65.  Only INT after 65 -74 is eaten by CPF. 

[Ct3833]

The answer is $170k - $115,2k = $54.8k. the deduction is not from $242k, because the sum to be returned is without interest, letting alone the balanced sum also has accrued compound interest YoY during the disbursement period from 65 to 74.

 

This part is kind of grey bec there are many saying out there .... Some article say its the principal amt at 65 which is 242k.

Reason is INT is accrued from 55-65. Only INT after 65 -74 is eaten by CPF.

For that grey reason, I wrote to CPF and asked them to quote me using examples. Basing on their reply, it is confirmed the basic sum at age 55. All the accumulated interest got reversed out.

Your calculation is off. You can use CPF Life estimator https://www.cpf.gov.sg/eSvc/Web/Schemes/LifeEstimator/LifeEstimator to see all the numbers.

 

For your example, setting the birthday as 1st May 1964, Male gender, 170k RA, payout at 65 years old, for Standard package, the monthly payout is $1349, the bequest at age 74 (after payout of 9 years) is about $105k.

It does not matter the accuracy, I just want to illustrate the pay out after a member passed on.

[Wt_know]

but cpf life calculator show based on “amount” at 65

 

so my next question is if Mr A pass away at 65 choon choon ... the bequest is $170k or $242k?

 

For that grey reason, I wrote to CPF and asked them to quote me using examples. Basing on their reply, it is confirmed the basic sum at age 55. All the accumulated interest got reversed out.

Edited April 18, 2019 by Wt_know

[Angcheek]

For that grey reason, I wrote to CPF and asked them to quote me using examples. Basing on their reply, it is confirmed the basic sum at age 55. All the accumulated interest got reversed out.

 

 

waaaaaaaaaa SO KNNBCCB ! basically say all my MONEY sit in there for 10yrs  to earn INT for them  ! 

 

You got their reply ? share share ? 

[Ct3833]

waaaaaaaaaa SO KNNBCCB ! basically say all my MONEY sit in there for 10yrs to earn INT for them !

 

You got their reply ? share share ?

I could still be wrong, CPF life refers to RA at 65 or RA at 55. Pardon me if I screw your emotion wrongly.

Edited April 18, 2019 by Ct3833

[Pocy]

I could still be wrong, CPF life refers to RA at 65 or RA at 55. Pardon me if I screw your emotion wrongly.

So the CPF’s reply confirms no interest once payout commences. Liddat better take out half minimum sum before CPF Life starts at 65 since no interest to be earned. Put in FD to earn interest

[Angcheek]

I could still be wrong, CPF life refers to RA at 65 or RA at 55. Pardon me if I screw your emotion wrongly.

what they quote u was kind of ambiguous..

 

I not quite sure how true is this article

 

https://dollarsandsense.sg/beginners-guide-understanding-cpf-life-monthly-payouts-when-retire-singapore/

Edited April 18, 2019 by Angcheek

[Wt_know]

based on the article we get everything back up to 65

after 65 ... there is no interest whatsoever

is it safe to say at age 65 is the “principal amount”

if age 85 is the average bye bye age

ah gong jiak the 20 years interest as pool interest to cover shortfall?

Edited April 18, 2019 by Wt_know

[Tiger1]

Let say a person got 170k at age 55. He surrender sg citizenship and go relax one corner in Malaysia, Thailand or nearby sea countries. He gets back everything plus a LIFE call retirement.

 

Choose properly....

[Wt_know]

Let say a person got 170k at age 55. He surrender sg citizenship and go relax one corner in Malaysia, Thailand or nearby sea countries. He gets back everything plus a LIFE call retirement.

 

Choose properly....

$170K leh ... not $170M ... can relak how long?

Edited April 18, 2019 by Wt_know

[Ct3833]

what they quote u was kind of ambiguous..

 

I not quite sure how true is this article

 

https://dollarsandsense.sg/beginners-guide-understanding-cpf-life-monthly-payouts-when-retire-singapore/

Let me go probe again. Edited April 18, 2019 by Ct3833

[Tiger1]

$170K leh ... not $170M ... can relak how long?

Heee. I know this point sure pop up one. Of course cannot la. That not my point. My point is... That cpf LIFE is a CB Life.

[Throttle2]

Let say a person got 170k at age 55. He surrender sg citizenship and go relax one corner in Malaysia, Thailand or nearby sea countries. He gets back everything plus a LIFE call retirement.

 

Choose properly....

But honestly $170k is nothing lah nowadays

Its just $5kpm for less than 3 yrs

 

Last time $5k salary is not bad.

But today $5kpm salary is nothing.

 

So relying on $1,350 pm means we eat not full and starve not dead.

Jialat

[Throttle2]

$170K leh ... not $170M ... can relak how long?

One year at best.