CPF Special Account after 55 years old

JuniorLion

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My uncle turned 55 in 2008. Then, 50k was drawn from his SA and placed into CPF Life and he chose CPF Standard Plan.

From his latest statement (Jan 2018), I noticed that he still had some money in his SA (around 9k) and a sum of money in his RA (around 15k).

1) What happens to these monies when he turned 65 in May next year?
2) Can he transfer his OA to his SA now in order to earn higher interest? Will his SA be locked in?
3) Can he withdraw from his SA?
 

crimsontactics

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Why your 50k become 15k?

The money only goes to the pot at 65.

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crimsontactics

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50k was put into "CPF LIFE" Account.
Remaining 15k in RA.
Both my parents turn 55 last year and their money still stays inside their RA and SA.

It only moves to "CPF Life" at 65.

They are not even asked to pick their options yet.

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henrylbh

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My uncle turned 55 in 2008. Then, 50k was drawn from his SA and placed into CPF Life and he chose CPF Standard Plan.

From his latest statement (Jan 2018), I noticed that he still had some money in his SA (around 9k) and a sum of money in his RA (around 15k).

1) What happens to these monies when he turned 65 in May next year?
2) Can he transfer his OA to his SA now in order to earn higher interest? Will his SA be locked in?
3) Can he withdraw from his SA?

CPF Life is mandatory only for those born from 1 Jan 1958. For your uncle, CPF Life is an option.

He can't choose any plan yet until or near payout eligibility age, which is 65. Also to say he chose Standard Plan and yet has RA balance is strange.
 

JuniorLion

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CPF Life is mandatory only for those born from 1 Jan 1958. For your uncle, CPF Life is an option.

He can't choose any plan yet until or near payout eligibility age, which is 65. Also to say he chose Standard Plan and yet has RA balance is strange.

Yes, that's exactly the weird part.

When he clicked on "My Messages", it says "you are on CPF Life Standard. 50,000 has been deducted... your estimated monthly payout is $400-$450 from age 65 onwards.."

When he clicked on his full account details, it also says his RA balance is 15k.

Strange huh?
 

maple96

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My uncle turned 55 in 2008. Then, 50k was drawn from his SA and placed into CPF Life and he chose CPF Standard Plan.

From his latest statement (Jan 2018), I noticed that he still had some money in his SA (around 9k) and a sum of money in his RA (around 15k).

1) What happens to these monies when he turned 65 in May next year?
2) Can he transfer his OA to his SA now in order to earn higher interest? Will his SA be locked in?
3) Can he withdraw from his SA?

1. Before he turn 65 in May, CPF will ask him in writing whether he wants to defer payout or start payout from CPF Life.
2. Cannot transfer from OA to SA.
3. He can withdraw from SA and OA.

Go study his CPF statements from 2008 todate to understand where the 15k in RA come from - mostly interest and bonus from govt maybe. When he start CPF life payout, money in RA will also be paid to him in instalments until it hit zero.

He is under old CPF Life scheme, people here mostly only know or talking about the latest scheme.
 

elnewbie

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It's 2018 now and his uncle is 65 this year.

I suspect CPF will purchase the annuity in January regardless when his birthday month is.

Just a suspicion on my part...
 

The_Davis

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My uncle turned 55 in 2008. Then, 50k was drawn from his SA and placed into CPF Life and he chose CPF Standard Plan.

From his latest statement (Jan 2018), I noticed that he still had some money in his SA (around 9k) and a sum of money in his RA (around 15k).

1) What happens to these monies when he turned 65 in May next year?
2) Can he transfer his OA to his SA now in order to earn higher interest? Will his SA be locked in?
3) Can he withdraw from his SA?
how much is his payout now? or did he delay till 70?
 

JuniorLion

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1. Before he turn 65 in May, CPF will ask him in writing whether he wants to defer payout or start payout from CPF Life.
2. Cannot transfer from OA to SA.
3. He can withdraw from SA and OA.

