QUESTION : Which is the BEST CPF RETIREMENT SUM for me, huh ?
In essence, the retirement sum (RS) is a reference point that provides an indication of how much you need to save to meet your desired monthly payouts.
There are three levels of retirement sums to note:
1. The Basic Retirement Sum (BRS) provides monthly payouts in retirement to cover basic living needs, excluding rental expenses.
2. The Full Retirement Sum (FRS) is an ideal point of reference of how much one needs in retirement.
3 . The Enhanced Retirement Sum (ERS) provides a higher monthly payout, making it suitable for those who might require more retirement income.
问题：对于我来说，最好的公积金退休金金额是多少？
从本质上讲，退休金 (RS) 是一个参考点，可指示您需要储蓄多少才能满足您所需的每月支出。
需要注意的退休金分为三个级别：
1. 基本退休金 (BRS) 提供退休后每月的支出，以满足基本生活需求，不包括租金费用。
2. 全额退休金 (FRS) 是衡量一个人退休后需要多少钱的理想参考点。
3. 增强退休金 (ERS) 提供更高的每月支出，适合那些可能需要更多退休收入的人。
● Which CPF Retirement Sum should you go for? Should you go for the Basic Retirement Sum, which is supposedly enough to cover your basic living needs?
Or maybe Full Retirement Sum, which can give us a much higher payout is a better choice? Or with living costs on the rise, is it best to go for the Enhanced Retirement Sum, which can cover our desired lifestyle?
That's what we'll be exploring in today's discussion. We'll be going through each of the retirement sums to find out what are the benefits and trade-offs are. Then we'll also look at statistics and studies to find out which is the best retirement sum you should go for.
Alright, let's jump right in.
● 您应该选择多少公积金退休金？ 您是否应该选择基本退休金（据说足以满足您的基本生活需求）？
或者也许可以给我们带来更高支出的全额退休金是更好的选择？ 或者随着生活成本的上升，是否最好选择增强退休金来满足我们想要的生活方式？
这就是我们今天的讨论中将要探讨的内容。 我们将仔细检查每笔退休金，以了解其好处和权衡。 然后我们还将查看统计数据和研究，找出您应该选择的最佳退休金额。
好吧，让我们直接开始吧。
● First up, what exactly is the CPF Retirement Sum?
Basically, the retirement sum is an amount is which the Singapore government has come out with to indicate how much you need to save up for your retirement. (based on real data, of course). And depending on this amount that you've saved up in your CPF, you'll receive different monthly payouts when you turn 65 years old.
So, there are 3 levels of retirement sums that are available to us.
●First, basic retirement sum, or BRS. The concept behind the BRS is based on the expenses of a lower-middle retiree household. It also assumes that the person owns a property that can last him up to 95 years old, and he does not need to pay any rent during retirement.
● Then, if you take BRS and multiply it by 2, you will get the Full Retirement Sum, or FRS. This higher monthly payout can be used to cover your basic living expenses, while also covering any of your rental expenses.
● Finally, the Enhanced Retirement Sum or ERS is set at 4 times the BRS amount, making this suitable for those who want a higher monthly income during retirement.
● 首先，公积金退休金到底是多少？
基本上，退休金是新加坡政府提出的金额，表明您需要为退休储蓄多少。 （当然，基于真实数据）。 根据您在公积金中存入的金额，您在 65 岁时每月将收到不同的付款。
因此，我们可以选择 3 个级别的退休金。
●第一，基本退休金（BRS）。 BRS 背后的概念是基于中下退休人员家庭的支出。 它还假设该人拥有可以维持他95岁的房产，并且在退休期间不需要支付任何租金。
● 然后，如果您将BRS 乘以2，您将得到全额退休金（FRS）。 这笔较高的每月付款可用于支付您的基本生活费用，同时还可以支付您的任何租金费用。
● 最后，增强退休金（ERS）设定为BRS金额的4倍，适合那些希望在退休期间获得更高月收入的人。
So, with these retirement sums, how much money can we expect to receive when we retire? Check this out.
