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Simpler CPF Life

>> Saturday, March 10, 2012

I am often asked about this new scheme by those who are affected by this implementation when doing financial planning for them. It took me quite a while to navigate my way through all the terms and understand the 4 choices.

However, after all the effort, eventually I realized that many still did not fully comprehend and more importantly did not bother to make an effort to understand.

With this change to only 2 choices and a default option. It is a very much welcome move that should have been done in the first place. I always believe things should be made simple, KISS, as it is often known as.

The default is the standard plan. Higher monthly payout and lower bequest. Probably now, 80% would just leave it and the majority will be here. The alternative is the basic plan. Lower monthly payout and higher bequest. Only the few who insist on making some effort to select this, will switch to this option.

End of the day, it is a good initiative to have such a plan for all Singaporeans and I applaud CPF for it. However, it is compulsory, so like it or not, we fellow Singaporeans have to live with it.

5 comments:

financialray March 10, 2012 at 3:05 PM  

Not too sure why need 2 plans.
As it is, most people are cash poor and asset rich. So give out high cash, low bequest. It is not as if the high cash means one can live luxuriously. The cash is probably just for basic necessities. If anything to bequest, leaving behind a property that is fully paid for and that alone will be worth much more.

WiFree March 11, 2012 at 8:05 PM  

What happens if all my CPF fund is invested elsewhere at age 55. But at age 56 or later I liquidate my investment and money go back to my cpf a/c. Am I still required to join cpf Life?

Lau March 12, 2012 at 6:38 PM  

Hi FR, I guess it is meant to psychologically make people feel that they have a choice. Like would u like black or white. And forgetting to ask why do u even need to choose colors in the first place.

Hi WiFree, that is a good qn to pose CPF on how their schemes are not well explained.

structured settlement cash March 14, 2012 at 4:38 PM  

The Standard Plan provides members with higher monthly payouts while preserving flexibility to use their Retirement Account (RA) monies for housing until 65 years old.

Members also leave a bequest for their beneficiaries under the Standard Plan.

debt management March 19, 2012 at 9:05 PM  

The above statement is seen to be contradictory. The situation is very critical and need an experience complainer to resolve it.

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