To transfer CPF to homemaker wife, or not?

[BBCWatcher]

That's what both dork and bbcwatcher were trying to say?
Correct?

I don't know what Dork32 was trying to say with "zero interest," but your description is correct.

Your RA is created at age 55, and your RA earns interest -- all of your RA. (Your OA, SA, and MA also earn interest. All of these accounts earn attractive, positive, non-zero interest.) Later, you start your CPF LIFE lifetime annuity payouts with the premium paid from your RA. (You can start them anywhere from age 65 to age 70. The longer you wait until age 70, the higher your monthly payout amount. You should wait if you are in reasonably good health and if you don't need the money right away for present consumption.) You have the option to withdraw "excess" principal, above the Basic Retirement Sum (for example), if you wish, when you wish (from age 55, with a 20% option available from age 65), in any increment(s) up to your applicable withdrawal limit. If you leave that "excess" principal alone and let it earn interest, it'll earn interest, and lots of it. That interest will boost your CPF LIFE annuity payouts. And/or that interest will boost your bequest to your nominated heirs.

The more future income you have and can depend on, the less you need to save today. This is real money earning really high interest, not some bizarro world where there is no future. (Unless you're terminally ill, and then maybe there isn't a long future for you.)

 

[K|muRa^84]

If one has 0 dependents, does his gameplan when it comes to choosing between BRS/FRS and Basic/Standard need to be significantly different? (Let's assume monies >>> prevailig FRS)

 

[BBCWatcher]

If one has 0 dependents, does his gameplan when it comes to choosing between BRS/FRS and Basic/Standard need to be significantly different? (Let's assume monies >>> prevailig FRS)

Maybe, but exactly how will depend on the situation. Let's pick a few examples:

1. You're in at least reasonably good health and do not need the money for present "emergency" consumption needs. In this case, most likely you should leave all your CPF balances right where they are, let them earn attractive interest, and start collecting your CPF LIFE annuity from age 70 (and with the 2% annual increase option, I would recommend). You would also choose the CPF LIFE Standard plan, since that's a higher monthly benefit with a lower or zero bequest.

2. You're not in reasonably good health, or you need as much money as possible for present emergency consumption needs (such as medical care, home care, etc.), or both. In this case, most likely you would withdraw what you need, as you need it, and leave the rest in CPF. Then you would start collecting CPF LIFE annuities from age 65, Standard Plan, and without the 2% annual increase option.

3. If the situation is the same as #2 except you're in really bad health -- have a terminal diagnosis, for example -- they you'd probably yank every dollar out of CPF that you're allowed to yank, spend what you need, and put the rest (if any) in a Singapore Savings Bond, available to spend on short notice. If your normal withdrawal limit is still not enough to support your immediate consumption needs (e.g. you need funds for hospice care) then you'd apply to CPF for a medical exception to withdraw more.

4. Same as #1, but you have a charitable cause you care about -- maybe Doctors Without Borders. You would do the same as #1 except you would choose the CPF LIFE Basic Plan. You would nominate your preferred charity as your CPF heir.

I'm assuming that zero means zero, that you really have no dependents. If you have a spouse, for example, then these scenarios change.

 

[eric3743]

Quick qn: assuming one has >>> FRS at 55yo, do the leftover monies in the SA/OA continue to earn the relevant i/r forever?

Upon your age at exactly 55, RA is created using OA and SA, MA is limited.
They will inform you by letter on all the statements in your CPF Accounts.
Therefore there is RA, OA and MA.
Should you have enough RA according to your age group, all balance will be moved back to OA.
RA interest is 4%, which is much higher than OA.

SA is no longer exist.
Any Investment taken from SA is still valid, no touch.

 

[kehyi4]

Upon your age at exactly 55, RA is created using OA and SA, MA is limited.
They will inform you by letter on all the statements in your CPF Accounts.
Therefore there is RA, OA and MA.
Should you have enough RA according to your age group, all balance will be moved back to OA.
RA interest is 4%, which is much higher than OA.

SA is no longer exist.
Any Investment taken from SA is still valid, no touch.

erm... this is wrong info

SA continues to exist and function after 55. If you will just take a look at CPF contribution rates and allocation after 55, you will see that a portion (3.5% at 55-60yo) will continue to go to SA:

CPF Contribution and Allocation Rates

 

[dork32]

No, that's just not factually correct. It flows into your CPF LIFE annuity.

First tell the truth, then express your opinion about the truth if you wish.

get your facts right
interest flows into something call Lifelong Income Fund. this fund is totally controlled by garmen. when you die, your nok dont get the money. garmen get to keep this interest.

does it matter what you call this stupid fund

 

[dork32]

Is it right to interpret it as this -
1. For BR + property pledge, the other half of BR will continue to stay in RA earning the interest of 4 or 5%, which determines the whole calculation of monthly payout of a person's cpf life plan.

2. These interest however will not be able to be withdrawn. So regardless how many years later one decides to take the remaining BR Amt out, it's still the original BR amount without any interest.

That's what both dork and bbcwatcher were trying to say?

