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##[25]cpfLife adv over private annuity

Posted on by tiger40490

See also

— advantage: fineprints are well-documented
CPF Life product feature is probably more stable, and better understood. Fewer hidden surprises.

Same (no such thing in private annuities) policy for everyone. Easy to find answers online.

As a auth UI, Singapass shares this advantage.

CPF Life is designed for the less educated. The CPF board is not out to take advantage of its own citizens.

policy fineprints stay the same for decades. (Some private annuities evolve with market, or go out of market.) As a result, I invested dozens of hours to document CPF fineprints in 30+ bposts.

— advantage: hotline + service centers .. CPF customer service is excellent — onsite, prompt help, similar to a local police or WalMart. The information provides is simpler to understand.

As a auth UI, Singapass shares this advantage.

— advantage: expRatio
CPF is not run for profit. If the commercial insurer charges 3% fee a year or has average 5% surplus return from investment, or pays the salesman a commission,  then with CPF Life, these sums would go back into the pool, enhancing the payouts.

Compare a bookstore run by a church vs a commercial bookstore.

— advantage: non-profit .. The insurer is CPF board which I trust more.

If the economy takes a down turn for CPF members, and the CPF Life becomes insufficient as a retirement plan, then I trust CPF would consider adjustments (bending over backward) to help the members. Retirement is the #1 objective of CPF board of a nanny state. In contrast, Allianz is a commercial operator and not a nanny state.

— advantage: (standard plan) stable payout .. monthly payout amount stays constant in the Standard plan, provided cpf int rate and mortality rate stay constant.  I heard this promise in a Feb 2025 hotline conversation, and I trust this “promise”.

In constrast my private annuities have weaker “promises” on payout rate.

The rest are questionable “advantages”, but often cited as advantages

— higher payout_rate .. becuase

  • descending death benefit .. “selling blood to prop up payout_rate”. CpfLife is a “descending annuity”.
  • .. I prefer the words “descending/descent” for its neutral connotation
  • 10Y accumulation at 4 ppa. Many private annuities have 10Y or 20Y but I bought three annuties with 3Y accumu phase.
  • low expRatio

— liquidity (double-edged) .. private annuities have surrender value, an exposure to scams and adult children’s (unwanted) plea for help

As discusssed in lock up100k]cpf, if you don’t need some 100k idle cash for the rest of your life, then why not lock it away in cpfRA permanently to prevent those issues?

qualitative 360°scorecard@ %%PFF

Posted on by tiger40490

how many percent of Singaporeans have an exp recon system with “1-decimal-precision” i.e. 0.1k i.e. $100

This is a precise question. I would guess below 5%.

k_kidnap

See also

This is a scorecard for my family financial health. A real scorecard always references some benchmark. The benchmark is usually drawn from the local [1] population. A broad-based benchmark enables us to define social strata like “lower middle-class”. It would be invalid methodology to use a biased sample excluding the rich or the huge base of the pyramid.

My informal scorecard below is unscientific and biased, as it relies on a small sample of peers + casual observations of the local community. I don’t even know my peers’ actual incomes or expenses. Based on my subjective and vague benchmark, I think my family is/has ..

  1. A [h] good long-term sustainable burn rate; excellent data collection
  2. .. B [j] excellent long-term Fuller wealth .. based on Singapore recorded burn rate.
  3. .. A [h] excellent current brbr. Note I only remember the past 5Y to 10Y brbr.
  4. C [h] middle income per-capita, benchmarked to population
  5. B [h] good savings rate; good savings habit, resisting some lifestyle creeps .. In the U.S. we would cope with lower savings rate, lower living standard, higher stress ..
  7. — minor scores on the “back of the scorecard”
  8. C [j] decent net asset, still growing thanks to above-mentioned savings rate
  9. B [j] reasonable contingency reserve .. largely based on Medishield
  10. B [j] reasonable retirement plan .. based on Medishield + CPF-life etc
  11. C [h] reasonable investment return .. Let’s ignore the HDB
  12. D [j] * concentration-risk .. insufficiently addressed, considering CPF, 401k, Beijing property
  13. [j] unconventional insurances portfolio, hopefully adequate .. This item is unrated
  14. C [j] reasonable inflation protection .. for the low-inflation Singapore context
  15. AA [h] excellent exp recon and tracking .. basis of my monitoring, planning, forecast and this self-assessment
  16. [j =an accumulation item, 积累]
  17. [h=a current cash flow item, 花销]

Q: which items are neglected so far or deserve more sunshine?
A: maybe those marked with a *… Rather few.

