Saturday, 6 August 2016

My Thinking on CPF Life

I have never considered CPF as part of my retirement fund when I made financial planning. Why? The policy is always changing and there is nothing much I can do about it. However, it is still good to keep up with CPF matters as it is still our money?

Reading the speculations about CPF Life Escalating Plan and CPF Lifetime Retirement Investment Scheme (LRIS), I know for sure what is my choice now. Things may change, but for now, it is quite certain.

My choice? CPF Life Standard Plan and no CPF Lifetime Retirement Investment Scheme (LRIS).

CPF Life Escalating Plan is for people who "suspect" they can outlive 87 years old - The highly possible age to break even the CPF Life Standard Plan. Knowing my track records of falling sick easily and childhood medical conditions, I doubt I need to "worry" about living over that age. There is another good method to guesstimate your lifespan. Look at your parents, grandparents and great-grandparents' ages. My father is still healthy at 61 but have some medical conditions. My grandparents didn't reached 85 years old for sure.

Having said that, the differences are marginal between various plans. It will not be deadly if you choose the "wrong" plan. We are just playing with probabilities.

How about CPF Lifetime Retirement Investment Scheme? Seriously, I don't want to talk about it until more details have been shared by CPF Board. I would take the 4-5% guaranteed interest from CPF SA as I would have enough risk from personal portfolio, which I have more control over. CPF is like a survival fund, more certainty is good, and it is already packaged with a lot of questions marks.

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