CPF Minimum Sum pays $1,296 monthly?

According to the CPF Board web site’s CPF Life Payout Estimator calculator, a 55 year old male meeting the current minimum sum of $155,000 will get an estimated average monthly life annuity of $1,296 from age 65, under the default Standard Life plan.

Bequest is $0 at age 85?

The estimated average bequest at age 65, 75 and 85, is $102,766, $44,034 and $0.

Computed as at 20 Aug 2014 The inputs that you have provided, • Gender : Male • Birth Date : 1 Aug 1959 • Citizenship : Singaporean • Retirement Account Balance : $155,000.00 • Annual Value of Property : Less than or equal to $9,500 • Annual Assessable Income : Less than or equal to $27,000 Based on your inputs above, • Your estimated LIFE Bonus : $3,300 • Your preferred plan type is the LIFE Standard Plan. Plan LIFE Standard LIFE Basic Description of the plan This plan provides a higher monthly payout than LIFE Basic Plan, but leaves a lower bequest for your beneficiaries. This plan provides a lower monthly payout than LIFE Standard Plan, but leaves a higher bequest for your beneficiaries. Monthly payout1 from 65 $1,230 – $1,362 $1,120 – $1,243 Bequest left for your beneficiaries at selected ages2 Bequest at age 65 $190,215 – $195,317 $227,474 – $238,435 Bequest at age 75 $42,813 – $45,255 $164,892 – $174,973 Bequest at age 85 $0 $74,893 – $79,212 Bequest at age 95 $0 $0

CPF Life vs Retirement Account withdrawals?

Using 4% interest plus an extra 1% on the first $60,000 – the accumulated sum at age 65 is estimated to be $236,930.

Worse off by $44,164 at age 65?

So, if one dies at age 65 – he would in a sense, have lost $44,164 ($236,930 – $192,766 bequest).

After withdrawing $1,296 monthly until age 75, the account balance is estimated to be $168,076.

Worse off by $124,042 at age 75? 

So, if one dies at age 75, he would in a sense, have lost $124,042 ($168,076 – $44,034 bequest).

After withdrawing $1,296 monthly until age 85, the account balance is estimated to be $62,838.

Worse off by $62,838 at age 85? 

So, if one dies at age 85, he would in a sense, have lost $62,838 ($62,838 – $0 bequest).

The account is estimated to become $0, after 24 years, or after 89 years old.

Live beyond age 89 to be better off?

In other words, one has to live beyond age 89, in order to be better off under the CPF Life Standard Plan, compared to just making monthly withdrawals from one’s Retirement account, until the money runs out.

What is the probability that a male will live beyond age 89?

Note: The above is based on one getting an  estimated LIFE Bonus of $3,300 because the Annual Value of his Property is Less than or equal to $9,500, and his Annual Assessable Income is Less than or equal to $27,000.

Otherwise, his estimated monthly life annuity may be lower at $1,272. And correspondingly, he may have to live beyond age 90 in order to be better off under the CPF Life Standard plan.

Female has to live beyond age 95 to be better off?

Similarly, if you are a female, your estimated monthly life annuity is even lower at $1,158 – and correspondingly, you may have to live beyond age 95 in order to be better off.

So, what’s the probability of a female living beyond age 95?

S Y Lee and Leong Sze Hian

P.S. Come with your family and friends to the
3rd Return Our CPF protest on 23 August 4 pm at Speakers’ Corner https://www.facebook.com/events/648543138548193/?ref=2&ref_dashboard_filter=upcoming