— Defense, weather-proof … is the biggest theme in this scorecard, and presumably my cohort’s scorecard, too.
Singapore government provides more comprehensive protection than U.S. government.

Health is harder to accumulate or protect than wealth is. See reliable Shields@@ (burnRate^wellness) habits #w1r2 and other blogposts about “batteries”.

— [1] I have spent many years in U.S. and Singapore. Cost differences between countries are underestimated, and sometimes invisible until your entire family live in each location for a few years. See

Malaysian同龄人in his40s: realistic PFF

Posted on by tiger40490

I find this 2013 description on [[Personal Money]] rather detailed and realistic, offering multiple revelations and lessons for me. The subject is Mr Lim who wrote in to the columnist Gina Wong , to have his financial health [goals, projections, gaps] assessed in her column [[Money Makeover]].

  • 1) MYR 866k investment assets (29% in REITs, 26% in other stocks, 38% in fixed income funds, 7% cash or MM assets), generating a 8% return — questionable, unsustianable due to high equity allocation
  • 2) MYR 80k emergency fund
  • 3) MYR 500k “personal assets” .. vague.. presumably an estimate of his other assets .. perhaps home equity, 401k
  • 4) minus MYR230k total liabilities .. any debt beyond mortgage would be a worrying sign.
  • ^^^^ MYR 1216k Net asset, adding up the 4 line items
  • MYR 95,295/Y (almost 8k/M) family burn rate, on a MYR 230k income, at age 41. The author (Gina) thinks this burn rate is thrifty and uncomfortable. However, I guess many working class Malaysian families as of 2013 probably spend much less.
  • MYR 60k/Y squirreled away at age 41 = “approximately 25% of his income”, perhaps including  endowment bx.
  • ^^^^ 230k-95k-60k = 75k/Y earned but not spent not saved, so I guess it consists of payroll deductions [tax, 401k, donations, medbx, discounted company stocks,,] This large discrepancy is easily missed by most readers, who would get walk away with a misleading estimate of his brbr or savings rate
  • MYR 120k/Y target NNIA from age 55 through retirement. 60k/Y CRBR + 60k/Y to be reinvested to fight inflation
  • .. I find this NNIA ambitious/challenging if he wants to rely on stocks. Reits and bond funds are slightly less unreliable.
  • —- Lim’s other financial goals are a LG2 focus of this blogpost:
  • MYR 3300k age 55 target balance. Rather ambitious.
  • MYR 1200k  target college fund to help his 2 kids
  • No mention of his inherited wealth or his wife’s contribution.

Q: which portions of his snapshots are oversized/undersized?
* rEstate (conspicuously missing) : undersized
* 401k (conspicuously missing) : undersized
* debt: oversized.. should be close to zero at 41
* nest egg: oversized
* target NNIA by 55: ambitiously oversized

Q: is he on cash flow high ground or low ground? The author says high, notwithstanding insufficient insurance
Q: Brbr? 230k/96k = 2.4 very good
Q: is he a big saver, big spender?
A: author is 100% sure Lim is a “frugal family man” who , 5 years ago, started living “below his means”.
A: At the end of the review, author recommended Lim “upgrade family lifestyle” … relevant to me
%%A: not a big spender, but neither a big saver. I assume Malaysia cost is lower than Singapore, so MYR 8k/M family burn rate is too high

Q: how is his Earn/Save/Invest capabilities? Remember Lim is serious about retiring at 55.
%%A: aggressive investor

Q: Fuller wealth?
%%A: can be better. Lim’s current burn rate (8k/M) and Crbr (5k/M) are rather high

 

##[19] G11 progress]PFF plann

Posted on by tiger40490
  • MOETF with firewall, 3Y BnF, 3min due diligence
  • exp recon process improvement

No oth please.. I feel proud of my independent thinking and progress. I feel these items are remarkable and visible signs of progress. New and better ideas for the next 1~30Y.

I guess many of my U.S. and Singapore peers don’t have such a /progressive/, continuously refined financial plan.

Even though some of them (YW.Chen, Shuo, Ash.S,…) have multiple properties; some (Venkat?) more successful with U.S. equities, I feel most of them follow the bandwagon with fewer bold departures.

