Dear Mr Tan
I am approaching age 55. Should I leave my minimum sum in the CPF to earn 4% per annum, or take it out to buy a life annuity? I am confident that you can give your impartial advice. Thank you.
You should take to an insurance adviser from NTUC Income or visit the business center to talk to a salaried adviser. You can compare the difference and make the best decision for yourself.
In my frank view, the life annuity with NTUC Income is likely to earn a long term rate of return of about 4-5% per annum. This should be as good as CPF or slightly better.
However, the life annuity has an element of risk pooling. It guarantees payment of the annuity for as long as you live. You do not have to worry that your money will run out earlier. (In the case of the CPF, the money is expected to run out after 20 years (ie when you reach age 82).
However, if the annuitant dies younger, a part of the principal or interest is left behind in the pool to pay the benefit to those who live longer.
There are also difference in the amount of payment. The life annuity from NTUC Income pays out less during the initial years and increases with bonus. The rate of bonus vary yearly according to the investment yield.
If you are not sure, it is all right to leave the money in the CPF to earn 4% per annum. This is an attractive rate of return.
Do take your time, before you make a decision. Either way, you should be happy with the decision. In both cases, the products give good value to the customer.
- ► 2013 (314)
- ► 2012 (1270)
- ► 2011 (1873)
- ► 2010 (2369)
- ► 2009 (1655)
- ► 2008 (2105)
07/15 - 07/22
- Invest in a low cost fund
- Renewal of motor insurance
- A cooperative has to answer to its members
- Underlying assets of structured products
- Consumer Protection on Mortgages - USA Experience
- Negative aspects of Singapore system
- The Day When Singapore Panicked
- Credit card for students?
- Singapore Dollar and the Carry Trade
- Sub-prime mortgages in America
- Good financial products
- Structured products in America
- Customer-friendly Call Center
- Give your full name
- Logic9 (Sudoku)
- An efficient public service
- Well rated Bonds
- Risk of credit default
- Cash back on a Term Policy
- What's bad about the Singapore system?
- Confusing Message
- Owned by the people
- CPF or life annuity
- Did you invest in these structured products?
- Risks of investing in Structured Products
- Credit Default Swaps
- Pinnacle Notes - 2 views
- Pinnacle Notes - do you know the risks?
- Good experience with structured products
- Return from various types of investments
- A customer focused organisation
- CASE Website
- Use of ATM in other countries
- Surgical Schedule
- A simple medical insurance product
- What product is suitable for my age group?
- How can CPF be improved to give a better return?
- What's good about Singapore
- National Day - Sudoku (Logic9)
- ▼ 07/15 - 07/22 (40)
- ► 2006 (696)
- ► 2005 (159)