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To transfer CPF to homemaker wife, or not?

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Old 14-03-2017, 11:45 AM   #31
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why not doing this?

Keep 0 QA Max FRS/MA, at 55 opt BRS and the remaining still keep at SA or withdraw.
OA/cash top up ->spouse SA will max eventually, at her 55 opt FRS or not sure can opt BRS also.
All future bequest go to kids account and their rolling cycles go on.
whatever is transferred into wife sa is stuck there. the opportunity cost of my wife maxing out at 166k, is 146k at my oa account. 20k over so many years, it is ok. i forego that difference to retain the flexibility to withdraw anytime i want after 55.

wrong about the bequest. if you choose cpf life standard. you will have very little bequest for you kids.
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Old 14-03-2017, 01:05 PM   #32
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Trying to seek the opinion of this group's members...
My wife is not working (so practically has almost nothing in her CPF). I'm wondering, whether or not I should transfer some of my CPF to her.
Some of my consideration points :
1) If I accumulate only in my own CPF, let's say the retirement payout in the future is $2000 for me to share with her. But if I transfer my CPF to her, and each of us get $1000 in the future, then the outcome is just the same ?
2) If I (as sole breadwinner) passed away, she will also get my CPF, so whether or not I transfer to her, doesn't make difference ?
3) If anything, transferring to her CPF will win with the extra 1% interest rate because mine is already >$60k now.
4) Obviously if a divorce ever happens, it totally makes a difference, so no need to discuss about that point here.

Is there anything else to be considered in this situation ? Thanks for sharing!

No need to think further. Just do it, unless you think divorce is quite possible or you think you can sure do better with money in excess of BRS.
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Old 03-06-2017, 11:42 PM   #33
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If your spouse is a homemaker, the decision to top up her FRS must be considered carefully, as the amount is likely very significant, and it has to come out from either your CPF OA/SA or cash. This will short change your post 55 savings very significantly unless you are a high income earner, and have don't have any more housing mortgage debt.
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Old 04-06-2017, 11:05 AM   #34
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I was also pondering this question for my mum. Homemaker, never worked so really less than 10k in her CPF. I give money allowance to her between 700 to 1k per month. She is 65.

Was thinking whether I should do a one shot 80k topup to her RA via cash/ OA ( still need to check if lump sum topup at this amount is possible). Then she can withdraw the needed 700 from CPF monthly while the rest of the money has better interest rates compared to savings account.

Any advise?
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Old 04-06-2017, 11:56 AM   #35
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This will short change your post 55 savings very significantly....
I don't understand this comment. The money doesn't disappear! It earns at least 4% interest (and bonus interest if your spouse hasn't maximized that). Usually there's some tax relief, too. Then the top up goes toward the spouse's CPF LIFE annuity, with the possibility that some funds are "pushed" into what amounts to a high yielding, on demand savings account from age 55.

Topping up a spouse's Special Account is taking funds that might be "post 55 savings" and moving them into a vehicle that is definitely "post 55 savings."
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Old 04-06-2017, 12:28 PM   #36
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I don't understand this comment. The money doesn't disappear! It earns at least 4% interest (and bonus interest if your spouse hasn't maximized that). Usually there's some tax relief, too. Then the top up goes toward the spouse's CPF LIFE annuity, with the possibility that some funds are "pushed" into what amounts to a high yielding, on demand savings account from age 55.

Topping up a spouse's Special Account is taking funds that might be "post 55 savings" and moving them into a vehicle that is definitely "post 55 savings."
When reached post 55, whatever prevailing balance left in the SA+OA is used as premium for spouse's CPF Life Annuity for FRS put aside in the RA. This RA amount will be locked in permanently and is as good as illiquid funds.
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Last edited by culture_counter; 04-06-2017 at 12:34 PM..
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Old 04-06-2017, 03:24 PM   #37
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That's a possible, different argument. But "post 55 savings"? Yes, that's exactly what CPF SA top ups are.
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Old 06-06-2017, 09:33 AM   #38
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That's a possible, different argument. But "post 55 savings"? Yes, that's exactly what CPF SA top ups are.
Actually what I meant was that if spouse's future RA still fall short of a large amount from FRS, then the RA is akin to being trapped in the CPF Annuity scheme. Spouse would not be eligible to draw out any cash, be it in SA or OA post 55 savings. You have to meet FRS minimum sum before you can treat CPF like a bank and take up any excess for use.

