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- เผยแพร่เมื่อ 1 ส.ค. 2023
- Being a trusted adviser to our affluent clients for over two decades, we've done the math. Considering the total payout and bequest amount, the CPF LIFE Basic Plan makes the most financial sense.
In this first part of our Ten Seconds of Wisdom from our recent CPF webinar, Alvin Neo, Client Adviser at Providend, shares in great detail how each of the CPF LIFE plans actually work as well as key considerations before choosing the plan most suitable for you.
Here's the second part where Alvin explains the concept of SA shielding and illustrates the difference in your CPF OA and CPF SA balances before and after you optimise them - • CPF OA and SA Shieldin...
To learn more about how you can optimise CPF as part of your retirement plan, watch - • Understanding CPF Series
RetireWell™ is a methodology that Providend has developed to design a retirement income plan that will provide you with a safe and reliable stream of income for the rest of your life. Download a complimentary copy of the full eBook today at - providend.com/publications/#r...
With a minefield of financial misinformation out there, we promise to be a safe pair of hands and a second pair of eyes to help you avoid costly financial mistakes. You can reach out to us for sound advice tailored to your unique situation: providend.com/our-clients/ser...
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Providend is very excited to share that we are now ready to extend our service offerings to the younger accumulators who are looking for holistic, independent, conflict-free wealth advice!
For this group of younger accumulators, we know that it is not easy to make retirement planning a priority when other financial goals - buying a first home, for example, or saving for a child’s education - appear more pressing. Learn how we can help here: providend.com/our-clients/acc...
Alvin is part of our team of Client Advisers dedicated to serving the younger accumulators in their wealth-building journey, learn more about their interesting backstories here - • Story of the Wealth Se...
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Learn more about:
▸Alvin at providend.com/alvin-neo/
▸Providend's Money Wisdom Podcast Season 3 at providend.com/providends-mone...
▸Our philosophy at providend.com/about/
▸Our publications at providend.com/publications/
Connect with Providend:
▸Facebook: / providend
▸LinkedIn: / providend
▸Website: providend.com/our-clients/ser...
▸Newsletter: providend.com/#newsletter-sub...
Thank you! This is very helpful.
Thank you for your kind comments, Victor!
you guysare angels explaining all this i didnt know a lot when my time came . i know better now
Thank you for your kind comments @jessiejames7492 and have a lovely day ahead!
Since the govt can change the cpf policy immediately effective from 2025 without consulting the public with the latest Feb16 budget 2024, just go for basic plan & BRS. Less payout but more $ in your own pocket. Manage ur $ wisely and enjoy your retirement. We are old enough. No need Gov to lock up all our monies till 65 and then give us monthly allowances where the amount can change and go down if cpf life is not sustainable.
Thank you for taking the time to leave a comment!
Good explainations. Thumbs up
Thank you for your kind comments!
Thank you sharinG. Learn a lot. Pls share more.
Thank you @SoloMetal for your words of encouragement!
Very informative, something CPF don’t tell us. All the while I thought standard plan is the best. But also depends on how much money you want to get in your living years and how much you want to bequest to your family especially if you are the only sole bread winner and does not have any other financial instruments in your portfolio. For financially wealth stable guys, the standard plan is a no brainer. If you want to YOLO, I think the Standard plan will get the most out of your living years.
Thank you @user-kl3hk8uw4u for your kind comments and encouragement!
very good!
Thank you!
Thank you very much for this video. It is very informative and these information are hard to get from CPF website. Your slides illustration are also very easy to understand. Now I am much better inform about CPF-Life.
Dear @sookiansheng, we are so glad you have found this video to be useful and appreciate your time taken to leave an encouraging comment! Have a blessed week ahead.
Informative.
I have a question. Does the Basic Plan works similarly to those on ERS? If ones passes on just after 65, does the bequest get the balance of R.A + interest + A.P ?
Hi Jessica, thank you for your question. Yes, your understanding is correct and the bequest will be balance of R.A + interest + A.P for those on ERS too. Hope this helps, cheers! - Alvin (Client Adviser)
With dependents, BASIC plan is best.
For self, either standard or escalating. Short life - STANDARD. Long life - ESCALATING.
Not enough can go Comcare for assistance no need worry
Actually if you do a 'first principle' calculation on the way CPF computes the way the RA lump sum at age 65 is being drawndown, occuring over the months, and at the same time accumulating the monthly interest based on the lower monthly principal of that month, based on the monthly payouts that CPF pays for the Basic Plan, you will probably find that the RA lump sum will get you to about age 95 (for men) and age 97 (for women) before it depletes to zero value. How many of us will really get to age 95 or 97 when the average age we expire is about age 80 (for men) or 86 (for women). It would seem that the way CPF LIFE is being conceived is kind of conservative in its payments/computations.
well say Thank you
Thank you very much for your kind comments and have a blessed week ahead!