Depending on which year you turn 55 years old, the retirement sum and the monthly payouts will be different. So, for example, if you turn 55 years old in 2024, and you manage to save up to the FRS amount, or $205,800, you will receive $1,670 per month when you turn 65 years old.
Or if you manage to save the ERS amount of $308,700, the payout will also increase accordingly. ($2450 monthly when you turn 65 years old.)
Now, what's interesting is that if we take the payout and divide it by the amount saved at 55 years old, it would be as though we are getting a 9% guaranteed yield on the initial amount, for as long as we live.
Obviously, this is just a very simple calculation that does not take into account any compounding, nor any bequest payout when we pass away.
If you want to take that into account, Kyith from Investment Moats has actually done an analysis on this, where he found that based on when you pass away, the internal rate of return would be lower.
●Next, if you defer your payouts from 65 to 70 years old, due to the magic of compounding, the payout will also increase by up to 7% for each year you defer.
So does this mean that we should just go for the Enhanced Retirement Sum (ERS) to receive the highest amount of payout then? To answer this, let's look at some stats first.
● How much money do we need for retirement?
According to the Minimum Income Standard 2023 study, if you are single and 65 years and older, you would need $1,492 for a basic standard of living.
This includes food expenses of about $400 per month, housing-related expenses take up another $330, and the rest includes transportation, healthcare, recreation, and other miscellaneous expenses.
那么，有了这些退休金，我们退休时预计能收到多少钱呢？ 看一下这个。
根据您年满 55 岁的年份，退休金和每月支出将会有所不同。 因此，举例来说，如果您在 2024 年年满 55 岁，并且您设法储蓄达到 FRS 金额，即 205,800 美元，那么当您年满 65 岁时，您每月将收到 1,670 美元。
或者，如果您成功存入 ERS 金额 308,700 美元，支出也会相应增加。 （当您年满 65 岁时，每月 2450 美元。）
现在，有趣的是，如果我们将支出除以 55 岁时储蓄的金额，就好像只要我们活着，我们就能在初始金额的基础上获得 9% 的保证收益率。
显然，这只是一个非常简单的计算，没有考虑任何复利，也没有考虑我们去世时的任何遗赠支出。
如果你想考虑到这一点，投资护城河的Kyith实际上对此做了分析，他发现根据你去世的时间，内部收益率会更低。
●接下来，如果您将付款从65岁推迟到70岁，由于复利的魔力，您每推迟一年，付款也将增加最多7%。
那么这是否意味着我们应该选择增强退休金（ERS）来获得最高金额的支付呢？ 为了回答这个问题，我们首先看一些统计数据。
● 我们需要多少钱来养老？
根据 2023 年最低收入标准研究，如果您是 65 岁及以上的单身人士，则需要 1,492 美元才能维持基本生活水平。
其中包括每月约400美元的食品费用，与住房相关的费用另占330美元，其余包括交通、医疗、娱乐和其他杂项费用。
●The second study we can look at is the Household Expenditure Survey 2017/18. The study found that for non-working persons aged 65 years and above, the monthly expenditure is $1,154 in 2017/18.
So if we apply a 3% annual inflation rate, the current amount would come out to around $1,400, which is quite close to the amount that we got from the MIS 2023 study.
●The third source is from DollarsAndSense. It's not so much a study, but instead real-life examples from 2 retirees.
●One retiree shared that her basic expenses are 50% lesser as compared to her working years, as she no longer incurs expenses as a caregiver to her parents, and she doesn't need a car or a helper anymore.
●Another retiree found that while his expenses had reduced, he did not have to change his lifestyle at all. That's because his son had finished his studies and larger expenses such as home mortgage were cleared.
The examples from these 2 retirees coincides with a 2021 report by Singapore Department of Statistics, where it found that retired households do indeed spend less as compared to general households.
