Unfair FRS and ERS' CPF LIFE payouts compared to BRS'?

Reader says...
Singapore government seems to be steering the country to be more inclusive.

What does that mean?

It means if you have a lot of money in CPF, it will be used to tilt the balance or contribution to the needy individuals who do not have enough in their CPF.

As in FRS CPF Life is NOT exactly twice payout from BRS CPF Life.






AK says...
Of course. People who have greater ability to help themselves should do so and not lean too much on the government for assistance.

Reader says...
Should do so? Based on?

Retirement planning for someone who painstakingly TOP up with CASH should NOT be used as handouts to others.

This should be done in the domain of income tax... or those with CPF way above FRS or ERS...

FRS and ERS are for the sandwich class.






AK says...
The top ups you are making to your CPF account are not being used as handouts to help others.

It remains your own money as any excess above the FRS, you are allowed to withdraw at age 55.

Your CPF money is not being given away if you have the FRS in your CPF account compared to members who only have the BRS.

You CPF money is simply paid a lower average interest rate in comparison.

Reader says...
It is NOT equitable.

Your statement of “Your CPF money is simply paid a lower average interest rate in comparison” doesn’t bode well for the middle income who works hard and TOP up cash periodically to secure a comfortable retirement life.

It should NOT at any away tweaked so as to achieve FAIRNESS.

This can be achieved via OTHER means/Policies.






What does AK have to say?

When we reach 55 years of age, we will enjoy 6% interest on the first $30K, 5% interest on the next $30K and 4% interest for the balance in our CPF-RA account.

So, it is true that members who have the BRS will get a higher interest rate on average compared to members who have the FRS or ERS.

It also means that although the FRS and ERS are 2x and 3x more compared to the BRS, the monthly payouts from CPF Life will not be 2x and 3x more than the BRS'.







Although some with the FRS or ERS might think of it as being unfair to them, remember that the extra interest is really a bonus given on top of the floor interest rate of 4%.

Also, although the government might be seen as giving more aid to members with less in their CPF savings, in actual fact, all members are being given the same extra interest on the first $60K in their CPF-RA.

I don't think anyone should be complaining.







As Singaporeans enjoy longer life expectancy today, CPF LIFE helps guard us against running out of money during a long retirement.

Find out how CPF LIFE ensures monthly payouts for life in this video.





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