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Hello
An interesting sharing to get the best out of annuities including CPF LIFE.
May I ask, under Tokio Marine Retirement GIO, is the monthly payout from age 65 at$676.67 guaranteed?
Thank you.
Hi Jasmin,
The monthly payout from Tokio Marine Retirement GIO consists of $233.34 (guaranteed) and $443.33 (non-guaranteed). That’s the crux with private annuities because quite a big portion of the payouts are non-guaranteed.
If you are only looking at the guaranteed portion of annuities, I believe it is unlikely to find a private annuity plan that is better than CPF Life.
However, the advantage of TM Retirement GIO is that the premiums paid are guaranteed so upon death or surrender of policy, you will get the full amount back.
ReplyThanks Mickey for clarifying.
I like none of the plans including CPF LIFE.
Maybe a few years later, the policy may change again…
As the min sum increase, so is the monthly payout. You should use the CPF calculator to estimate the monthly payout for a min sum of $300K. It is definitely more than $1397.
As far as i know, there isn’t any private annuity plan can match CPF, so don’t waste your time.
I would definitely hope that the monthly payout would increase. However, CPF has not guaranteed this in writing so I won’t put all my eggs in one basket. If decades later, CPF has shown that monthly payout does increase in proportionally with our retirement sums, then there’s obviously changes to my retirement plan then.
At the same time, because I am using existing annuity plans as comparison with existing CPF Life plans, we should also expect private insurers to improve in order to be competitive in the market.
ReplyWhat i mean is you should compare apple to apple.
CPF has a monthly projected payout of $1397 with a min sum of $161K.
Then you are trying to match the same payout of $1397 but using a $300K premium.
ReplyPersonally, I feel this is as apple to apple a comparison it gets when it comes to forecasting a retirement plan that would happen only 20-30 years later.
CPF has not guaranteed that projected payout will increase proportionally with retirement sum. So using a worst case scenario to plan, I can only use a hypothesis that projected payout will not increase throughout the years until I reach the stipulated retirement age. If in future, CPF Life payout does increase, then we can always update our retirement plans accordingly.
ReplyI would agree more with AA than Mickey J. Here’s a possibly better comparison:
* assume I’m 55 and the time is Oct 2015, so all the numbers are “current”.
* I put in $80,500 as CPF Life BRS at 55, so in 10 years from age 65 I will get $767/month.
* To complement that, I buy a TM annuity with $80,500 at 55.
* Question is, after age 65 how much will TM pay out every month? I guess the guaranteed + non-guaranteed total is much lower than Mickey described.
Hi Mickey
I hv done cpf life Standard vs Basic plan comparison sometime ago, dissect both left, right, centre, up, down using simple worksheet… Basic is more better than Standard esp talking about leaving more $ for your family. I shared yr pt of view.
For your TokioMarine model, using $150k (not far from 161k CPF models) to buy its annuity plans, both TK plans monthly payout & its bequest done not better (in fact I consider lousy) than cpf Life Basic. [using current data for meaning comparison]
ReplyHi Ben,
Thanks for sharing your thoughts. While Tokio Marine Retirement GIO does not provide a better payout than CPF Life Basic plan, you can get the full amount of the premiums paid upon death or surrender. I feel that that’s where Tokio Marine Retirement GIO performs better than the CPF Life Basic plan.
I haven’t looked at all the private annuity plans out there in the market, but I think it’s true that at the current stage, there isn’t a private annuity plan out there that can compete with CPF Life plans in terms of monthly payouts.
Like what AA has mentioned earlier about CPF Life having a higher payout as retirement sums increase, I certainly hope that happens in the next few decades so that I can either stay with CPF Life plans, or be able to purchase a much more competitive annuity plan in future.
ReplySome said CPF Basic is better than CPF Standard. Is the reason just being leaving a higher amt of money behind?
ReplyFrom what I’ve read, many were unhappy because CPF Life plans are not transparent in how they handle your CPF monies. Opting for the Standard plan over Basic plan does not yield as much payout when compared to the speed of how the CPF money is exhausted till $0. That’s why many would prefer to opt for the Basic plan.
ReplyI am an IFA. I can tell you that CPF Life has a better return against all insurers’ retirement plans out there now. If your reason for taking a retirement plan is because you want diversification and a assurance of a payout at 65 (or whatever retirement age you set), then that is fine. But if the argument is on the retirement plan having better return, you are wrong or the agent who sold you on that is wrong.
ReplyI would agree if we had more transparency about CPF Life. We still do not know if payouts will increase over the years for citizens retiring a decade later. We also do not know how the goal post will be shifted in the next decade and later. I’ve taken the assumption that CPF Life payouts does not increase (which is the worst case scenario), then there are some private annuities will fare better than CPF Life decades later. We can agree to disagree on this.
Replyhi, can you fwd me your TM agent contact?
i am interested in the TM GIO and life .
your ‘contact me” link is not working
Sorry, the TM agent who was servicing my enquiries is no long with the company.
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