What is the actual annuity return you are getting if you can live till the average age of 80 for men (or 85 for women)? Is it 4%, 2.5%, or even negative?
Holy cow! Seems like nobody can give you a reply or the relevant personnel in the know refused to acknowledge this question and/or refused to answer this question for all to hear?
Fret Not! You can easily find out the truth now by using the calculator I have here where you can calculate the payout you are supposed to receive based on the expected annuity return you desire (which should be 4% according to CPF) if you can live to certain age!
Note that there are 2 ways to use this CPF Life payout-return online calculator:
(a) You can compare the CPF Life payout you ACTUALLY receive to the CPF Life payout at desired return (calculated using this online calculator) to see whether you are being over-paid or under-paid for your participated annuity (based on the average life-span for men (80) and women (85)) if you key into "Age you expected to live until in (Years)" as 80 (for men) or 85 (for women).
(b) You can keep varying the input number of "CPF Life desired return you would like (%)" such that you get a % figure which gives a CPF Life payout (given by "CPF Life payout at desired return") which is same as the ACTUAL CPF Life payout amount. In this way, the % figure basically gives you the implied annuity return of your CPF Life (for a given "Age you expected to live until in (Years)", which we usually use 80 for men and 85 for women (this is the actual statistical life-span of Singapore's men and women).
This is for fun but the truth will shock you!
For
example, if you have participate in the CPF Life Standard Plan’s Full
Retirement Scheme (previous called the “Minimum Sum”) with an amount of
$161,000 at 55 years old, then according to the CPF Life payout given by CPF
which is about $1300 per month, and if you project that you can only live till
average age of 80 years old (for men; 85 for women – statistically only <50%
of men can live pass 80 years old and similarly for women is 85 years old) and
assuming bequest = $0 if you live till/pass average age (which is typical of
such annuity programme), then the actual CPF Life annuity return you are
getting is actually -0.88% (a NEGATIVE return)!
I
think the above truth should call for more transparency from CPF regarding the
actual annuity return of CPF Life and the amount of unpaid accumulated reserves
(aka profits made by CPF) instead of treating CPF Life’s financial account as a
secret!
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