facebookOther than adding cash to the till, how will topping up one’s spouse’s CPF Account benefit non-working spouses with low CPF balances? - Seedly

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Anonymous

11 Sep 2019

Events

Other than adding cash to the till, how will topping up one’s spouse’s CPF Account benefit non-working spouses with low CPF balances?

Should I even bother if my wife is a housewife and doesn't earn an income or even has much in her CPF accounts to begin with?

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Hariz Arthur Maloy

11 Sep 2019

Independent Financial Advisor at Promiseland Independent

Ahh one of my favourite topics I cover with my clients in single-income households.

First the math.

Statistically, females marry a man 2-4 years their senior. And men on average die 4 years earlier than females do. So there’s a big possibility that a wife may have to spend 8 years of her life without her husband (sounds like a good thing, right ladies).

Ok jokes aside, why is this important?

Usually, females are the non employed spouse in the household. And CPF Life payouts are tied to only one CPF Member. There’s no joint account here.

That means if only the husband gets the payout, and he dies 8 years earlier than his wife, his wife will not have a stream of income to depend on from CPF if she doesn’t have her own payouts.

There are 2 ways to top up your spouse’s account. One would be by cash. And the other by transferring one RA balance to the other. The limit here is up to the Basic Retirement Sum of the year.

Example: Husband has 200k in RA. Wife has 50k. He can choose to transfer 112k maximum from his account to hers. Leaving him with the BRS and potentially a higher amount for her.

Is this enough, probably not, so for men with a non-working spouse, make sure you top up her CPF account and also plan above and beyond CPF Life.

I recommend complementing it with another lifetime retirement or annuity product for both of you.

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