  1. [aU] bold decision to stay rented on lease spread, without U.S. home ownership — lower cash flow burden than buying 700k. 700k is like Ivy League plan among the Chinese immigrants.
  2. [AU] bold decision on college fund — discussed with grandpa, Kyle etc , and more convinced than ever to avoid the rat race to branded colleges … insider.
  3. [AU] bold decision to accept average school districts and focus on conducive learning environment instead of test scores
  4. [u] surprise discovery of current income /vis-a-vis/ windfall far out
    1. analyzed three ffree scenarios, based on my detailed burn rate record
  5. deeper conviction and belief in U.S. equities, /vis-a-vis/ other regions
  6. surprise discovery of SG elderly healthcare as more efficient and accessible than feared. No driving required as in U.S.
  7. [a] incisive researched on U.S. burn rate and figured out it’s much higher than SG due to Melvin3
  8. [u] more firm than ever before on my bold decision to work till my last day
  9. bold decision to include 43R model in my default plan, rather than the conventional 2FH model
  10. [AU] singled out Bayonne and South Edison as my bold yet viable choices

Above are progresses made since mid 2018. Below are Earlier progresses, roughly ranked by importance :

  1. bold investment in a 3rd shop unit, despite the concentration risk and lower NRY guarantee than before.
  2. bold decision to choose lower CPF-LIFE payout, since I don’t need the higher monthly payout or bequest.  This decision has implication on my savings rate now.
  3. [u] tried out dividend stock investing on Robinhood
  4. [au] bold idea of sending kids to Singapore universities, avoiding the mad rat race
  5. bold idea on MYS retirement — need more evidence and research
  6. [u] bold decision to stay as contractor
  7. [u] tracked family burn rate for years
  8. [a] passive income added up
  9. [u] bold and unconventional decision to favor walkable locations, to reduce car dependency
  10. new plan on HDB jumbo unit
  11. [a/A=high leverage i.e. high impact at low effort, low distraction, low laser dispersion]
  12. [u/U=unconventional among my Chinese peers. Back bone required]

ffree for half of your (working) life@@

Posted on by tiger40490

See also at what age I started feeling closer 2 cashflow freedom@@

Q: how many percent of my full-time or part-time working life will be ffree?
A: hopefully 70%, from age 43 to 75 (32 years) + 3 years during my bachelor years. So 35Y out of 50Y

Until recently, My answer was “below 10%”. It was hard to imagine financial freedom i.e. “不想做工就不做“ as Liangzhong put it.

Q: how many percent for my peers?
A: below 10%, perhaps the final years before retirement. I think many don’t even look forward to retirement, even if it is ffree. In contrast, I enjoy my ffree because I don’t need to spend so much. I enjoy high BR buffer ratio and being in-control.

— Q: why do most of my peers spend bulk of their working life toiling under livelihood pressure, and reach (some form of) ffree so late?

  • most of them have one (or more) big max-tenor mortgage
  • most of them (Chinese) also pay for their kids’ college
  • many of them also struggle to save up for a Crbr (couple retirement burn rate) higher than my SGD 3k Crbr
  • looking at Earn^Save^Invest: excel at 2 out of 3, I feel many struggle with Save.

[25]cpf: stop online theft

Posted on by tiger40490

Overall, cpf is a safer system than banks, because “immediate/frequent withdrawal unneeded”.

A 2025 cpf roadshow staff told me that so far the only scams occured via online withdrawal (after member reached 55). In-person theft is unheard of.

If you are between 55 and 65 and you don’t need some 100k for the rest of your life, why not lock it away in cpfRA forever? No one can withdraw. See lock up100k]cpf if no liquidity need

— protection: withdrawal lock .. If you are a CPF member aged 55+ and have no immediate plans to withdraw your CPF savings, you are encouraged to safeguard your CPF savings by activating the CPF Withdrawal Lock (MoneyLock) to disable online CPF withdrawals. You can do so via the CPF account settings after logging on to the CPF website using your Singpass.

When you need to withdraw your CPF, you can enable online withdrawals again via the CPF account settings. For your security, this will be subject to Singpass Face Verification and a 12-hour cooling period. Members who do not wish to enable online withdrawals again can withdraw in-person at CPF Service Centres.

— protection: daily withdrawal limit .. CPF Board has also introduced a default Daily Withdrawal Limit of $2,000 for all members aged 55 or older, as part of a suite of anti-scam measures.