After going through these reports, we can see that when someone retires his or her expenses would reduce to around $1.5k a month. Which means the $1,670 monthly payout from the Full Retirement Sum is good enough, right?
It depends.
●According to OCBC Financial Wellness Index 2023, all of the Singaporeans surveyed are looking for a retirement lifestyle that's above $2,665. In that case, FRS is definitely not enough. Instead, you would need ERS to get that kind of payout.
●Caveats with CPF LIFE
However, there are a few fine prints to take note of.
●First, the biggest downside of CPF LIFE is that it's not inflation proof.
That's because both the basic and standard plans have a fixed payout, with the Basic Plan payout even dropping further when the CPF balance falls below $60k.
●Then, while the escalating plan payout increases by 2% each year, it is still barely on par with Singapore's average inflation rate. And, spoiler alert - unless you manage to live past 78 years old, the escalating plan's payout is actually lower than the Basic and Standard plans in the earlier years.
●The average core inflation rate in Singapore over the last 30 years is 1.59%, which means, on average, your CPF payout is losing its purchasing power by this amount.
●我们可以关注的第二项研究是2017/18年家庭支出调查。 研究发现，65岁及以上的非工作人士，2017/18年度每月支出为1,154澳元。
因此，如果我们采用 3% 的年通胀率，当前金额将约为 1,400 美元，这与我们从 MIS 2023 研究中得出的金额非常接近。
●第三个来源来自DollarsAndSense。 这与其说是一项研究，不如说是来自两名退休人员的现实生活中的例子。
●一位退休人员表示，与工作时相比，她的基本开支减少了50%，因为她不再需要照顾父母的费用，也不再需要汽车或帮手。
●另一位退休人员发现，虽然他的开支减少了，但他根本不需要改变自己的生活方式。 这是因为他的儿子已经完成了学业，并且还清了住房抵押贷款等较大开支。
这两名退休人员的例子与新加坡统计局 2021 年的一份报告不谋而合，该报告发现，与普通家庭相比，退休家庭的支出确实较少。
查看这些报告后，我们可以看到，当某人退休时，他或她的开支将减少到每月 1,500 美元左右。 这意味着全额退休金每月支付 1,670 美元已经足够了，对吧？
这取决于。
●根据华侨银行2023年金融健康指数，所有接受调查的新加坡人都在寻找高于2,665美元的退休生活方式。 那样的话，FRS肯定是不够的。 相反，您需要 ERS 才能获得此类付款。
●CPF LIFE 的注意事项
然而，有一些精美的印刷品需要注意。
●首先，CPF LIFE 最大的缺点是它不能抵御通货膨胀。
这是因为基本计划和标准计划都有固定的支出，当公积金余额低于 6 万美元时，基本计划的支出甚至会进一步下降。
●然后，尽管升级计划的支出每年增加2%，但仍勉强与新加坡的平均通胀率持平。 而且，剧透警告 - 除非您能活过 78 岁，否则升级计划的赔付实际上低于早年的基本和标准计划。
●新加坡过去30年的平均核心通胀率为1.59%，这意味着平均而言，您的公积金支出正在失去这个金额的购买力。
However, that's just the average inflation. In 2022, consumer prices shot up by 6.1%, the fastest rate of increase since 2008. While the inflation rate has come back down a little, and it is expected to go back up in early 2024, why? GST lor.
然而，这只是平均通胀。 2022年，居民消费价格上涨6.1%，创2008年以来最快涨幅。虽然通胀率有所回落，预计2024年初又会回升，这是为什么呢？ 消费税劳。
This just means that your CPF payout has just lost even more value during this period.
●Second, CPF LIFE payouts can actually decrease no matter which plan you are on. What?! That's because the payouts don't just come from your CPF Retirement Account (RA). Instead, they also come from the annuity pool, where interest earned on the annuity premium is shared among all eligible members to form part of the monthly payouts.
