Read? I am on Retirement Sum Scheme (RSS) (2)
Read? THE CONFUSING MATH BEHIND RETIREMENT SUM SCHEME AKA CPF LIFE PREDECESSOR
What CPF hasn't clearly stated the monthly payout from 85 to 90 and assuming starting payout at 65.
Based on Uncle8888 DIY calculator on his computed RA balance at 65. The CPF estimated monthly payout of $1,180 for 23 years estimated duration is close to his own calculation based on 4% CPF RA compound interest.
However; what is the monthly payout after 23 years from those accumulated extra interests compounded over 35 years is NOT known?
CPF calculator stopped functioning!!! Spoil liao!!! LOL!
Retirement Sum Scheme
Q Why is extra interest used to extend payout duration by up to 5 years after age 85 and not use extra interest to increase payout amount?
A
Using extra interest to extend payout duration ensures that more members are protected against the risk of outliving their payouts. In 2018, more than half of residents aged 65 were expected to live beyond age 85. This would mean that the majority of members on Retirement Sum Scheme (RSS) would outlive their payouts if the extra interest is not used to extend payouts for up to five years.
With the extension of RSS payouts up to age 90, up to two in three members will have protection against the risk of outlving their payouts.
Posts
Suspect CPF is pooling those extra interests earned together to support members from 85 to 90. payout will depend on sustainability of the pool
ReplyDeleteOfficial reply from CPF ...
ReplyDeleteWe refer to your enquiry of 20 December 2019.
We'd like to clarify that your payout will be calculated based on your current Retirement Account savings, to last you up to 20 years from your payout eligibility age (i.e. 65), with a base interest of 4% a year.
The extra interest paid by the Government (up to 2% per year) on your Retirement Account savings will be used to extend your payouts beyond 20 years, capped at your age of 90.
Members who are concerned about the risk of outliving their savings can consider joining CPF LIFE before age 80. This will eliminate longevity risk as they will receive CPF LIFE payouts for as long as they live.