Members can adjust this limit via the CPF account settings. All limit increases are subject to Singpass Face Verification and a 12-hour cooling period.

[18]Y I feel ffree !!US cohort despite higher pay #Deepak

Posted on by tiger40490

See also big discretionary spends

Background, by definition, my “peers” all have kids, and working in (financial) IT, often with 2 incomes.

Q: why am I feeling financially free but not the U.S. peers despite their higher income
A: My advantages are 1) burn rate 2) nonwork income
A: For their USD 90k burn rate supported by employee health benefit, at 4% reliable return, they need 2.25M invested.
A: For my SGD 36k burn rate supported by medishield, at 6% rental yield, I only need SGD 600k invested

  • passive income — i.e. the incoming side —
    • my projected real-estate passive incomes add up to S$4k+. Do some of my peers have a similar income? Not sure
    • I think too few of my peers have seriously focused on reliable, consistent passive income
  • burn rate — i.e the outgoing side  —
    1. My burn rate is 20-30% lower than my peers in the same location. For example, during the initial stabilization period after my family comes, my burn rate is possibly 7k, including rent + med bx + car
    2. my actual SGP burn rate of S$4-6k is less than their USD9k, largely due to location difference and childcare. Rural China, Malaysia, India .. would be even lower. I think Rural America is somewhat lower but not sure how much. I can ask some U.S. colleagues
    3. In terms of “minimum” burn rate, I think their average in the U.S. is 2 to 4 times higher than mine in Singapore, largely due to medical, transport and rental cost.
    4. SG citizenship — offers cost advantages in terms of medical, college ..
    5. In the job loss scenario, my confidence about reducing burn rate is not echoed by U.S. peers. Can some of them cut from USD9k to USD5k? I assume yes but none of them shows confidence.
    6. I don’t aim to buy a 700k home or send my kids to private colleges. Free of these burdens.
    7. My minimalist lifestyle is rare among my peers. This lifestyle is not theoretical, but visible in action
    8. my confidence about my household burn rate is rare among my peers

— After the analysis, now a more casual look at peer’s burn rate:

I discussed with grandpa about a huge difference between me and my colleagues’ burn rates.
This difference is rooted in their long-term optimism about their earning growth and stock market returns.

(In contrast, my self-confidence about my salary sustainability is based on IV.)

One thing easy and really useful to do with money matters is break-down analysis.
I can see my younger (and some in 40’s) colleagues spending more than I do on food, rent, mortgage, car, vacations, entertainment, gadgets, kids’ enrichment ..
These are often big-ticket items or creature-comfort spending, and clearly luxury IMO

Many believe food is never a big ticket item, but I think they spend $40/D i.e. $15k/Y vs my 4k/Y.

Q: sometimes I feel I can’t (allow myself to) cut further down below my peers because my family could then feel deprived, but can I?
A: I think I some capacity to ignore the peer pressure and maintain my superior brbr.

— In Sep 2020, I discussed “livelihood pressure” with DeepakCM. I described a fictitious family earning 250k [1] combined. Deepak said after-tax 150k/Y or 12.5k/M.

If they spend 10k/M then Brbr is stressful not comfortable. I feel comfortable brbr is 2.0+ but I guess the typical family is unlikely to save half the income.

Deepak pointed out that immigrants leave their home countries behind, and come to U.S. in search for a better life, so these high-income families would spend to enjoy. Lifestyle creep — a stark contrast to my financial discipline.

Q: If these immigrants are able to “accept/cope with” a simpler life but choose to enjoy a better, more /comfortable/ (actually lavish) life, then why do they complain about livelihood pressure like depicted in 中年男士40-50压力最高@@?
A: It depends on the acceptance — like my carefree acceptance vs reluctant, grudging acceptance. I think exclub and FOMO are fundamental /drivers/ in these high-earning immigrants. They are driven to spend, and driven to endure livelihood pressure. Some are unable to say NoThanks, as I described to my sis.

Q: Are they on cashflow high ground, with their high income?
A: No necessarily.

Q[1]: 250k … what if combined income is 300k? I think by most wealth-management standards that income would put the family in a different league . Indeed, some of my U.S. (I didn’t write “SG”) friends, my ex-classmates, and possibly my sister are in the “wealthy” exclub and not comparable to the rest of us. Their livelihood pressure, their Brbr, their assets are not comparable to mine.