Come in Year 2025 the enhanced retirement sum will be 4x of the Basic Retirement Sum. With the Basic Retirement sum increasing to $114,100 in year 2027. The Full Retirement sum will be $228,200. The Enhanced Retirement Sum will be 4x of BRS which is equal to $456,400. My age will be 50 whereby i still have 5 more years to go till 2032 before i reach age 55.
Based on the current projection of 3.5% per annum increase of BRS retirement sum, the FRS will be projected to be $271,200. The BRS in year 2032 will be $135,600 and the ERS will be $542,400.
For people who can reach the ERS sum in year 2032, they can potentially get $4,100 per month for the rest of their lives. That is $49,200 per year.
From 2032 to 2042 with the interest rate assuming at 4%, the $542,400 will balloon to $808,627. Such is the power of compounding. In order to gain back the total amount of $808,677, one would need live at least 16.5 years which is 81.5 years old before they can get back the money that was in their CPF RA. If i manage to have $542,400 in my SA and Ordinary accounts when i am age 55. Assuming if i only put the $271,200 and the rest of the money continues to be in Ordinary and i come up with the table for the below to show what money i will have left in my ordinary earning 2.5% and how much money that RA is going to pay me.
From the computation it can be seen that even though i will be getting less from FRS compared to ERS. However once I reach 82 years of age, i will have accumulated $532,271 in Ordinary account which will generate $13,306 per year and i still have the $532,271 left to use if i need to. To me it will be no brainer to go for FRS instead of ERS and to use the ordinary account as spare cash like an emergency fund. Although some people may prefer to go for ERS and get a higher monthly pay out from 65 years old but my opinion it lacks of liquidity and you cannot access the funds in the event you need it.
Extract from Dollars and Sense website on the table for the changes in BRS , FRS, ERS
| Year that Members Reach Age 55 | ||||||
| 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | |
| Estimated Monthly Payouts Provided By Retirement Sums at Age 65* | ||||||
| BRS | $850 | $870 | $900 | $930 | $950 | $980 |
| FRS | $1,570 | $1,620 | $1,670 | $1,730 | $1,780 | $1,840 |
| ERS | $2,300 | $2,370 | $2,450 | $3,330 | $3,440 | $3,550 |
| Retirement Sums at Age 55 | ||||||
| BRS | $96,000 | $99,400 | $102,900 | $106,500 | $110,200 | $114,100 |
| FRS | $192,000 | $198,800 | $205,800 | $213,000 | $220,400 | $228,200 |
| ERS | $288,000 | $298,200 | $308,700 | $426,000 | $440,800 | $456,400 |
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