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financial future > Retirement Planning & Strategies > Flashcards

Retirement Planning & Strategies Flashcards

1
Q

What is the Basic Retirement Sum in 2023?

A

$99,400

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2
Q

What is the Full Retirement Sum?

A

$198,000

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3
Q

What is the Enhanced Retirement Sum?

A

$298,200

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4
Q

When does the CPF Life monthly payouts start?

A

65 years old

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5
Q

Why will savings deplete in the future?

A

Inflation

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6
Q

What is the retirement age from 1 Jul 2022?

A

63

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7
Q

What is the retirement age by 2030?

A

70

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8
Q

What is the re-employment age from 1 July 2022?

A

68

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9
Q

What is the re-employment age by 2030?

A

70

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10
Q

When does your CPF contribution rate decrease?

A

After age 55

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11
Q

What is the employee and employer contribution rate (0-55)?

A
  1. 17%
  2. 20%
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12
Q

What is the employee and employer contribution rate (55-60)?

A
  1. 14.5%
  2. 15%
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13
Q

What is the employee and employer contribution rate (60-65)?

A
  1. 11%
  2. 9.5%
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14
Q

What is the employee and employer contribution rate (65-70)?

A
  1. 8.5%
  2. 7%
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15
Q

What is the employee and employer contribution rate (70 onwards)?

A
  1. 7.5%
  2. 5%
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16
Q

How does allocation rates change as you age?

A

More money allocated to Medisave Account

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17
Q

What is the employer and employee contribution rate (60 and below) in 2030?

A
  1. 17%
  2. 20%
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18
Q

What is the employer and employee contribution rate (60-65) in 2030?

A
  1. 13%
  2. 13%
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19
Q

What is the employer and employee contribution rate (65-70) in 2030?

A
  1. 9%
  2. 7.5%
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20
Q

What is the employer and employee contribution rate (70 onwards) in 2030?

A
  1. 7%
  2. 5.5%
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21
Q

How many Singaporeans (65 and above) will there be by 2030?

A

900k

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22
Q

According to survey, what is the average age parents start to plan for retirement?

A

36 years old

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23
Q

According to survey, what is the expected retirement age?

A

63 years old

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24
Q

According to the survey, how many percentage expect to outlive their savings?

A

67%

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25
Q

According to survey, how many percentage is confident of maintaing lifestyle?

A

6%

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26
Q

According to survey, how many percentage are parents concerned about insufficient savings and healthcare affordability?

A

66%

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27
Q

According to survey, how many percentage are parents prioritize kids’ education and development needs

A

86%

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28
Q

How many percentage of youths DO NOT believe that their parents are ready for retirement?

A

85%

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29
Q

What are the 7 risks you face as a retiree?

A
  1. Overspending
  2. Longevity
  3. Investing
  4. Inflation
  5. Healthcare
  6. Inability to work
  7. Insufficient Income
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30
Q

What is the average expenditure of Eldershield claimants?

  • A month
A

more than $2000 a MONTH

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31
Q

When was CPF established?

A

1955

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32
Q

What 3 basic needs does CPF fulfil?

A
  1. Fully paid home
  2. Healthcare expenses
  3. Lifelong stream of retirement income
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33
Q

What interest rate does members receive for their OA, SA, RA receive?

A

Look at slides & examples to practice

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34
Q

What is the interest rate of OA?

A

2.5%

OR

The 3-month average of 3 local banks’ interest rates, whichever is higher.

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35
Q

What is the interest rate for SA, MA, and RA respectively?

A

4%

OR

Average yield of 10-year Singapore Government
Securities (10YSGS) plus 1%, whichever is higher.

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36
Q

What is the full retirement sum for members turning 55 in 2023?

A

$198,800

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37
Q

What is the minimum amount needed to be set aside at age 55 if you have a house?

A

Basic Retirement Sum

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38
Q

What is the minimum amount needed to be set aside at age 55 if you don’t have a house?

A

Full Retirement Sum

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39
Q

How many percentage does the retirement sums increase every year?

A

3.5% per annum

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40
Q

When does the payouts for Retirement Sum Scheme start?

A

65 years old

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41
Q

How long can you receive payouts from the Retirement Sum Scheme?

A

Every month for 20 years with 4% interest rate.