Thank 👍👍👍💖
Once again, thank you!
Hi providend Thank you for the videos, but can you check if the numbers are correct ?
1. @12:37. you mentioned that CPF basic plan will carry on paying until 90 ? 730 X 25 years is alot of money before AP kicks in, Correct me if im wrong, but shouldnt that number be 80 ?
2. @22:08. It seems that escalating is not escalating ? its the same numbers throughout and worse so even lesser than standard.
Hi @cheesepieist, thank you so much for your comment and sorry for the late reply!
On the CPF Basic plan, about 80-90% of the RA savings along with the RA interest will be able to provide payouts until age 90. You can refer to this link on the CPF website for more details: www.cpf.gov.sg/member/faq/retirement-income/monthly-payouts/what-happens-to-my-ra-savings-when-i-join-cpflife
On the Escalating plan, thank you for pointing the error out. We will take note for future videos. You are right that the numbers should be going up at different ages. The estimated payout will be as follows :
Age 65 : $1,126 - $1,252
Age 75 : $1,373 - $1,526
Age 85 : $1,673 - $1,860
Age 95 : $2,040 - $2,268
Hope the above helps and I wish you all the best! - Alvin, Client Adviser
This is better than all the FAQ in the cpf web Thank u!
For basic plan , between 65 and 90 , does the RA balance continue to attract interest ?
As i understand it, all 3 plans earn interest. However, only interest in the Basic plan still belong to you until draw down to zero. For Standard/Escalating, the interest goes into a common pool, to pay those who live a super long life
8@@anhoi6969
Hi @user-zs4rr7yl3p, thank you for taking to comment.
For Basic Plan, the RA balance continues to earn interest between 65 and 90.
Hope this helps and have a blessed day ahead!
Can you give me the exact calculation for the basic sum of how you derive to the bequest amount for each year?
Hi @zYMz, thank you for your question. The bequest amount shown was generated from CPF website few years back when the CPF LIFE estimator still showed the bequest amount. The projection for bequest amount has been removed in the subsequent revamp of the CPF LIFE estimator. Hope that clarifies, thank you. - Alvin, Client Adviser
In essence, if you think u will die early, choose BASIC plan.
if you think u will live long, choose STANDARD plan
When you say total CPF : $200k is total of all 3 OA, MA and SA or just OA and SA? I thought MA is not calculated as part of the min sum?
1:08 listen again~ he did say what the 200k comprises of~
HI Victor
I have a question.
I understand Interest earned on CPF life is pooled together and will not paid to beneficiary when a member dies.
How about interest in OA after a member meet the FRS in RA.
The balance funds in OA, the interest will it pay to beneficiary when a member pass on?
I guess Medisave Account is not included in CPF LIFE
so definitely the interest is pay to beneficiary?
Am I right?
Thank you
Dear @nancylim5221, thank you for taking the time to leave a question.
When a member passes on, everything in his/her OA, SA, MA and RA (including interest earned in those accounts) will be distributed to his/her beneficiaries. In addition, any unused CPF LIFE premium will be distributed as well.
Hope this answers your question and have a lovely evening ahead.
@@ProvidendSG Thank you for your reply!
Much appreciated.
what plan should i choose if i want to leave the least amount to the AP ?
Hi @bigno1900, thank you for your question. Between the Basic & Standard Plan, the Basic Plan will have lesser amount going from your Retirement Account to form the AP. Hope this helps. - Alvin, Client Adviser
Good video, I recall an agent told me, get kids to pay monthly of 100, so u can stay on standard and they get better payout
Thank you @far-red for your kind comments. :)
Hi
@Providend I have a question.
My friend is 69 years old. She joined CPF Life
Receive payout every month.
Now she still have funds in OA and SA account.
Can she draw funds out from her SA to buy Singapore Savings Bond if she wants to invest?
Thank you
Hi @nancylim5221, thank you for asking your question on behalf of your friend.
Assuming she has reached her cohort FRS in RA at age 55, she can freely withdraw funds from her SA and invest in SSB. However, the current SSB tranche offers a first-year interest rate of 2.95% and 10-year average return of 3.04%. She could leave her funds in SA now to enjoy at least 4% interest rate till end of the year.
