New NTUC Income Retirement Plan – FlexRetire

About FlexRe­tire

FlexRe­tire is a reg­u­lar premium par­ti­cip­at­ing endow­ment plan. It allows you to start sav­ings reg­u­larly now for your planned retire­ment age of 55, 60, 65 or 70 Last Birth Date (LBD). Upon retire­ment, you will receive reg­u­lar retire­ment pay­out for the next 10, 20 or 30 years. You will also enjoy free pro­tec­tion of 105% premium paid-to-date plus 100% of the bonuses against death and Total Per­man­ent. Dis­ab­il­ity. FlexRe­tire is guar­an­teed accept­ance, i.e. any­one can pur­chase the plan without the needs for a med­ical check-up.

FlexRe­tire is divided into 2 phases — Accu­mu­la­tion Period and Pay­out Period.

Accu­mu­la­tion Period = Chosen Retire­ment Age (up to age 55/60/65/70 LBD) – Entry Age (LBD)

Pay­out Period = Choice of 10, 20 or 30 years

Dur­ing the Accu­mu­la­tion Period, you can choose to pay the premium in 5 years, 10 years or Accu­mu­la­tion Period minus five years. That is, if the Accu­mu­la­tion Period is 25 years, you only need to pay for 20 years and start get­ting the reg­u­lar pay­out from the 25th year onwards.

At the end of Accu­mu­la­tion Period, you can choose to

  • with­draw the full matur­ity amount;
  • with­draw par­tial matur­ity amount, rede­posit the
    remain­ing cash (at least $10,000) with Income and receive monthly pay­out for the next 10/20/30 years; or
  • save the full matur­ity amount with Income with addi­tional cash value given and receive monthly pay­out for the next 10/20/30 years.

Dur­ing the Pay­out Period when you are receiv­ing the monthly pay­out, you can choose to:

  • use the pay­out as your monthly retire­ment income; or
  • deposit the pay­out with NTUC Income at the cur­rent interest rate of 3.5% p.a.. This is a deposit
    account and you can with­draw the money anytime.

At the end of the Pay­out Period, you will receive

  • the final monthly payout;
  • Future Gift, pro­jec­ted at 24 times of the final monthly pay­out; and
  • the reg­u­lar depos­ited pay­ment accu­mu­lated with NTUC Income and accu­mu­lated interest, if any.

The min­imum entry age is 20 and last entry age is 60 LBD.

 

How FlexRe­tire Lets You Retire the Way You Want?

Sup­pose you are now 35-year-old and desire a monthly retire­ment
income of at least $1,000 for 20 years when you retire at age 65. You can start build­ing your retire­ment funds through FlexRe­tire plan as follows:

Monthly Premium Yearly Premium Total Premium Paid for 10 years Guar­an­teed Matur­ity Amount at 65 years old Bonus upon matur­ity @ 4.75% IRR* Total Matur­ity Amount at 65 years old
$1082.10 $12,485 $124,850 $124,850 $75,796 $200,646

If the full matur­ity amount is re-deposited with NTUC Income at the end of Accu­mu­la­tion Period,

New Prin­cipal Amount Pro­jec­ted Monthly Pay­ment @4.75% IRR* for 20 years Pro­jec­ted Future Gift Total Amount drawn over 20 years, includ­ing Future Gift
$454,704 $2,216 $53,184 $585,024

*IRR : Invest­ment Rate of Returns

An Illustration for FlexRetire Plan

Illus­tra­tion for FlexRe­tire Plan

Deflation again in December 2014

Infla­tion was neg­at­ive 0.2% in Decem­ber 2014, com­pared to Decem­ber 2013. This was due mainly to fluc­tu­ations in cer­ti­fic­ate of enti­tle­ment premi­ums, soft hous­ing rental mar­ket and cheaper oil.
This is the second con­sec­ut­ive month that Singa­pore encoun­ters defla­tion, with the index at –0.3% in Novem­ber 2014.

Core infla­tion, which excludes the cost of accom­mod­a­tion and private road trans­port, how­ever, remained at 1.5% in Decem­ber 2014. Food and pre­pared meals were the largest pos­it­ive con­trib­ut­ing factor to infla­tion in Decem­ber 2014.