42
Q

What is Extra Interest and Additional Extra Interest for RSS?

A

To extend duration of payouts to age 85 and 90 respectively.

43
Q

Who is RSS applicable for?

A

Those born before 1 Jan 1958.

44
Q

Are those born before 1 Jan 1958 eligible for CPF LIFE?

A

Yes they can opt in anytime between Payout Eligibility Age: 65 and 1 month before they turn 80.

They have to also be a Singaporean Citizen or PR.

45
Q

If you are born between 1 Jan 1958 to 30 April 1961, you are auto enrolled into CPF LIFE if:

A
  1. SC or PR
  2. At least 40k in RA at age 55
  3. At least 60k in RA at least 6 months before PEA
46
Q

If you are born after 30 April 1961, you are auto enrolled into CPF LIFE if:

A
  1. SC or PR
  2. At least 60k in RA at least 6 months before PEA
47
Q

How many percent does your CPF Life payouts increase if you defer?

A

7% every year

48
Q

What happens upon death if you are under CPF LIFE Standard Plan?

A

Refer to slides

49
Q

What happens upon death if you are under CPF LIFE Basic Plan?

A

Refer to slides

50
Q

How many years does Escalating Plan take to reach the same payout level as Basic Plan?

A

9-11 years

51
Q

How many years does Escalating Plan take to reach the same payout as Standard Plan?

A

13-14 years

52
Q

How many years does Escalating Plan take to breakeven with Standard Plan?

A

23-25 years

53
Q

How can you balance the payouts from escalating plan and standard plan?

A
  1. Defer payouts
  2. CPF top-ups
54
Q

At age 55, if you have $5k or less in OA and SA combined, how much money can you withdraw?

A

All (nothing goes into the RA)

55
Q

At age 55, if you have $5k-$198.8k in OA and SA combined, how much money can you withdraw?

A
  1. $5k
  2. Any RA savings above BRS (if you have a house)
56
Q

At age 55, if you have $198.8k and more in OA and SA combined, how much money can you withdraw?

A
  1. $5k or OA and SA savings above FRS (whichever is higher)
  2. Any RA savings above BRS (if you have a house)
57
Q

When can you make CPF withdrawals?

A

55 years old and older AFTER setting aside retirement sum

58
Q

Who can you conduct CASH top ups under the Retirement Sum Topping-up Scheme (RSTU)?

A

Anyone

59
Q

Who are the 6 people you can conduct CPF TRANSFERS under the Retirement Sum Topping-up Scheme (RSTU)?

A

Spouse
Siblings
Parents
Parents-In-Laws
Grandparents
Grandparents-in-Laws

(NO KIDS)

60
Q

Which account does the top-up go to for recipients aged below 55?

  • Retirement Sum Topping-up Scheme (RSTU) -
A

Special Account (Up to FRS)

61
Q

Which account does the top-up go to for recipients aged 55 and above?

  • Retirement Sum Topping-up Scheme (RSTU) -
A

Retirement Account (Up to ERS)

62
Q

How much tax relief do you receive through cash top-ups to YOUR account?

  • Retirement Sum Topping-up Scheme (RSTU) -
A

Up to $8k per year

63
Q

How much tax relief do you receive through cash top-ups to your family account?

  • Retirement Sum Topping-up Scheme (RSTU) -
A

Up to $8k per year

64
Q

What is the maximum amount of cash top-ups to get tax relief?

  • Retirement Sum Topping-up Scheme (RSTU) -
A

Up to FRS
Anything above FRS (ERS) will not receive tax relief

65
Q

What is the Personal Income Tax Relief cap?

  • Retirement Sum Topping-up Scheme (RSTU) -
A

$80k

66
Q

Can you do cash top-ups to your kid’s account?

  • Retirement Sum Topping-up Scheme (RSTU) -
A

Yes BUT no tax relief, it is to leverage attractive interest rates and compounding.

67
Q

What is the maximum amount you can top up to your CPF?

  • CPF Voluntary Contribution Scheme -
A

$37,740 per year (includes mandatory contributions)

68
Q

What is the Basic Healthcare Sum in 2023?

A

$68,500

You can only top up to this amount in MA and receive TAX RELIEF.

69
Q

What is the max sales charge for CPFIS?

A

Up to 1.5%

70
Q

What is the max fund management fees for CPFIS?