This means the payout can change based on mortality rates and interest rates.
这仅仅意味着您的公积金支出在此期间损失了更多价值。
●其次，无论您选择哪种计划，CPF LIFE 支出实际上都会减少。 什么？！ 这是因为支出不仅仅来自您的公积金退休账户 (RA)。 相反，它们也来自年金池，年金保费赚取的利息由所有符合资格的会员分享，构成每月支出的一部分。
这意味着支出可能会根据死亡率和利率而变化。
And with life expectancy increasing, there's a chance that the monthly payouts could go lower in the future.
Same for the interest rate, where both the Retirement Account interest and the interest floor will also be reviewed periodically.
随着预期寿命的延长，未来每月的支出可能会降低。
利率也是如此，退休账户利息和利息下限也将定期审查。
●In the worst-case scenario, the Retirement Account floor can be reduced, especially when the economy is not doing well. For example, during the COVID pandemic, the computed rate for RetirementAccount dropped to as low as 2.22%.
●在最坏的情况下，退休账户下限可以减少，特别是在经济表现不佳的情况下。 例如，在新冠疫情期间，RetirementAccount 的计算利率降至 2.22% 。
●Third, one of the retirees from the Dollars AndSense article also brought up a very good point, and that is, in order to keep your expenses low during retirement, you need to have good health. Otherwise, your medical expenses would go up.
●第三，Dollars AndSense文章中的一位退休人员也提出了一个很好的观点，那就是为了在退休期间保持较低的开支，你需要有良好的健康状况。 不然你的医疗费用就会增加。
●While the payout from Full Retirement Summay be enough for a basic standard of living, it is definitely not enough to cover the healthcare costs if you have certain illnesses, such as cancer and kidney failure, etc.
According to the Singapore Cancer Registrv Annual Report 2021, more and more people are getting diagnosed with cancer. Plus, the older you get, the higher chance you might be diagnosed with cancer. (Touch wood ah)
If you have term insurance plans, your coverage may end after a specified term, for example, 65 years old, after that, you will no longer have any coverage.
But what about MediShield Life? Isn't it enough to cover the medical expenses? Yes, but there's a limit to how much you can claim per month.
●虽然全额退休金的支出可能足以满足基本生活水平，但如果您患有某些疾病，例如癌症和肾衰竭等，则绝对不足以支付医疗费用。
根据新加坡癌症登记处 2021 年年度报告，越来越多的人被诊断出患有癌症。 另外，年龄越大，被诊断出患有癌症的机会就越大。 （摸木头啊）
如果您有定期保险计划，您的承保可能会在指定期限后结束，例如 65 岁，之后您将不再拥有任何承保。
但是终身健保呢？ 还不够支付医药费吗？ 可以，但每月可以申请的金额是有限制的。
●For example, if you are on a prostate cancer treatment, the out-of-pocket payment amount for the drug can reach $3,360 per month.
●例如，如果您正在接受前列腺癌治疗，则该药物的自付费用可达每月 3,360 美元。
●All these points to one thing,( bo bian lo), no choice, you can't just rely on your CPF payouts alone.
You will also have to invest your money in the stock market to hedge against inflation, while also preparing for any unforeseen circumstances, such as health issues.
●所有这些都表明一件事，（bo bian lo），别无选择，你不能仅仅依靠你的公积金支付。
您还必须将资金投资于股票市场以对冲通货膨胀，同时还要为任何不可预见的情况（例如健康问题）做好准备。
●So, what can you expect from the stock market? In the US, the S&P500 have delivered an average inflation-adjusted return of 6.37% over the long term.
While in Singapore, dividend stocks such as DBS or REITs can give a dividend yield of anywhere between 3% and even 6%. And , the best part is that these dividend payouts will increase over time, meaning the yield for your initial investment will go up.
This, by the way, is also called the "kueh lapis" investment strategy from 1M65. Where at the base,
you have CPF LIFE giving you a steady payout and a safety net in case things go wrong. Then further up, you can add on investment to potentially give you higher returns.