The over­all infla­tion in 2014 is 1%, com­pared with 2.4% in 2013, the low­est since 2009. The core infla­tion in 2014 increased to 1.9% from 1.7% in 2013.

Offi­cial fore­casts for head­line infla­tion is between 0.5% to 1.5%, while the core infla­tion is between 2% to 3% in 2015.

Elderly to use more Medisave to pay for outpatient services

With effect from 1 April 2015, a patient who is aged 65 and above can use up to $200 a year from the Medis­ave sav­ings to pay for the fol­low­ing ser­vices:-
a) Out­pa­tient med­ical treat­ment received at des­ig­nated health­care insti­tu­tions, and gen­er­ally cov­ers med­ical ser­vices and drugs, tests and invest­ig­a­tions which are neces­sary for dia­gnosis or treat­ment of a med­ical con­di­tion and ordered by a doc­tor.
b) Screen­ing tests that are cur­rently under the Integ­rated Screen­ing Pro­gramme. This includes recom­men­ded screen­ings for selec­ted chronic dis­eases and can­cers.
c) To sup­ple­ment other out­pa­tient uses of Medis­ave.  This includes the new $300 limit for out­pa­tient scans that was imple­men­ted on 1 Janu­ary 2015, the exist­ing $400 Mediave400 limit[1], the vari­ous lim­its for can­cer treat­ment and dia­gnostics, and other out­pa­tient with­drawal lim­its. In addi­tion, the eld­erly can also use it to pay for the 15% co-payment when using Medis­ave for chronic dis­ease treatment.

Termed Flexi-Medisave, a patient can use up to $200 from his own Medis­ave or tap on his spouse’s Medis­ave, as long as the spouse is also aged 65 and above.

Flexi-Medisave can be used for out­pa­tient med­ical treat­ment at des­ig­nated health­care insti­tu­tions. These are:
a)    Spe­cial­ist Out­pa­tient Clin­ics (SOCs) at the pub­lic hos­pit­als and national spe­cialty centres;
b)    Poly­clin­ics; and
c)    Med­ical GP clin­ics par­ti­cip­at­ing in the Com­munity Health Assist Scheme (CHAS).

[1] Cur­rently, eld­erly patients can already use the Medisave400 limit for the fol­low­ing expenses:
a)    Out­pa­tient treat­ment of 15 approved chronic con­di­tions under the Chronic Dis­ease Man­age­ment Pro­gramme (CDMP);
b)    Screen­ing mam­mo­grams for women aged 50 and above; and
c)    Vac­cin­a­tions includ­ing Hep­at­itis B, pneumo­coc­cal and flu vaccinations.

 

Deflation in November 2014

Singa­pore has its neg­at­ive infla­tion, i.e., defla­tion, after 5 years from the last defla­tion in Decem­ber 2009 amid the global fin­an­cial crisis. The con­sumer price index was –0.3% in Novem­ber 2014 over Novem­ber 2013, mainly due to lower COE prices, fall­ing accom­mod­a­tion costs and cheaper crude oil. In fact, private road trans­port fell 7% in Novem­ber 2014 over Novem­ber 2013, while accom­mod­a­tion costs declines 1.2% amid a soften­ing rental market.

How­ever, the core infla­tion, which excludes the costs of private road trans­port and accom­mod­a­tion, was up 1.5% in Novem­ber 2014 over Novem­ber 2013. Food infla­tion was up 2.9%, due to increases in non-cooked items and pre­pared meals. This is due to the high wage costs amid the tight labour market.

Experts have fore­cast the core infla­tion in 2015 to aver­age between 2% to 2.5%, while the head­line infla­tion will be between 1% to 1.5%.

Focus Group Discussions on enhancement to CPF

CPF Advis­ory Panel has just announced a series of Focus Group Dis­cus­sions (FGD) to be con­duc­ted from mid-November 2014 to mid-January 2015. The dis­cus­sion will be on the fol­low­ing topics:-

  1. Min­imum Sum — how to adjust bey­ond 2015 for future retirees
  2. Lump sum with­draw­als at age 65 years — how much should CPF mem­bers be able to with­draw and under what conditions
  3. CPF pay­outs — how could CPF pay­outs be adjus­ted to address cost of liv­ing increases over time
  4. Altern­at­ive invest­ments and annu­it­ies — how to provide more flex­ib­il­ity for CPF mem­bers who are pre­pared to take on more risks.

