Thanks for this! I dont think many actually look at CPF nomination when they are younger as most of the CPF would be used for housing, and when they are older, they forgot about the nomination.
Ive been reading up on this and doing some back of envelop calculation and the retirement calculator offered by CPF board, seems like at the current rate, to get the monthly payout breakeven (means the premium you will pay using the CPF account vs the total amount you are expected to get) is around 13 years. So that makes it around 68 years old. So if you think that you will live pass 68 years old, opt for the monthly payout. Do note that current Singaporean life expectancy is around 84. If based on 84 expected life, you will be getting 1.2x more the premium you paid.
But at the age of 55, you should be able to make an informed decision based on your health status at that point in time. If you have things like high blood, diabetics and other illnesses. then you can consider putting less money into the monthly payout method and take out lump sum.
I agree to a certain extent. Do also remember that the BRS and FRS are constantly changing. (likely to adjust higher along the way, not lower). And also the premium you pay to get the monthly payout will also change until you hit 55. So what makes it logical now, might not be economical when you turn 55.
When a person who has CPF (Central Provident Fund) savings in Singapore passes away, the distribution of their CPF savings is governed by specific rules and procedures set by the CPF Board.
If the deceased had made a CPF nomination, the CPF savings will be distributed according to the nominee’s instructions. CPF nominations take precedence over the deceased's will in terms of the distribution of CPF savings.
If no CPF nomination was made, the CPF savings will be distributed according to the Intestate Succession Act (if the deceased did not leave a will) or the terms of the will (if one exists).
Intestate Succession Act: The CPF savings will be distributed among the legal heirs based on the intestacy rules, which generally prioritize the spouse, children, parents, and siblings in that order.
OA and SA - will be distributed
Remaining of RA - will be distributed
Investments made using the CPF funds will also be distributed
Also want to touch on the importance of CPF nomination and also on the wider topic of writing a will. There is a good article on straits times on it
Which one should you all choose? Monthly Payout or Lump Sum withdrawal?
For Elders. there are a few way to use the RA
Monthly Payout - CPF Life
Lump sum withdrawals - can withdraw at 65, money above the basic retirement sum. If younger, at 55, one can withdraw amount above Full Retirement sum
So whatever is left after all the withdrawal, if the elder pass on, will be distributed like what Nicole mentioned
When a person who has CPF (Central Provident Fund) savings in Singapore passes away, the distribution of their CPF savings is governed by specific rules and procedures set by the CPF Board.
If the deceased had made a CPF nomination, the CPF savings will be distributed according to the nominee’s instructions. CPF nominations take precedence over the deceased's will in terms of the distribution of CPF savings.
If no CPF nomination was made, the CPF savings will be distributed according to the Intestate Succession Act (if the deceased did not leave a will) or the terms of the will (if one exists).
Intestate Succession Act: The CPF savings will be distributed among the legal heirs based on the intestacy rules, which generally prioritize the spouse, children, parents, and siblings in that order.
OA and SA - will be distributed
Remaining of RA - will be distributed
Investments made using the CPF funds will also be distributed