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Alamak, another blog post on the CPF?
Quick, those who are tired of the topic, close the window!
Still reading?
OK lor.
My mother is going to be 70 years old next year.
When she turned 55, $65,000 was moved into her then newly created CPF-RA.
That was the minimum sum for her cohort, apparently.
My mother is still actively employed but is thinking of retiring soon.
Mom:
"Ah boy ah. Can help me go into my CPF account online or not? I want to see how much I have now."
AK:
"You want to see how much money government gave you, is it?"
Mom:
"Aiyoh, cannot be a lot lah. Maybe now my CPF-RA will have $80K or $90K lor."
AK:
"You will be pleasantly surprised."
After 14 years, what has happened to the money in her CPF-RA?
This happened:
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| Click to enlarge. |
$118,709.04
Mom:
"I so stunned like vegetable! Haha."
Stunned already can still laugh?
OK, no need to call ambulance.
If there is a need for it, this will provide her with a monthly income.
What?
People say don't be stupid to top up your CPF-SA?
OK lor.
Related posts:
1. Get 6% from CPF?
2. Financial strategy for elderly?
3. Retirement funding adequacy.
Bloggy Award
9 comments:
A reader, Jerry, on my FB wall:
"... so many people rather contribute $500/month to an ILP which only breaks even 14-15years ltr, when they can actually nearly double their money simply with special accounts interest."
The only problem here is you can't choose when you want to start the draw down(earlier). It will be determine by the govt which set it at 65 minimum currently with the potential to increase to 67.
Thus, no matter which CPF Life plan you choose - standard or basic, it will takes raftly 20 or 25 years to get back what you've initially put in at 55 plus interest earn over the years.
That said, how many people can live beyond 85 or 90 years old? 10-20% per cohort? And even the beneficiary of those who pass on early cannot take back the full un-drawn sum plus interest earn as some money will go into buying of the insurance(annuity)especially for standard plan which will become almost ZERO dollars after ~13-15 yrs?
Any comments?
Hi iwimsasl,
The reply was getting longer and longer. So, I decided to make it a blog post. ;p
Please see:
Worried you won't live to enjoy all your CPF savings.
;)
I'm all for using cpf as a tool to build retirement fund. However, now I'm thinking that I might be having too much concentration risk in the current system...what if in future, cpf scheme doesn't work for me anymore?
Hi pf,
We can only plan based on what we know. For what we don't know, there is insurance but only up to a point. I don't want to over-analyse which might let fear set in, paralysing me from taking any action. There are worse things that could happen.
hi AK ,
i am looking at optimizing my parents CPF.
currently both of them are above the withdrawal aged.
their balance are less than the FRS (coz the bulk of it are in the OA)
and one of them already bought an annuity.
qn: can they move all their OA monies to the RA acct to get the 4% interest?
if i do so, they will be over the ERS(the highest tier). and still have balance left over.
since they are passed their withdrawal age, they should be able to draw down the interest from the RA account?
i tried to look at cpf website. but there dont seem to be any info if there is a cap on the RA acct to earn the 4%.
Hi fc,
I suspect that if they are allowed to do a transfer, it is only up to the prevailing FRS.
I think you might want to give CPFB a call on Tue to find out. :)
Your elderly parents don't believe in the CPF?
See what happened to my mom's $65K CPF savings.
My parents say don't be stupid to top up CPF.
Reader:
I just discovered your blog and I plan to maximize CPF benefits like you. I got very excited about how senior members get up to 6% interest and told my parents to top up their retirement accounts but it is not easy to convince them.
AK:
You might not have read this blog yet.
Try showing this to them.
No better way than an actual example.
Of course, please explain that the money is meant to fund their retirement and they won't be allowed a lump sum withdrawal from the CPF-RA.
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