Dear Mr. Tan,
I have read articles in the newspaper and was quite convinced that I could get a "higher" monthly payout if I continue to ensure I have a big sum of money in my Retirement Account.
However, my CPF friends recently told me that the monthly CPF Life payouts are based on estimates/ projections, just like what you see in a Benefit Illustration for an Endowment insurance policy.
These monthly payout values as illustrated in your articles and on CPF website are not guaranteed. I found the following fine print when I use the CPF Life Payout Estimator tool on the CPF website:
The monthly payouts shown are based on the Retirement Account balance provided. The payout ranges are based on interest rates of between 3.75% and 4.25% and do not represent the lower and upper limits of the payout. The monthly payout may be adjusted every year to take into account factors such as CPF interest rate and mortality experience.
According to my understanding, if CPF were to tell me now that when I reach age 65 in 10 years' time, my monthly Payout will range from a lower limit of $1,200 to a higher limit of $1,400, it simply means that the figures are only projections into the future. That lower limit of $1,200 can actually be much lower in a bad-case scenario of prolonged poor stock market conditions!
What are your views?
My answer is given here:
https://www.fisca.sg/ArticleDisplay.aspx?ID=613
I have read articles in the newspaper and was quite convinced that I could get a "higher" monthly payout if I continue to ensure I have a big sum of money in my Retirement Account.
However, my CPF friends recently told me that the monthly CPF Life payouts are based on estimates/ projections, just like what you see in a Benefit Illustration for an Endowment insurance policy.
These monthly payout values as illustrated in your articles and on CPF website are not guaranteed. I found the following fine print when I use the CPF Life Payout Estimator tool on the CPF website:
The monthly payouts shown are based on the Retirement Account balance provided. The payout ranges are based on interest rates of between 3.75% and 4.25% and do not represent the lower and upper limits of the payout. The monthly payout may be adjusted every year to take into account factors such as CPF interest rate and mortality experience.
According to my understanding, if CPF were to tell me now that when I reach age 65 in 10 years' time, my monthly Payout will range from a lower limit of $1,200 to a higher limit of $1,400, it simply means that the figures are only projections into the future. That lower limit of $1,200 can actually be much lower in a bad-case scenario of prolonged poor stock market conditions!
What are your views?
My answer is given here:
https://www.fisca.sg/ArticleDisplay.aspx?ID=613
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