How do I prepare my parents for retirement?

Both my parents are turning 60 within the next 3 years. They have close to no CPF (< $5000 excluding MA) and no savings. I intend to deposit $600 to their CPF per parent per year from 2021- 2025. Let's say I have an additional $50 budget per month for them. How should I help them be self-sufficient in their retirement days?

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Loh Tat Tian

19 May 2020

Founder at PolicyWoke (We Buy Insurance Policies)

Oh wow. I missed this thread.

For CPF (if RA is very little), when they apply for withdrawal from RA at 65, the minimum amount (currently in May 2020) is $250 per person. You have an option for them to remain in RSS scheme, or CPF LIFE Scheme. (if cashflow is an issue, you can just top up $3,000 every year into their RA account).

In order to go onto CPF LIFE Scheme, you will require to look at this https://www.cpf.gov.sg/members/FAQ/schemes/reti... and also

https://www.cpf.gov.sg/members/FAQ/schemes/Reti...

For further details and analysis, it will be difficult because there is a breakeven point where each 30k will give additional monthly payouts etc. So best to check with CPF in this case.

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Cryotosensei

19 May 2020

Blogger at diaperfinancingfund.blogspot.com

Last year, upon reading that ICBC gives 1.1% per annum for fixed deposits as Low as $500, I immediately did so and opened up a 3-month fixed deposit account for $500.

then when the fixed deposit matured this year, I topped up more money and extended it for the next 3 months.

i suggest you do this with your parents. $500 for 3 months isn’t a lot of commitment, provides an easy win and make even them feel shiok enough into saving more. start small, lock in the habit of savings, move on to more ambitious saving goals

btw if your parents feel comfortable with venturing out of the conventional banks, they can open up a Singlife account (2.5% per annum for the first $10k). Check out the Singlife reviews at Seedly

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