●Which retirement sum should you go for?
So with that in mind, which retirement sum should you go for?
●那么，您对股市有何期待？ 在美国，标普 500 指数经通胀调整后的长期平均回报率为 6.37%。
而在新加坡，星展银行或房地产投资信托基金等股息股票的股息收益率可以达到 3% 甚至 6% 之间。 而且，最好的部分是，这些股息支付将随着时间的推移而增加，这意味着您的初始投资的收益率将会上升。
顺便说一下，这也被称为 1M65 的“kueh lapis”投资策略。 在基地的什么地方，
您的公积金终身 (CPF LIFE) 可为您提供稳定的支付，并在出现问题时提供安全网。 然后，您可以进一步增加投资，以获得更高的回报。
●您应该选择多少退休金？
考虑到这一点，您应该选择多少退休金？
●Personally, I would go for the FRS, as the higher payout from FRS alone is sufficient for a basic standard of living in the first few years. And it's also pretty achievable as long as you consistently top up $8,000 to your CPF SA or MA every year.
●就我个人而言，我会选择FRS，因为仅FRS的较高支出就足以满足最初几年的基本生活水平。 只要您每年持续向您的 CPF SA 或 MA 充值 8,000 美元，这也是可以实现的。
Though, FRS alone wouldn't be enough as you would still need to cater for inflation, and any unforeseen circumstances, such as serious illnesses. In that case, you would also need to add on a layer of investment.
不过，仅凭 FRS 还不够，因为您仍然需要应对通货膨胀以及任何不可预见的情况，例如严重的疾病。 在这种情况下，您还需要增加一层投资。
●For example, if we expect our monthly expenses to be $2,665 like in the OCBC study, using the 4% rule, we would need to add on at least a $298,500 portfolio for the additional returns.
Plus what's nice is that investment will also give you the potential of early retirement and while also giving you additional liquidity during emergencies.
But what about the Basic Retirement Sum? I feel that it's ok to go for it if you expect your monthly expenses to be low during retirement.
●例如，如果我们预计每月支出为华侨银行研究中的 $2,665，使用4%规则，我们需要添加至少 $298,500的投资组合以获得额外回报。
另外，好的一点是，投资还可以为您提供提前退休的潜力，同时在紧急情况下为您提供额外的流动性。
但是基本退休金呢？ 我觉得如果你预计退休期间每月的开支会很低，那么就可以选择。
So, your house needs to be paid off, your kids have already "spread their wings" and leave the nest, and you are perfectly healthy.
But because the payout is so low, you won't have any margin for error in case things go wrong.
That's why you'll need to have a bigger investment portfolio to cater for any additional expenses.
所以，你的房子需要还清，你的孩子已经“展翅高飞”离开巢穴，而你也非常健康。
但由于支付率很低，万一出现问题，你不会有任何犯错的余地。
这就是为什么您需要拥有更大的投资组合来满足任何额外费用。
●How big are we talking about? Let's say if we expect our monthly expense to be at $1,500. The BRS has taken care of the initial $900. So, using the 4% rule, we would need to have a minimum of
$180,000 portfolio, which is quite achievable.
我们谈论的是多大？ 假设我们预计每月开支为 1,500 美元。 BRS 已经支付了最初的 900 美元。 因此，使用 4% 规则，我们需要至少 180,000 美元的投资组合，这是完全可以实现的。
●Or if we want a better retirement lifestyle of maybe $2,665 per month, our portfolio would then have to be at least $529,500.
●Finally, what about the ERS? ERS is good if you prefer an even higher guaranteed income stream from CPF Life. However, you will be locking up an additional $102,900 into your CPF.
●If you had just invested that money over 10years with an 8% annual return, the money would grow to $222,153. And that money is totally liquid instead of being locked up in CPF.
