CPF Life - Standard, Basic and Escalating (2018) Plans

I went to the CPF Life Estimator to input my own data for $166,000 RA. The result is as follows.

Initial monthly payout at 65 　

Standard Plan - $1,205 - $1,315 (More for self)

Basic Plan - $1,094 - $1,198 (More for loved ones)

Escalating Plan - $946 - $1,043 ( More for the future)

You can see that the payout difference between Standard Plan and Basic Plan is marginal but the bequest from the chart is huge. (refer next post on CPF Life Bequest )　

This confirms my decision that I will opt for Basic Plan at age 65. Do look at the chart as worked from the CPF Life Estimator.

CPF Life bequest

CPF Life bequest - bequest is amount pass to beneficiary in event of premature death.

 

I input my profile and $166,000 from RA into CPF Life Estimator in CPF website.

In this case, I input death at age 75, take a closer look and you will understand my decision for Basic Plan because what is left to family is so much more. A difference of about $90,000 between standard and basic.

Logic is payout difference between Standard and Basic is about $200 per month, $2,400 a year and 10 years it is total $24,000 more received for standard plan over basic, but the bequest if conked, family received so much more for Basic Plan.

And I have decided to "upsize" to ERS $249,000. The amount of bequest would be larger.

By age 65, if you forget to choose, by default it will be on Standard Plan.

Why pay more, why pay so long ?

IN the course of last few weeks, client and some parents asked me about some savings plan their young adult children has signed up.

This is not new, many walk past road show at MRT or malls and was talked into savings plan.

Nothing wrong with savings plan, but it is not priority, but young person with low interest environment are prudent as most just want to make their money grow than letting it rot in the bank.

If endowment plan is a consideration, then really need to consider, if you take a 20 years savings plan, you need not pay 20 years premium to maturity.

There are plans that you pay 5 years premium for 10, 15, 20 years maturity or even plan a specific year for maturity.

You may even choose a longer premium term like 10 years or 20 years.

There is no necessity to pay all the way, by shortening premium term, there is a discount factor and you pay lesser in total.

Paying full term premium may not be the best solution if you can pay a little higher. Paying full term premium is to whose interest, I need not explain here. Commission is higher.

Finishing paying the premium early allow you to review with budget for the need plan as it goes along.

Strange why many would take up a plan than come talking to me, some too late as commitment has been made :)

Are you positioned for retirement ?

How well are you positioned to retire?

A timeline to plot your assets and for planning forward to achieve your goal is essential. How many of us have plotted our assets position to know if we are well positioned forward or to use it to plan for retirement. This is timeline I have been writing about for years in my blog.

Retirement planning do not start at retirement but now, way before you even think about it.