Saturday, April 25, 2009

Get a better return from CPF retirement account

Mr Tan,
I bought the annuity in 2002 with my CPF. At that time I have faith in the Company. Today if I wish to surrender, they will pay me $X ( after about 6.5yrs ) And if I were to continue with the annuity policy, I will get about $Y p.m. 

I have substantial savings and have not make any withdrawal from my CPF. I have been following the development and I do not expect INCOME to pay any attractive yearly bonus.

 I am not sure is it better off if I had not take up this annuity and leave this sum in my CPF retirement account which many of my colleagues had done. I am prepared to keep the sum in my CPF. I am still working and no financial problem. Pls advise whether I should surrender the policy..

It is better to terminate the annuity and put the money back into the CPF special account. The surrender value that you get now represents a return of 3.9% p.a. for the last 6.5 years. It is slightly lower than the 4% given by CPF on the special account, but the loss is slight and can be ignored. It is better to look forward and get (hopefully) a better return from the CPF in the future. All the best!

1 comment:

zhummmeng said...

Bonus will be cut soon and that pushes the risk higher. You may get higher payouts or lower than before.
It is better to surrender and return it to CPF. You may be able to buy the CPFLIFE and get higher return.

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