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CPF life

 Uncle is 50 now

And I have about $274k in CPF SA. If I no longer work, this SA account will compound 4% pa for next 5years and become $333k, when I reach 55yr of age.

Current FRS is $213k, and I estimate it will hit $250k by then. So ERS would be $500k. This means I’ll just need to top up in cash, $167k, and enjoy a higher payout from CPF life from age 65, for life!

I estimate this would be probably $3-4k per month for life. Which is at too shabby at all. In fact, it is a livable income on its own. 

What’s more, I won’t have to worry about managing the investments for this base amount of income for life. Should my own investments outside CPF life goes kaput, I fall back on CPF life lor.

The key is to be able to sustain my lifestyle from age 55 to 65, while waiting for CPF life ERS payout to kick in. 

I think this is doable. I target to generate at least $7k in today’s dollars, per month, from my investments. And I can even do some draw down during the 55-65 go-go years to enjoy life. And when I hit 65, the extra $3/4k from CPF life would then top up my monthly income even more, or level it out in case my investment cashflow drops for whatever reasons. 

I think this is a good deal for me. If I went with FRS, I could take out around $80k cash from CPF when I hit 55, but that means I lose $1-2k per month of lifetime payout from 65. Assuming I live to 83, that’s $216-432k of lost payout?!

So topping up with just $167k to go ERS seems like no brainer for me. 

Of course this is assuming I have sufficient funds to live nicely for 55-65, even after topping up to ERS


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