CPF Life Plans

last SG · 2009-09-15T09:48:55+00:00

what old issue, why alway link our CPF to temasek and all those losses, CPF lifeplan was created long before this crisis took place, i was in SIM doing HR w...

Rock^Star SG

Can we have some financial advisor's views on these plans?

After some reading thru on my own, I realised the plans can be beneficial in some ways. But the emphasis on the CPF websites and Straits Times seems to be on selling the plan. Nowhere does it cater a special section on the drawbacks of such plans. Nowadays as we buy financial products, the benefits and limitations have to be mentioned.

Rock^Star SG

Anyone?

maxtor SG

The way I see it, CPFLife is purely an extension to the current Minimum Sum Scheme. It gives more assurance that you will not outlive your savings.

About the only drawback I can come up with right now is that once you opt into a particular plan, you cannot opt out of it anymore.

maxtor SG

One more thing, there are CPFLife plans that do give higher payouts on the premise that there is not bequeathment. This means that if you are slated to receive payouts that are supposed to last for 30 years but you pass away on the 3rd year, there will be no refund of the remaining balance you are supposed to receive.

angel7030 SG

U dun talk rubbish lah,...who said no refunds, CPFlife plans come in 4 plans to choose from ya, three of these plans allow for a contributor to bequeath his savings to his beneficiaries if he dies while still on the CPF Life scheme.

The Life Plus plan gives the most in monthly payouts but will yield the smallest amount that can be bequeathed to beneficiaries.

On the other hand, the Life Basic plan gives the least in monthly payouts but provides the most should the contributor die. So dun anyhow talk rubbish ok.

maxtor SG

The Life Plus plan gives the most in monthly payouts but will yield the smallest amount that can be bequeathed to beneficiaries.

On the other hand, the Life Basic plan gives the least in monthly payouts but provides the most should the contributor die. So dun anyhow talk rubbish ok.

One more thing, there are CPFLife plans that do give higher payouts on the premise that there is not bequeathment.

I think you have an interpretion problem.

angel7030 SG

One more thing, there are CPFLife plans that do give higher payouts on the premise that there is not bequeathment.

I think you have an interpretion problem.

but u got more monthly payout, so it is up to you to choose, you want more monthly payout, ur beneficiaries get less when you mati,

vice versa, if you choose to get less monthly payout, yr beneficiaries get more when you mati...so now, it is between you and your beneficiaries decision. At the end of the day, i think CPF life plan may create certain family unrest.

"This means that if you are slated to receive payouts that are supposed to last for 30 years but you pass away on the 3rd year, there will be no refund of the remaining balance you are supposed to receive." you quoted.

I am not an intrepretor.

noahnoah SG

My rich friend told

me rich ppl dun need CPF payout to survive one

angel7030 SG

My rich friend told

me rich ppl dun need CPF payout to survive one

many rich people in my neighbourhood also told me, but when rebates come, they quietly go put themselves...dun think rich are not kiasu type, they are more thrifty and calculative than most of you, if not, how to get rich. The rich alway like to fool the poors and middle class into parting their money, they like to act blur, telling you investment no good, that one better, but actually the no good one is the very good one, and the good one is the one they waiting for you to put your money in..which is actually no good ya. When you are rich, people listen to you, that is where they can fool you ya, just like me, I tell those stupid poor uncles that my draftbeer is special one, that is why it is expensive abit, unlike other pub who mix up with water and dilute, they look at me also respect me and ordered alots to drink, and u just add in more cheap alcohol contents and they happily drink, paid...drunk also paid.

maxtor SG

CPF Life is an annuity scheme. This scheme is not very different from the current Minimum Sum Scheme (MSS), which is also an annuity scheme, just that the MSS is a limited-payment annuity scheme. The current MSS takes your minimum sum in your Retirement Account and gives you a monthly income over the next 20 years.

CPF Life takes your minimum sum and spreads it over the course of your life, thereby eliminating the concern that you will outlive your Retirement Account savings.

In my opinion, CPF Life offers you choices. By giving you 4 options on your CPFLife Plan, you are given some leeway on the type of monthly payments (whether higher or lower), and whether or not your loved ones will receive money in the event of your premature death. The current MSS can only offer a fixed amount for a fixed time period (20 years).

One more thought that just sprung my mind - The absolute interest you receive on your CPF Life Plan should exceed the absolute interest you receive on your MSS plan (currently at 4% p.a.). This is because the principal amount for CPF Life should theoretically be kept in the RA account for a longer period than that of the MSS Scheme. However I havent done any formal calculations so this is just a thought.

angel7030 SG

CPF Life takes your minimum sum and spreads it over the course of your life, thereby eliminating the concern that you will outlive your Retirement Account savings.

For ur info, those who are 50yo and above can opts out this plan, for those 50yo and below, it is compulsory to choose one of the plans. And also the plan offer a 5%p.a. interest.

maxtor SG

Who can join CPF LIFE? When can I join?
If you are 55 years or older in 2009, you can join CPF LIFE from
September 2009. Members who are between 52 and 54 years old can
join CPF LIFE from 55.
For those 51 and below in 2009, you will be automatically included in the
LIFE Balanced Plan if you have at least $40,000 cash savings in your
Retirement Account (RA) when you turn 55. Members who have less than
$40,000 can opt-in, if they wish to do so.

CPF LIFE monies will be invested in special Government bonds and
will continue to earn an interest pegged to the yield of the 10-Year
Singapore Government Securities + 1% to reflect the long term interest
rate. However, to achieve greater stability, these special Government
bonds will now have coupon rates fixed for a longer period rather than being
adjusted quarterly as is the present practice. CPF LIFE Funds will earn the
weighted average interest rate of the entire portfolio of bonds, so that
every member will enjoy the same rate. Monies in the Retirement
Account will also be treated similarly as they are also retirement monies
and would benefit from more stable returns.

Taken from: http://mycpf.cpf.gov.sg/NR/rdonlyres/B29DCEDB-FF83-4528-9B48-7B171C7CC477/0/CPFLIFE_Speech050909.pdf

angel7030 SG

hmm..i dun need to cut and paste also know...me attended Minister's Seminar on this ok

AndrewPKYap SG

This I suspect is just another effort by the cursed despot with a zombie wife and his ass licking cronies to hold on to Singaporeans' money.

OHSheet SG

This I suspect is just another effort by the cursed despot with a zombie wife and his ass licking cronies to hold on to Singaporeans' money.

Rock^Star SG

yes that is true. if one takes the fourth plan and dies early, no $$ bequeathed. Straits Times shd have published that.

deepak.c SG

Seriously, the payout from the plan and bequeath looks too good to be true.

charlize SG

This I suspect is just another effort by the cursed despot with a zombie wife and his ass licking cronies to hold on to Singaporeans' money.

Since when did they want to return your CPF monies quickly?

deepak.c SG

Maybe it's not as good as it seems, I didn't take into account that the payout starts at 65, so most likely you will enjoy 10 years of pathetic cashflow.

I thought the payout starts at 55 y.o. for 20 years, but it starts at 65 y.o., so if you live to 75 y.o., you only get 10 years payout, the rest ends up as bequeath (the figures are not provided by CPF Board to make any good financial decision).

seyKai SG

if payout starts at 65 year old, even they double the interest many of us would not be able to enjoy the fruits. so wat is the point?

i think the gahmen is trying to gun for money for temasick and payout for election