Her SA would be closed and transferred to OA early next year. By then, she can look at what are the rates in relatively safe instruments like SSB, T-bill, FD and decide to invest in them if the rates are better than the baseline OA 2.5% interest rate.
Thank you and have a blessed day ahead!
@@ProvidendSG Thank you for helping to answer my queries!
Greatly appreciated.
Question: The property BRS mean when we death the property will belong government?
Hi @trd7538, thank you for your question.
CPF was set up to ensure retirement adequacy for Singaporeans & PRs and CPF LIFE payout gives us a very basic retirement lifestyle. When we pledge our property, we are essentially saying that we have a roof over our head and do not need as high monthly payouts from CPF LIFE to cover for rental costs. Hence, CPF allows us to keep only BRS in our RA and withdraw anything above that.
In the event that you were to sell off the pledged property, the proceeds of the sales will go back to your RA to ensure you have a higher monthly pay-out at retirement. The property ownership does not go to the government when you put a charge on the property for CPF withdrawal, whether upon death or alive.
You can read up more here : www.cpf.gov.sg/member/faq/home-ownership/housing-scheme/i-may-either-be-selling-my-whole-property-transferring-or#:~:text=If%20you%20are%20selling%20your,top%20of%20the%20P%2BI.
Hope the above helps, cheers! - Alvin, Client Adviser
Why cpf board didn't brief us on this scheme. This is withholding information
Is the payout of $780 / $800 used in your illustration arbitrary or the actual projected? i thought the CPF life calculator shows at least $1400 for the standard plan 😮
Hi @channie8912, thank you for your question. All the payout figures are estimation using the CPF LIFE Estimator when the presentation slides were prepared with: www.cpf.gov.sg/eSvc/Web/Schemes/LifeEstimator/LifeEstimator
The estimated payout amount depends on several factors as given in this CPF LIFE FAQ: www.cpf.gov.sg/member/faq/retirement-income/monthly-payouts/how-are-the-cpf-life-premium-and-payout-for-each-plan-calculated
Some of these factors (like CPF interest rates and mortality rates) can change from time to time, therefore the estimated payout amount used in the presentation can be different from the figure you know.
Do take note that the payout shown in the presentation was based on BRS ($99,400), whereas your $1,400 figure is probably based on FRS ($198,800). Hope this helps. - Alvin, Client Adviser
How can I go from standard plan to basic plan now? Every year I am contributing 8k to RA to get the tax relief too.
Please tell me how to move to basic plan?
Hi @purpletulip6499, thank you for your question. You will be given the option to choose between the 3 plans (Standard, Basic & Escalating) just before you turn 65 years old, which is the age that you will be eligible to start receiving CPF LIFE payout. Hope this helps!
If we choose the basic plan, would the balance in RA be flowed back to OA for our withdrawal?
@@opheliasoh9358 RA won't flow to OA. Under Basic Plan, about 10+% will go to Annuity Premium and remainder will be use for your monthly payout. That's my current understanding.
How does enhanced plan work?
Hi @flowertowerrr, thank you for your question. I’m assuming you are referring to the Enhanced Retirement Sum (ERS) . At 55 years old, CPF will by default use money in your OA & SA to form the RA up to the Full Retirement Sum (FRS). However, you can choose to top-up your RA to raise the level from FRS to ERS. ERS is the max amount you can contribute into your RA and in turn you will receive a higher monthly payout from 65 years old compared to if you were on FRS. Hope this helps. - Alvin, Client Adviser
A person born 1953 the minimum retirement needed this year(2023)
Ànd the amount under CPF life pay every month.
at age 65 before monthly annuity payment
@2157 the display of PAYOUT ERR
Where is the INFLATION CALCULATOR IN ALL THESE ASSUMPTIONS/ PREDICTIONS? ALWAYS SO LINEAE IN SUCH PRESENTATION
Informative but simple thing made gratuitously lengthy and complicated lor
Thank you for taking time to leave your feedback!
you are using our money to pay us back and we only could get your payment back provided we can live long enough until 90 years old. I don't get any Suprise after living long enough until age of 90 and after. What is the purpose of buying your plan? Unless we need to plan the payout lum sum upon death for our next of keen. I think this is not a good plan.
Thank you for taking the time to write this comment, @KelvT1!
Very confusing about the sum and timeline
Thank you for taking time to leave your feedback!
Most people do not like about cpf life because it is at 65 . Now people want to live for the present and enjoy and things that is tangible.😢. The world is now very uncertain.
And then blame gov for ppl not thinking long term
Its a case of Grief now Spend later or Spend now Grief later.
