Friday, August 10, 2018

Delaying Monthly CPF LIFE Payouts?

There is an article talking about delaying monthly CPF LIFE payouts, see below:
https://www.areyouready.sg/YourInfoHub/Pages/News-How-Much-Will-I-Receive-in-Monthly-CPF-LIFE-Payouts.aspx?utm_source=facebook&utm_medium=bc&utm_campaign=bau&utm_content=receive-CPF-LIFE-payouts

FRS will be increased by S$5,000 every year. By the time I reach age 55, the required FRS will be S$256,000. This figure is very close to the CPF illustration of retirement sum of S$256,500.

This is a very good table to show you the monthly payout at age 65, 68 and 70. Let's take the example of retirement sum of S$256,500 at age 55.
Also, take the upper band of the monthly payout at age 65 (S$2,060) , age 68 (S$2,440) and age 70 (S$2,740) for comparison studies.


 
 
Comparison table
 
 
 
Delaying Monthly CPF LIFE payouts ?
 
From the comparison table above, the verdict is clear: stick to monthly payout at age 65.
 
I do not see the benefits of delaying. You only start to realize you get more total quantum when you live beyond age 85. S$497,760 compared to S$494,400. And you get S$3,360 more ONLY! Of course if you can live until age 95, the differences will be more. You can get S$48,960 more (if you start the payout at age 68) or S$80,400 more (if you start the payout at age 70). But, we are talking about age 95 ! : (

Hence, my choice is clear. Things that work, don't change.

I am happy to receive S$2,060 per month while it is my turn. Thanks CPF !
 

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