CPF replies to payouts until age 128
I refer to the CPF Board’s reply “Retirement payouts: CPF Board replies” (Today, Mar 31) to Mr Phan Pang Chia’s letter “Why should CPF retirement account last until age of 128?” (March 25) .
It states that “The payout duration depends on the Central Provident Fund member’s RA balance. Members who have received high amounts of voluntary top-ups to their RA may see a big extension of the duration.
Under such circumstances, members can apply to increase their monthly RSS payouts and shorten the duration. Alternatively, they can join CPF Life, which would provide higher monthly payouts, while ensuring that payouts last for life”.
Why payout to age 128 or CPF Life?
Why is it that one has to opt in CPF Life, in order to get a higher monthly payout?
For example, I understand that the monthly payout now for a person age 79 may be about $300.
If one has topped-up the Retirement Account (RA) to say $80,500 – opting for the CPF Life Standard Plan would give a monthly payout of $605 – $632 (male).
This may be more than double the monthly payout under the former CPF Minimum Sum Scheme (MSS).
Opting in CPF Life – lower bequests?
The downside of opting for for CPF Life may be the lower or 0 bequests (age 85 – $36,857 – $38,739, age 90 – 0) upon death, compared to the MSS which will pay the actual RA balance (age 85 – $57,400, age 90 – $31,900 (estimate based on $618.50 monthly payout)) on death.
Leong Sze Hian
