Lately, I’ve found it much easier to talk to myself on YouTube.
It’s faster than blogging.
This explains the greater number of videos produced compared to the number of blogs I publish.
Although it’s fast, YouTube is only useful for sharing what might require less mental processing on my part
It’s good for sharing content I have at my fingertips and means I can simply wander around while it still makes sense.
For anything that requires me to think more deeply and organize my thoughts, I find writing to be most effective.
This blog will be about something that requires a little more thought on my part.
This was really inspired by two comments in my latest YouTube video.
If you haven’t watched the video yet, here it is:
A reader told me I was getting older and should spend more of my money before my health deteriorated.
I know the reader’s intentions are good but I don’t have much interest in spending more money than I do now.
In case you’re new to my blog and thinking I’m living like a pauper, I’m not.
I own an apartment and I have a car, for example.
Extra large ticket items in singapore.
However, I have to accept that I am getting older, not just older.
Another reader provided the numbers, saying I’ll be 55 in a couple of years from now.
Then he asked me what I would do with my CPF money and if I would choose FRS or ERS?
These two readers’ comments got me thinking.
This is a problem I’ve always had.
I think a lot and some might say I think a lot.
You know what people say about young people.
They think they are invincible and have plenty of time.
Well, I’m not young anymore.
Although I am still relatively mentally sharp, I can tell that my memory is declining.
According to the doctors, this is normal but I am more worried about dementia now.
So, even though I said before that if we were smart investors, we would opt for FRS and invest the rest of the CPF money ourselves, I can change my mind.
This is really consistent with having a crisis mentality.
Always asking what could go wrong?
Although it is still true that if we were smart investors, we would probably be able to better invest our CPF savings beyond the FRS, there is the issue of age-related issues.
What if we become mentally incapacitated in old age, or worse, in middle age?
For most of us, the answer to this question is to have a larger stream of passive income that does not fluctuate with market conditions.
CPF LIFE will fill this role admirably and by selecting ERS, we will allow it to do an even better job.
ERS is not just for those who are not smart investors but for anyone who wants to have a greater level of certainty in financing their retirement.
I understand that the interest accumulated in FRS or ERS in order for CPF LIFE to provide us with income for the rest of our lives goes to the pool and will not go to our beneficiaries in the event that we bid farewell to this world early than desired.
However, CPF LIFE is an annuity and is an insurance product.
It is insurance against longevity risks.
As with all insurance products, it’s about pooling resources from many people to protect against shared risks.
We may not like the idea of ​​collecting interest on our savings and putting it in a pot instead of the beneficiaries, but if we have a long life, we will have dipped other people’s money into the pot as if our own had been exhausted. .
It must be remembered that CPF LIFE is a retirement financing tool and not an outdated planning tool.
Take the good with the bad.
With this in mind, I checked my latest CPF OA and SA balances.
CPF Organic Farming
$768,628
CBF SA
$350,678
I also checked what my FRS will be in 2026 which is when I turn 55.
Your 55th birthday in 2026?
FRS will be $220,400.
The ERS would be twice that amount, or $440,800.
My CPF account should grow to about $380,000 by 2026 just from the interest earned, assuming no further contribution on my part.
If I were to opt for ERS, it would mean rolling over the entire amount to my newly created CPF RA plus $60,000 of my CPF OA.
This would give me a monthly income of about $3,400 from a standard CPF LIFE plan starting at age 65.
This is probably more than enough to cover the basics in my life.
Of course, I’m hazarding a guess here, because who knows what the world will look like 10 years from now?
As I get older, I find myself less inclined to mess with things.
I appreciate simplicity more and more.
In my last podcast with The Fifth Person, I said that I have little to no inclination to look at new things when it comes to investments.
I just look at what I already have and wait to add it to what I think is a solid business that will pay me money in good times and bad.
Having said that, and in the spirit of this blog post, there may come a time when I may not be healthy enough to make such decisions.
Taking full advantage of CPF LIFE will help mitigate these risks.
Of course we are all different, and what gives me peace of mind may be a source of discomfort to others.
If AK can talk to himself, you can too.
Related link: CBF Life.