Go study his CPF statements from 2008 todate to understand where the 15k in RA come from - mostly interest and bonus from govt maybe. When he start CPF life payout, money in RA will also be paid to him in instalments until it hit zero.

He is under old CPF Life scheme, people here mostly only know or talking about the latest scheme.

Exactly. CPF Life keeps evolving, and I don't even know what the old scheme now means..

From what I've read, there will be 2 deductions. First deduction is at the age of 55, and second deduction is at the age of 65 where the RA will be emptied.
 

BBCWatcher

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Will never recover the 7% lost until age 90 onwards.
That’s really not the way to think of it. This isn’t a game.

Better to just start at 65 years old, and put the excess back into RA at the end of the year to earn 4% interest.
No, mathematically that isn’t best. (And it just plows back into CPF LIFE anyway, but with an interruption of interest for at least one month.)

It’s really quite simple: does he need the money to survive before age 70? If yes, fine, start it up. If not, let it ride. The only real purpose this trickle of income can serve is as exactly what it’s designed to do: insure against longevity, insure against the risk of exhausting (or losing, or some of both) his savings. It’s a bigger trickle if he waits and can wait.

I’m assuming CPF LIFE here. Which is a very reasonable choice in the circumstances, most likely.
 

JuniorLion

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That’s really not the way to think of it. This isn’t a game.


No, mathematically that isn’t best. (And it just plows back into CPF LIFE anyway, but with an interruption of interest for at least one month.)

It’s really quite simple: does he need the money to survive before age 70? If yes, fine, start it up. If not, let it ride. The only real purpose this trickle of income can serve is as exactly what it’s designed to do: insure against longevity, insure against the risk of exhausting (or losing, or some of both) his savings. It’s a bigger trickle if he waits and can wait.

I’m assuming CPF LIFE here. Which is a very reasonable choice in the circumstances, most likely.

It doesn't automatically plow back into CPF Life, as I have read. It just stays in the RA, and earns 4% interest. Money in RA functions like a deposit account, which you can withdraw anytime. Unless I'm wrong on this -- would be happy if someone above 65 comes up and say.
 

henrylbh

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Your uncle's case is unusual. He must have opted for CPF Life when it was first introduced and the rules then are different.

You mentioned that he will be getting 450 to 500 from age 65 from CPF Life.

Will he also be getting payout from his RA? Can he top up his RA?
 

JuniorLion

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Your uncle's case is unusual. He must have opted for CPF Life when it was first introduced and the rules then are different.

You mentioned that he will be getting 450 to 500 from age 65 from CPF Life.

Will he also be getting payout from his RA? Can he top up his RA?

1) Will he also be getting payout from his RA? This part I don't know.
2) Can he top up his RA? Yes, he has been topping up $7000 every year.
 

rrr2015

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are you sure one can withdraw RA anytime?
i deposit into my mum's RA so she can get a monthly payout ... she can't withdraw anytime
Money in RA functions like a deposit account, which you can withdraw anytime.
 

BBCWatcher

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If he's in CPF LIFE then no, he cannot withdraw RA funds (without an extra special exception).

I'm just confused why he would start payouts at age 65 (instead of later, or age 70) only to plow the money back into RA immediately -- i.e. he doesn't need the money. That's fantastic that he doesn't need the money now, but why wouldn't he just defer until as late as age 70? Mathematically that's best (no lost interest), there's no extra work involved, and it doesn't decrease his tax relief opportunities (which he's taking maximum advantage of now, with those $7,000 top-ups to his RA that's still below the Full Retirement Sum).
 

koja6049

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It doesn't automatically plow back into CPF Life, as I have read. It just stays in the RA, and earns 4% interest. Money in RA functions like a deposit account, which you can withdraw anytime. Unless I'm wrong on this -- would be happy if someone above 65 comes up and say.

money in RA only functions like deposit account when it is the original money. Extra top ups after 55 cannot be taken out.
 
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