A

Up to 1.75% per annum

71
Q

How much cash refund can you get from CPF withdrawn for properties?

A

Partial/Full refund up to principal CPF + accrued interest

72
Q

What is the Matched Retirement Savings Scheme?

A

Dollar-for-dollar matching by the Government for CPF members who have low retirement savings.

73
Q

What is the annual cap of CPF RA Top-Ups?

  • Matched Retirement Savings Scheme -
A

$600 (Annual/Per year)

74
Q

When does the Matched Retirement Savings Scheme take place?

A

2021 to 2025 (Over 5 years)

75
Q

How many Singaporeans are eligible for the Matched Retirement Savings Scheme?

A

435,000

76
Q

Who are eligible for Matched Retirement Savings Scheme?

A

Those aged 55 to 70 + fulfil other criteria (Low retirement savings)

77
Q

What is the maximum amount of RA Savings to be eligible for this scheme?

  • Matched Retirement Savings Scheme -
A

Less than prevailing BRS

78
Q

What is the maximum average monthly income for this scheme?

  • Matched Retirement Savings Scheme -
A

$4k

79
Q

What is the maximum annual value of residence for this scheme?

  • Matched Retirement Savings Scheme -
A

$13k

80
Q

How much properties can you own before you are not eligible for this scheme?

  • Matched Retirement Savings Scheme -
A

1

(2 or more you are not eligible)

81
Q

When was Matched Retirement Savings Scheme launched?

A

2021

82
Q

Who can you use Medisave on?

(Singaporeans & PR ONLY)
6 categories

A
  1. You
  2. Spouse
  3. Children
  4. Parents
  5. Parents-in laws
  6. Grandparents
  • NO siblings, NO grandparents-in laws
83
Q

What is the sequence of cash top ups to MA?

A

MA (Up to BHS) > SA/RA (Excess up to BRS or FRS) > Excess Excess OA

84
Q

What is the minimum age to make a CPF Nomination?

A

16 years old and above

85
Q

What happens if you have no CPF Nomination?

A

CPF bequests transferred to Public Trustee Office for distribution.

There will be admin fees (Min. $15) taken from the CPF savings (inclusive of GST).

86
Q

What is the Enhanced Nomination Scheme (ENS)?

A

Given to nominee’s CPF accounts

87
Q

What is the Special Needs Savings Scheme (SNSS)?

A

For special needs children

88
Q

What does CPF Nomination cover?

A
  1. CPF Savings in OA, SA, MA
  2. Unused CPF Life Premiums, if any (RA)
  3. Discounted Singtel shares
89
Q

What is not covered in CPF Nomination?

A
  1. Properties bought using CPF savings
  2. Payouts from Dependants Protection Scheme
  3. Investments under CPFIS
90
Q

What is the admin charge for the 1st $1k of un-nominated savings?

A

2.4%

91
Q

What is the admin charge for the next $9k of un-nominated savings?

A

1.5%

92
Q

What is the admin charge for the next $240k of un-nominated savings?

A

0.75%

93
Q

What is the admin charge for the next $250k of un-nominated savings?

A

0.45%

94
Q

What is the admin charge for more than $500k of un-nominated savings?

A

0.3%

95
Q

What is the Flooring Strategy?

A
  1. Identify essential expenses (needs) and discretionary expenses (wants/luxeries)
  2. Match Income streams to expenses (Needs with inflation hedged, safe, predictable products. Wants with Growth, capital appreciation, volatile products)
96
Q

What is the Bucketing Strategy?

A

Assets allocated to different buckets with various risks and returns invested over different time periods.

Each bucket is withdrawn sequentially at a fixed period.

97
Q

What is the Silver Housing Bonus?

A
  1. Downsizing current (HDB flat) & Private Property (AV < $13k) –> 3-room or smaller flat
  2. Receive up to $30k in cash when you top-up proceeds into CPF RA and join CPF Life
98
Q

What is the Lease Buyback Scheme?

A
  1. Sell tail-end lease to HDB and receive $$
  2. Proceeds used to top up RA
  3. Then these $$ are used to buy a CPF Life PLan
99
Q

Hoa many households have opted for LBS since its launch in 2009?

A

92k households

100
Q

What is the DBS Home Equity Income Loan?

A
  1. NO monthly loan repayments

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