Correct?

dork is trying to say this

eg, you have 100k in cpf and you reach 65 and you choose cpf life standard and you start to withdraw immediately at 1000 a month

if you die at 66, your kids get 100k - 1000*12 = 88k

if you die at 67, your kids get 100k - 1000*24 = 76k

you can carry on this

your 100k is earning interest but your kids will not getting anything out of it if you die.

if this is not considered as 0 interest, what is?

but if you choose not to die, you continue to get this 1000 as long as you live even though the value of the cpf life is already 0

 

[BBCWatcher]

this fund is totally controlled by garmen.

So are the interest rates, so are the compulsory contribution rates, so is all of CPF, so are taxes, so is the currency (Singapore dollars), and so are myriad other aspects of life. If you object to this particular government, you're going to have to leave Singapore. Meanwhile, anybody/everybody who lives in Singapore ought to optimize their financial lives as best they can...and get truthful, unemotional, factual information. Plus opinions if you wish, clearly labeled.

 

[dork32]

If one has 0 dependents, does his gameplan when it comes to choosing between BRS/FRS and Basic/Standard need to be significantly different? (Let's assume monies >>> prevailig FRS)

i think i can answer this better than bbc

i will choose basic if i have dependent. it will leave some money to them if i die early
i will choose standard if i have 0 dependent. i will try to draw as much as possible for myself. afterall, i will not be getting anything if i die.

 

[dork32]

So are the interest rates, so are the compulsory contribution rates, so is all of CPF, so are taxes, so is the currency (Singapore dollars), and so are myriad other aspects of life. If you object to this particular government, you're going to have to leave Singapore. Meanwhile, anybody/everybody who lives in Singapore ought to optimize their financial lives as best they can...and get truthful, unemotional, factual information. Plus opinions if you wish, clearly labeled.

the question is not whether i object or not, whether i am going to leave singapore or not.

it is whether i am wrong to say that the interest is 0

 

[BBCWatcher]

if this is not considered as 0 interest, what is?

No, that not "zero interest." It's a world class, lifetime annuity -- paid for with funds that earned a high rate of interest -- that simply didn't work out too well for that particular individual and his heirs. Just like having fire insurance (paid for with a premium that was boosted with high interest) with no fire, no claims.

I guess you really don't understand lifetime annuities and longevity insurance. OK, I suppose that's possible since they're relatively new concepts in Singapore. But they were invented at least as far back as the early 1800s.

 

[apatheticme]

This annuity topic between the two of you is getting real tiresome. It spans over months, across many threads and pages, bloating them without adding anything new. Just give it a rest already? Please?

 

[dork32]

I guess you really don't understand lifetime annuities and longevity insurance. OK, I suppose that's possible since they're relatively new concepts in Singapore. But they were invented at least as far back as the early 1800s.

i guess you dont understand the simple concept of mathematics. they can say that the annuity earns 100% interest and it goes to the common fund. you can have nothing of it. this is equivalent to 0 interest to the individual

maybe you do, you are a garmen mole and will post anything and everything to support the garmen.

 

[dork32]

if dbs post this, will you laugh your teeth off?

dbs gives 10% pa for your savings accounts. 0.05% is credited to your account and the other 9.95% will go to a pooled fund. this fund is used to maintain the atm, your internet banking platform, the branches and the director's huge bonuses. this is to allow you to enjoy all the benefits of banking with dbs

 

[MikeDirnt78]

i guess you dont understand the simple concept of mathematics. they can say that the annuity earns 100% interest and it goes to the common fund. you can have nothing of it. this is equivalent to 0 interest to the individual

maybe you do, you are a garmen mole and will post anything and everything to support the garmen.

0 interest to the unfortunates who live up to the BE age.

Some interests/profits to the lucky ones who live beyond the BE age.

This is what a pooled insurance is all about. Many will lose, some will gain but ultimately, insurance provider wins it all.

 

[dork32]

insurance provider wins it all.

i love this sentence

 

[elnewbie]

All, I have checked with CPF. For the property pledge withdrawal above the BRS, you can withdraw as many times as you like, in any amount but they mentioned processing time will take at least 2 weeks.

They said can withdraw as little as $10 each time and whatever's left in RA is still earning the 4% interest.

 

[henrylbh]

All, I have checked with CPF. For the property pledge withdrawal above the BRS, you can withdraw as many times as you like, in any amount but they mentioned processing time will take at least 2 weeks.

They said can withdraw as little as $10 each time and whatever's left in RA is still earning the 4% interest.

Wish you have also asked whether amount withdrawn can be refunded with accrued interest.

 

[Opps-gal]

U are wrong!

People here are talking about withdrawal above BRS, not the normal withdrawal of funds!

U have to apply to pledge your property = application to withdrawal funds above BRS in the RA. Once your application to pledge property is approved, CPF will automatically pay the funds above BRS to your bank account or via a cheque if u dun have bank account setup.

If don't pledge property, can withdraw fund in BRS after 65 years old?

So is it better to transfer CPF to homemaker wife or not?

 

[stiffs]

Alternative perspective, CPF Life scheme start paying interest after your 93th birthday and increases monthly, as long as you lived.