You can email to cpf_panel@mom.gov.sg to con­trib­ute your ideas on the above top­ics or to sign up for the FGD.  The first 4 FGDs sched­ule to dis­cuss the first 3 top­ics are as follows:-

  •  15 Novem­ber 2014 (Sat­urday) 9.00am to 12.30pm at *SCAPE
  • 22 Novem­ber 2014 (Sat­urday) 9.00am to 12.30pm at *SCAPE
  • 9 Decem­ber 2014 (Tues­day) 6.30pm to 9.30pm at the National Lib­rary Building
  • 10 Janu­ary 2015 (Sat­urday) 9.00am to 12.30pm (venue to be in town area)

There will be more FGD ses­sions to be announced later.

For more inform­a­tion, please visit http://www.cpfpanel.sg

Lease Buyback Scheme extended to 4-room HDB flat

On 3rd Septem­ber 2014, the Min­istry of National Devel­op­ment (MND) and the Hous­ing & Devel­op­ment Board (HDB) announced four enhance­ments to the Lease Buy­back Scheme (LBS) with effect from 1 April 2015.
Only house­hold with at least one of the owner a Singa­por­ean and all own­ers must be at least at CPF Draw-Down Age in order to par­ti­cip­ate in this LBS.

Firstly, the LBS will be exten­ded to 4-room HDB flats. On top of the pro­ceeds the own­ers receive from selling the tail-end lease of their flat to HDB, they will receive a fur­ther $10,000 cash bonus per house­hold if the total CPF top-up is $60,000 or more. If the total CPF top-up is less than $60,000, the house­hold gets a pro-rated bonus of $1 for every $6 CPF top-up.

Secondly, the income ceil­ing for par­ti­cip­at­ing in the LBS will be raised from $3,000 to $10,000 per month. The income ceil­ing for the Sil­ver Hous­ing Bonus (SHB) scheme will be raised from $3,000 to $10,000 correspondingly.

Thirdly, each owner of a house­hold will only be required to top up his/her CPF RA to half the age-adjusted pre­vail­ing CPF Min­imum Sum (MS), instead of the full age-adjusted pre­vail­ing MS cur­rently. There­fore, they will be able to retain more cash upfront from par­ti­cip­at­ing in the LBS. How­ever, for any cash pro­ceeds above $100,000, the own­ers will still be required to top up the excess amount into their respect­ive CPF RAs. How­ever, if you are a sole-owner of the HDB flat, this rule does not apply to you and you will still be required to top up your CPF RA to the full age-adjusted pre­vail­ing CPF MS.

Fourthly, eld­erly house­holds will have the flex­ib­il­ity to choose the length of lease to retain, based on their age and pref­er­ences, instead of hav­ing one stand­ard 30-year lease for all. Those aged 70 to 74 will have the option of a 25-year lease, those aged 75 to 79 will have the option of a 20-year lease, and those aged 80 or older will have the option of a 15-year lease. On the other hand, those who prefer longer leases can choose to retain more than the min­imum required for their age, in 5-year incre­ments, up to a max­imum of 35 years. Any uncon­sumed lease will be refun­ded to the owner’s estate. A house­hold must have lived for at least 5 years and have at least 20 years of lease to sell to HDB to be eli­gible for the LBS.

Update to Critical Illnesses definitions and coverage

Life Insur­ance Asso­ci­ation Singa­pore (LIA) has just made two changes to the Crit­ical Ill­nesses (CIs) bene­fits offered under new indi­vidual and group insur­ance policies. These changes take imme­di­ate effect.

Firstly, the defin­i­tions to the “severe stage” of the cur­rent 37 CIs are updated. This is to reflect the advances in clin­ical prac­tices, med­ical sci­ence and technology.

Secondly, LIA now allows more than 30 CIs to be covered in a crit­ical ill­ness plan. Cur­rently, only 30 out of the 37 CIs are selec­ted by each insurer to be included in a life insur­ance plan.
Addi­tional crit­ical ill­nesses out­side the 37 stand­ard CIs will be set and defined by indi­vidual insurer. Insurer is also allowed to offer single-illness CI plan such as cancer.

The cur­rent defin­i­tion of the 37 CIs will not be sold from 1 Feb 2014.