Skip to main content

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


Comments

Post a Comment

Popular posts from this blog

Expenses of a middle-classy Singapore uncle with family

I don't know what exactly is considered middle-class in SG, but I figured its the fat range in the middle section if we were to line people up based on income. There will be a steep drop off from the bottom 5% and a steep surge from the top 5, and another galactic surge from the top 1%. Uncle is pretty sure I am in that middle chunk of 90%, and based on my estimation, should be in the front 30 percentile in this chunk. Now, this is how my expenses look like for myself (excluding what my wife contributes). The numbers are on per month and in SGD Car expenses (loan, insurance, maintenance, tax, fuel) = $2,500 Insurance premiums = $800 Utilities bill = $350 Mobile lines for 5 = $90 Home internet line = $30 Services (Netflix, Spotify, iCloud) = $60 Condo maintenance fees = $350 Property tax = $250 Groceries and take out meals = $1200 Allowance for my parent = $1000 Allowance for kiddos = $200 School fees for kiddos = $150 Tuition fees = $270 Piano, and music classes = $900 Sub-Total fo...
Post a Comment
Read more

The joy of freedom

As a parent with young school going children, you want to be there for them all the time, being available when they need help, guidance, company etc. You also want to not miss major milestones, achievements, celebrations as they grow up.  This by itself is a luxury that not many parent can afford in Singapore. With most families having both parents working full time, what happens to their kids? When they are very very young (below school age), there's full day childcare, either with professionals or with extended family help. When they start going to school (primary, secondary), there's after school student care options, or someone could be at home (a grandparent), or a live-in domestic helper, or maybe even just the kids will be home alone after school and before parents leave office.  Then when you finally got vacation leave approved, maybe for 7-10 days a stretch, you plan efficiently for your family overseas trip, squeezing as much itinerary as you can possibly afford to, ...
Post a Comment
Read more

Getting comfortable without a salary from working

 Not sure if I am there yet. Basically I am effectively drawing down my cash each month, primarily due to 2 things : mortgage and income tax mortgage (after CPF) is about $9k per month income tax is about $5k per month My investment cashflow covers all my other expenses, including utilities, groceries, handphone/internet bills, insurance, property taxes, condo maintenance fees, personal spending. With some input from wife who is still working, I am still out of pocket by almost $11k per month.  She will continue to be able to save a decent sum per month and I'll let her grow that and managed it for her via safe investments. Am I comfortable? Not really. I will if I am not out of pocket per month. If I really stop working for good, the income tax amount will go to $0 after 2025. So only mortgage left We can pay off the mortgage but I think I said before, it doesn't make sense since it's our home and we will be locking the money up with little leeway to do other things. So I ...
Post a Comment
Read more