3:24
Correction, it’s hundred thousand and six hundred
How can I withdraw all my CPF at age 55.
I don't want to stay in Singapore.Could you advise me to take out all my CPF and leave the country 😊
you can give up SG citizenship and get another country citizenship, then u can draw all money in CPF
Hi @EverEver-uj9tl, thank you for your question. You may close your CPF account and withdraw all your CPF money upon renunciation of your Citizenship or Permanent Residency. You can refer to this webpage for more details: www.cpf.gov.sg/member/account-services/account-closure/closing-your-account-when-you-leave-singapore
Hope this helps. - Alvin, Client Adviser
How is the payout value derived? This is never transparent. CPF decide the value they want to give.
Hi @ktleong7116, thank you for your question. You may refer to this CPF LIFE FAQ: www.cpf.gov.sg/member/faq/retirement-income/monthly-payouts/how-are-the-cpf-life-premium-and-payout-for-each-plan-calculated
The payout amount is determined by factors such as RA savings, gender, age, CPF interest rates and mortality rates. Hope this helps. - Alvin, Client Adviser
any senario for SgPR that going retire in west Malaysia. Can they still retain cpf for cpf life?
Remain PR then will have CPF life. If Cancel PR then no more CPF life for them. Upon cancel PR they can take all the CPF including Medisave. Go invest into safe and diversify share and bond portfolio then pray the investment dun fall during the first 10 years of your retirement life. then when you need the money for daily use sell the portfolio using the 4% annual withdrawal rule
@@ggc9898 my worry is when turn in 55yo or 65yo then i wish go back west malaysia for retirement or break of work, heard if 2/5 years not working in SG will terminate PR entry permit then need withdraw PR. so, how can someone who wanna retire in malaysia but retain PR if he is single and no property in SG.
Hi @fynnneo4536, thank you for your question. You will need to hold a valid Re-Entry Permit (REP) to retain your Singapore PR status when you retire in Malaysia. Please refer to ICA website for the details on REP Renewal: www.ica.gov.sg/reside/PR/apply-REP
According to the ICA website on PR Eligbility: www.ica.gov.sg/reside/PR/apply
ICA will consider various factors to assess the applicant's contribution and commitment to Singapore.
If you are single, not working when you retire, and no property (investment) in Singapore, it is at ICA's discretion whether to grant you REP when you apply for renewal. Should ICA reject your application then, you can try to appeal based on past contribution and hope that they take that into consideration.
As a contingency, do have an alternate retirement plan without CPF LIFE in case you lose your PR status. Hope this helps. - Alvin, Client Adviser
Any amount receive after 80 yrs old is 'meaningless'. Just give our money back when it matters the most.
I am past 55, the minimum sum increases over time, if this continues my nephew when he is 55 minimum sum is close to 450,000😢😢😢😢😢😢😢😢😢😢😢😢
You need to create a new content base on pay and pay new sucks scheme
Thank you for taking time to leave a comment!
The thing is CPF is A VERY BLUNT TOOL TO FORCE SAVE FoR THE FUTURE. provided the person is healthy at that age to enjoy😢
CPF Life is a scam by using the life span. How many can really live beyond 85. And even can is theee quality of life or in the hospital with all the tubes
Thank you for taking the time to leave a comment!
CPF Life annuity payout is biased against women. If a woman gets between $100 to $200 less than a man per month, the difference will add up to between $1200 to $2400 per year. If she lives to 85 (which most men do) she would have received between $24000 to $48000 less than a man in 20 years. Based on the same premium paid, this is grossly unfair and definitely no equality at all. Could this very important equality issue be looked into? And may the treatment of elderly women be equal to elderly men. As most of the elderly women have already been subjected to much inequality in their lifetime, I hope it’s not too much to ask for these ladies to be treated fairly in their golden years.
why a woman gets between $100 to $200 less than a man per month? where does this rationale come from? How much you get depend on your RA account, which also depends on how much you willing to leave untouched at age 55 and what is your earning capability during your working life contributing to CPF.
It is premised on statistics. The actuary cannot go against data. For the difference to be made good, there needs to be policy intervention (or men and women have no differences in mortality rates). And the monies have to be funded from somewhere.
If the reason contributing to the data and fact are because of wage inequality between men and women, the policy should be on the wages. Once it's solved, the cpf problem per se will be solved. Solve the root cause is what I want to say
Wow poor women. Living longer than men and want more money? Want to trade life for money?
There is no gender bias in the actual statistics. Pple can discriminate. But numbers and facts does not.