Query on property pledge for Min Sum

[piggo]

Hi Piggo
RA don run out ...they be transfer to buy CPF life.
Then CPF life pays u forever till u die.
If u die early then Cpf pays u back whatever is left WiTHOUT interest ...if u outlive your total amt( means nothing left to deduct then 0 when u died.)
The property pledge is just an artifically figure to top up part of the MS. If u or your beneficiary are alive when you choose to sell the hse then need to top up whatever u pledge.
When u die your benficiary gets back everything u have in CASH.
I hope my layman english helps.

Different schemes, i think. If already on CPF Life but after that make top up to RA, then might become mixed...

http://mycpf.cpf.gov.sg/CPF/my-cpf/reach-55/SubPage.htm

Minimum Sum Scheme

CPF LIFE will give you a monthly payout starting from your drawdown age, for life. It improves upon the Minimum Sum Scheme where payouts last about 20 years.

If you remain on the Minimum Sum Scheme, you may apply to receive monthly payouts from your drawdown age until your Minimum Sum is exhausted. Alternatively, to allow your payments to last longer, you may wish to start your monthly payments later.

Exactly my point, they are two different schemes.

Agree with CityFarmer that CPF is overly complex, the only valid reason I can think of is so that its claim that it's the "best" and "serves Singaporeans well" cannot be easily refuted.

[egghead]

the only valid reason I can think of is so that its claim that it's the "best" and "serves Singaporeans well" cannot be easily refuted.

Let me help out here by offering my extremely far fetched imagination of the reasons for the complexity.

In the beginning CPF was simply a pension fund.

After a few years, we (i.e. citizens) see the money in the account but cannot touch and told the Govt to allow us to use it to pay for our own roof. So Govt approved - but added some rules to safe guard.

Another few years past, we again ask the Govt to allow us to use for our medical expenses. So Govt approved - but again added some more rules.

Yet another few years past, we again ask the Govt to allow us to use for investments so that we can take responsibility for our own retirement. So Govt approve with CPFIS - but again added more rules to protect us.

Sometimes, when we look at a policy, we must remember that it was precisely because our Govt acceded to our (or our parents) requests in the past that resulted in the present state of affair.

[specuvestor]

^^ Totally agree with egghead. Sometimes we really need to figure out the cause and effect. Like I posted earlier, even this housing pledge is an offshoot due to using CPF for housing, which was a feedback from the public.

As to the reference that there are 2 schemes, there is only one currently: CPF Life. There is no choice to complicate things for us

CPF Life was an enhancement to MSS and only people born around 1945 had a choice of the 2. Most of us have no choice and either under one or the other... depending on your age.

[flinger]

I think there is a lot of misunderstanding. This is based on reading the various CPF articles. Please correct me if I am wrong.

There are 2 schemes.

Minimum Sum Scheme.
There is the Minimum Sum Scheme. This is an old scheme before CPF Life. It is applicable for two groups of people :

a) People who turn 55 before 1st January 2013 .
b) People who don't have the required 40,000 at 55 or 60,000 at DDA.

The MS Scheme provides a monthly payment until the monies in the RA runs out.

If you are already in the Minimum Scheme you can convert to CPF Life if you meet the requirements to meet CPF Life.


CPF Life Scheme.

If you turn 55 years old from 1 January 2013 and are a Singapore Citizen or Permanent Resident, you will be automatically placed on CPF LIFE if you have at least :

- $40,000 in your Retirement Account (RA) when you reach 55 years old; or $60,000 in your RA when you reach your DDA.

The CPF Life Scheme provides a monthly payment until as long as you live.

This is the basic simple facts.

[specuvestor]

Thanks Flinger I didn't know there is a $40k/$60k requirement to join CPF Life

And a correction to your post: "The CPF Life Scheme provides a monthly payment for as long as you live"

http://mycpf.cpf.gov.sg/Members/Gen-Info...vc/S-and-S

[flinger]

Thanx Specuvestor.

Corrected the wording.=)

Thanks Flinger I didn't know there is a $40k/$60k requirement to join CPF Life

And a correction to your post: "The CPF Life Scheme provides a monthly payment for as long as you live"

http://mycpf.cpf.gov.sg/Members/Gen-Info...vc/S-and-S

[WolfT]

Seriously, i thought it is common knowledge abt this MS Scheme and CPF life.
Its your money, your choice on whether u want to read up more on cpf ,Srs, topup cpfsa or how they works?
I think people need to at least do their homework before coming here for advise or rather come here to be spoon feed.

[flinger]

That is the requirement. But CPF says, you can still apply to join CPF Life which means you will not be automatically included and the payout might be really bad based on the amount you have. This might happen on a case by case basis. I would think.

Thanks Flinger I didn't know there is a $40k/$60k requirement to join CPF Life

And a correction to your post: "The CPF Life Scheme provides a monthly payment for as long as you live"

http://mycpf.cpf.gov.sg/Members/Gen-Info...vc/S-and-S