FRANCIS NEO: To the uncle who complained about how the CPF Board is trying to hold his money hostage, I ask that he take a look at the numbers properly.
Facts:
Uncle has S$86,727.75 in his Retirement Account.
CPF offered him S$482 a month in payouts across 28 years
Uncle will receive S$162,000 over 28 years – twice the sum of what’s in his Retirement Account
If Uncle chose a 20-year payout, he will receive about S$400 every month across 20 years.
He gets more per month by stretching the payout over 28 years because of the new interest components introduced by the CPF Board.
As for the mean age that of 85 years old that has been referred to, he will receive S$115,680, which is still more than the amount he currently has in his Retirement Account.
Understand that “mean” means the average life expectancy.
The full range could reach from 65 all the way to 95.
So, let’s not jump on the bandwagon to slam CPF for everything single thing that people don’t understand because they don’t bother to think through things carefully.
The facts and figures are cold and plain and simple.
And they show that the CPF Board is giving this uncle a good deal.
Arthur Lee
January 30, 2019 at 11:36 pm
CPF,True, its t magic of compound interest. Its also true that our lives are fragile and uncertain. If one can be sure of good genes, good health and low inflation, pushing t boundary may be viable. Unfortunately for many of us, this magic of long term compound interest needs to be weighed against t realities of frial health n for some, an early trip to t land from which no traveller has ever returned.
Where's The Swiss Standard?
February 9, 2019 at 5:40 pm
The long term average returns of stocks conservatively is about 10%, government bonds is about 6%. Some notable sovereign funds have been about 8% while recent Malaysia’s CPF equivalent is about 6%.
Assuming a lacklustre return of 5% for CPF,that is conservatively about $350,000 total taking account of monthly payouts for 28years, then why is it only $160,000?? Where has the other half gone to? The real payouts based on market need not be a peanut of $480 but a reasonable livable amount per month.
Lee cowboy
February 11, 2019 at 10:11 am
Could someone calculate compound int based on original sum of 86k for 28 years.