Buy the CPF-RA and win win!

Reader said...

Hihi, thank you for taking the time to answer my query. I was trying my luck and wasn’t really expecting a reply! Excuse me while I have a fan girl moment! 😍😍😍

The post which you recommended for my reading was the post that got me started thinking about my parents cpf! I tot it was a really brilliant idea! Would never have occurred to me 😂

We’re thinking to get the best of both worlds by converting my mom to CPF Life and ‘buying’ over my dad’s RA.

We’ll pay him the $XXXX in his RA by topping up my mom’s RA with $XXXX. And then convert my mom to CPF Life at 70 so they can get a fixed payment for the rest of my mom’s life. 

Not sure if hopefully is the right word to use in such situations, but statistically speaking, women usually outlive men, so that’s the bet we’re taking.





At the same time, we’ll top up my dad’s RA to eventually hit $30k while leaving him on the old scheme (i.e. Retirement Sum Scheme) so that we can get the 6% interest. This 6% will also be able to help us provide more for them if needed.

Would like to run it by you to see if there are any insights/ different perspective that we missed.

AK said...
You have cracked the code. Haha. 😜





It is a win win situation for the parents and for the child.

Brilliant, she is!

Related post:
CPF to help fund our retirement...

CPF to help fund our retirement but what about our parents'?

Reader says...
I am a new reader to your blog and have benefitted greatly from the nuggets of wisdom that you have shared within these first 2 weeks of reading your blog.

I have transferred money from my ordinary account to special account and managed to convince my Husband to do the same as well! Hopefully, we will be able to help the gov help us hit the minimum sum by the time we reach 55. We are in our mid 30s now : )





Because of your blog, it got us started thinking abt our parent’s cpf as well. We realised that our parents cpf balances are very dismal. Each one has less than $10,000.

We are hoping to top up their RA until it hits $30k eventually. However, they have the option of choosing between the old retirement sum scheme or the current cpflife.





The draw of the retirement sum scheme for me is that the 6% earn still belongs to my parents but under cpflife, once it is under the annuity, the 6% goes to a common pool for the gov to maintain this plan.

Could you talk to yourself and share what your through process would be in such a scenario?

AK says...
Welcome to my blog.

CPF Life is attractive because it pays us a monthly income for as long as we live but it is an insurance product and, so, it is about sharing risk.

Some people think they won't have a long life and brush aside CPF Life but, statistically, people are living longer.

How like that? ;p





You might also be interested in this blog:
How younger CPF members get 6% a year?

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When to get a private annuity?