●或者，如果我们想要更好的退休生活方式，也许每月 2,665 美元，那么我们的投资组合就必须至少为 529,500 美元。
●最后，ERS怎么样？ 如果您希望从 CPF Life 获得更高的保证收入来源，ERS 是不错的选择。 然而，您将在您的公积金中额外锁定 102,900 美元。
●如果您刚刚将这笔钱投资了 10 年，年回报率为 8%，那么这笔钱将增至 222,153 美元。 而且这笔钱是完全流动的，而不是被锁定在公积金中。
●So, here's a tip for you, keep your options open and don't rush to aim for the ERS. At 55 years old, once you have met your Full Retirement Sum, you can withdraw any amount that's leftover in your OA.
●因此，这里有一个建议给您，保持您的选择余地，不要急于瞄准 ERS。 55 岁时，一旦您达到全额退休金，您就可以提取 OA 中剩余的任何金额。
●This means, your OA now turns into a high yield savings account. In that case, you can keep the OA money in your CPF to continue earning interest, or you can choose to withdraw the money if you have a better use for the money.
●这意味着，您的OA现在变成了一个高收益储蓄账户。 在这种情况下，您可以将 OA 资金保留在您的 CPF 中以继续赚取利息，或者如果您有更好的用途，也可以选择提取这笔资金。
Conclusion:
Anyway, that was a quick analysis of which retirement sum you need for your retirement. Hopefully, you found it useful.
结论：
无论如何，这是对您退休所需的退休金的快速分析。 希望您发现它很有用。
Q & A.
Q1:
How does the closure of my Special Account affect my retirement payouts?
If you are receiving monthly payouts, your payouts will increase if some or all of your Special Account (SA) savings are transferred to your Retirement Account (RA) when your SA is closed. You will be notified to check your monthly payouts after the transfer and closure of your SA in early 2025.
You can also transfer your Ordinary Account savings to your RA, up to the prevailing Enhanced Retirement Sum, to increase your monthly payouts.
Q2:
I am aged 55 and above. What will happen when my Special Account is closed and what is the rationale for doing so?
Today, members aged 55 and above have two CPF accounts that hold savings intended for retirement payouts: the Special Account (SA) and the Retirement Account (RA). Both SA and RA savings earn the same long-term interest rate. However, some SA savings can be withdrawn on demand from age 55. As a principle, only savings that cannot be withdrawn on demand should earn the long-term interest rate, and savings that can be withdrawn on demand should earn the short-term interest rate.
To better align CPF interest rates to the nature of CPF savings in each CPF account, we will close your SA if you are aged 55 and above from early 2025. SA savings will be transferred to your RA, up to your Full Retirement Sum (FRS). These savings will continue to earn the long-term interest rate. If you have met your FRS, whether fully in cash or with a mixture of property and cash, any remaining SA savings will be transferred to your Ordinary Account (OA), where they remain withdrawable and will earn the short-term interest rate.
You can choose to transfer your OA savings to the RA at any time, up to the prevailing Enhanced Retirement Sum (ERS) to earn long-term interest rates and receive higher retirement payouts. Once transferred, the RA savings can only be streamed out to you in retirement payouts. With the raised ERS from 1 January 2025, more than 99% of the members aged 55 and above today would be able to transfer all their SA savings, that were channelled to the OA due to the closure of SA, to the RA.
You will be notified after the transfer of all SA savings to your RA and/or OA, and closure of your SA in early 2025. You will also be able to check the amounts transferred from your SA to your RA and/or OA from your CPF statement. No action is required from you now.
Q3:
Do I have to join CPF LIFE?
You will be automatically included if you are a Singapore Citizen or Permanent Resident born on 1 January 1958 and after*, and have at least $60,000 in your CPF retirement savings when you start your monthly payouts.
*If you are born between 1 January 1958 and 30 April 1961, and had at least $40,000 in your Retirement Account when you reached 55, you would have to join CPF LIFE.
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