CPF life ERS

 So, say the ERS sum is $450k when I am 55

This amount, assuming 4% pa returns compounded for 10 years until I am 65yo, becomes $665k.

Assume I get a monthly CPF life payout of $3500 from age 65…

That’s almost 16years to drawdown the $665k

However, the fund continues to compound 4% while I draw it down.

Based on that, the sum will run out in about 24years, when I am 89years old.

So if I live beyond 89, I get some extra back!

Maybe some folks will think…hey I can easily get 5% pa returns or more myself, so why settle for 4% pa?

Now, that’s a very risky assumption. You are assuming you can consistently get such returns year after year, and also assume you are lucky enough to not have to go through multiple years of bear markets during your retirement years!

I wouldn’t think I can do that, plus the stress and cognitive decline that comes with advance age.

So plonking down for ERS is no brainer for me, since I can still sustain my lifestyle after that setting that sum of money aside at age 55. Sustain for 10years until CPF life payout starts at 65.