This would be a point to ponder, as to whether to top up.
"A bundle of cash in hand, is better than 2X bundles of cash in the bush" - haha, an old English proverb.
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Last edited by culture_counter; 06-06-2017 at 09:38 AM..
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Old 06-06-2017, 10:58 AM   #39
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....then the RA is akin to being trapped in the CPF Annuity scheme.
That's something different: liquidity. If you want to say that some fund transfer could result in less liquid funds, fine, say that. An annuity, or an increase in an annuity, is still "post 55 savings." Indeed, the bigger one's CPF LIFE annuity, the less additional savings one needs outside CPF LIFE.

We ought to be precise when describing these issues. It's important!
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Old 08-06-2017, 11:17 PM   #40
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That's something different: liquidity. If you want to say that some fund transfer could result in less liquid funds, fine, say that. An annuity, or an increase in an annuity, is still "post 55 savings." Indeed, the bigger one's CPF LIFE annuity, the less additional savings one needs outside CPF LIFE.

We ought to be precise when describing these issues. It's important!
Yes, it's all about liquidity. What's the point of having illiquid funds locked in cpf annuity which you can only start drawing down from 65 years old, which is at least more than 10 years ahead. Liquidity in cash when emergency funds are needed must also be provided for.
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Last edited by culture_counter; 08-06-2017 at 11:19 PM..
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Old 09-06-2017, 08:02 AM   #41
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What's the point of having illiquid funds locked in cpf annuity which you can only start drawing down from 65 years old, which is at least more than 10 years ahead.
If you plan to die with no heirs at age 65 or younger, then there's no point. Otherwise, the point is that the yields are attractive.

Savings is all about deferred consumption. If your savings grow faster and bigger, you can consume more in the future. Many people want to do that! It's quite rational. (And, at the level of savings CPF LIFE entails, it's never a huge amount in absolute terms. If you have a million or three, you'll have to find some other options for most of those dollars anyway.)

What is a home purchase, by the way? Why on earth would you take highly liquid cash, put it in a down payment, and tie it up in a hunk of real estate that's much less liquid -- and that attracts tax (not tax relief)? Now THAT would be foolish, right?

And why on earth would you spend any time at a university? That's a waste of time since you could be earning cash, cash, CASH -- now, now, NOW!
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Last edited by BBCWatcher; 09-06-2017 at 08:06 AM..
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Old 11-06-2017, 11:09 PM   #42
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you can withdraw balances above 83k if you pledge your home. your wife is not working. it is very difficult to hit 83k for her just by transferring to her along.

eg, if you have 153k in oa + sa. by right you can withdraw 70k at age 55.

but if you transfer 30k to her, your oa +sa left 123k. her oa+sa now have 30k. you can only withdraw 40k.

the question is do you need this extra 30k cash at 55 or do you want a higher stable monthly payout when you hit 65.
Agree to this......
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Old 12-06-2017, 12:07 PM   #43
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Trying to seek the opinion of this group's members...
My wife is not working (so practically has almost nothing in her CPF). I'm wondering, whether or not I should transfer some of my CPF to her.
Some of my consideration points :
1) If I accumulate only in my own CPF, let's say the retirement payout in the future is $2000 for me to share with her. But if I transfer my CPF to her, and each of us get $1000 in the future, then the outcome is just the same ?
2) If I (as sole breadwinner) passed away, she will also get my CPF, so whether or not I transfer to her, doesn't make difference ?
3) If anything, transferring to her CPF will win with the extra 1% interest rate because mine is already >$60k now.
4) Obviously if a divorce ever happens, it totally makes a difference, so no need to discuss about that point here.

Is there anything else to be considered in this situation ? Thanks for sharing!
If above are your only concerns, I say transfer to spouse.

If you have 166k, your payout is $1330 on average.

If you split it with spouse, for the same 166k, you and wife get 725x2=1450.

So you decide, if you really need to withdraw amount above BRS or for spouse to get life payout when you not around as wife may not know how to handle bequest.
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Old 12-06-2017, 12:29 PM   #44
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If you split it with spouse, for the same 166k, you and wife get 725x2=1450.
And it's even better than that because spouses rarely die at exactly the same time. The surviving spouse still receives his/her monthly payout, for life.
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Old 12-06-2017, 01:26 PM   #45
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Whatever scheme (even if Ponzi), new money needs to be continuously injected to sustain the payout of old money. That's why this scheme has been made compulsory in order for it to be sustainable in the long run. Hopefull, All's Well That Ends Well!!!
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