CPF Special Account after 55 years old

JuniorLion

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Quite certainly that the top-ups to your uncle's RA will not be channelled into CPF Life (as he has met the min sum for his cohort). I believe besides CPF Life standard plan payout, he can also drawdown his RA like under the old RSS over a period of 20 years. If that's the case, he should commence CPF Life payout without delay while topping up his RA and delaying his drawdown on RA, if fund is not needed. But he can't withdraw RA at one go.

Think this is the case. Will check with CPF Board soon!
 

BBCWatcher

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Yes, please let us know what they say about how voluntary/directed RA top-ups are processed. CPF’s published details seem clear enough to me — I have no idea why anyone wants to argue with what CPF itself writes about how CPF top-ups work — but OK, verbal confirmation is also useful.

I would remind everyone that money serves absolutely no useful purpose unless and until it’s exchanged for something useful (or at least enjoyable): food, clothing, plane tickets to Paris, or whatever. Those useful and/or enjoyable goods and services have a temporal dimension, meaning they can be delivered and consumed in the present or in the future. If you don’t need the money now (i.e. don’t presently need/want the goods and services your money can buy), and if the money is reliably doing fine without your attention, “let it ride.” It’s all quite simple conceptually.
 

henrylbh

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Yes, please let us know what they say about how voluntary/directed RA top-ups are processed. CPF’s published details seem clear enough to me — I have no idea why anyone wants to argue with what CPF itself writes about how CPF top-ups work — but OK, verbal confirmation is also useful.

I would remind everyone that money serves absolutely no useful purpose unless and until it’s exchanged for something useful (or at least enjoyable): food, clothing, plane tickets to Paris, or whatever. Those useful and/or enjoyable goods and services have a temporal dimension, meaning they can be delivered and consumed in the present or in the future. If you don’t need the money now (i.e. don’t presently need/want the goods and services your money can buy), and if the money is reliably doing fine without your attention, “let it ride.” It’s all quite simple conceptually.

The link provided by JuniorLion is clear enough.

I think it would be a disservice to his uncle to listen to your reminder. Recycling his payout to RA is the way even if he doesn't need the money.
 

BBCWatcher

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The link provided by JuniorLion is clear enough.
Link to what? I linked to CPF.

I think it would be a disservice to his uncle to listen to your reminder. Recycling his payout to RA is the way even if he doesn't need the money.
Why? If you don't need the money, why would you start payouts any earlier than required? [Because the (reliable, safe, growing) money is getting lonely without you? :D It doesn't make any logical sense!]

It's a moot issue because JL's father needs the money sooner rather than later, evidently. He doesn't have an adequate emergency reserve fund (evidently), and so he would logically start payouts at age 65 in order to build up an emergency reserve fund of SSBs (presumably).
 

henrylbh

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'money is getting lonely without you?' More like his uncle getting lonely without money. Grab first and recycle. He prefers a combo :s13: I wish I also can have.
 

maple96

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'money is getting lonely without you?' More like his uncle getting lonely without money. Grab first and recycle. He prefers a combo :s13: I wish I also can have.
u can when u reach 65 but u have already been doing for so many years using your father's account! :s13:
 
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BBCWatcher

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I'm really confused why:

(a) Start CPF LIFE payouts at age 65, then take the monthly payouts to top up the Retirement Account;

would be financially better than

(b) Defer CPF LIFE payouts until age 70, then (if desired) take those deferred/higher monthly payouts and plow them into the Retirement Account.

What's the point of (a) if you don't need the money? (Not JL's father, who evidently does need the money sooner rather than later.) I don't understand why anyone (who doesn't need the money) would ever rationally do (a) over (b).
 

henrylbh

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I'm really confused why:

(a) Start CPF LIFE payouts at age 65, then take the monthly payouts to top up the Retirement Account;

would be financially better than

(b) Defer CPF LIFE payouts until age 70, then (if desired) take those deferred/higher monthly payouts and plow them into the Retirement Account.

What's the point of (a) if you don't need the money? (Not JL's father, who evidently does need the money sooner rather than later.) I don't understand why anyone (who doesn't need the money) would ever rationally do (a) over (b).

JL only giving one reason why one would want to start earlier payout. But that may not be the actual reason why he thinks his uncle should start earliest possible.
 

dork32

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I'm really confused why:

(a) Start CPF LIFE payouts at age 65, then take the monthly payouts to top up the Retirement Account;

would be financially better than

(b) Defer CPF LIFE payouts until age 70, then (if desired) take those deferred/higher monthly payouts and plow them into the Retirement Account.

What's the point of (a) if you don't need the money? (Not JL's father, who evidently does need the money sooner rather than later.) I don't understand why anyone (who doesn't need the money) would ever rationally do (a) over (b).

dont need money at 65 does not mean dont need money at 69. at 65, can you predict that you are not going to need money at 69. if suddenly you need this money, you will realize that all you money is stuck inside cpf life.

but if you have started your payout at 65 and plow them back into cpf, you would realize that you would have a tens of thousand in your liquid cpf account. you can activate this amount at 69 if you need it.
 

BBCWatcher

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but if you have started your payout at 65 and plow them back into cpf, you would realize that you would have a tens of thousand in your liquid cpf account. you can activate this amount at 69 if you need it.
No, this isn't actually an option. It'd be lovely, but no. RA top-ups can only come out two ways (at least for CPF LIFE participants): as CPF LIFE payouts, or together with your pine box (i.e. a bequest at death, if there's a residual).

I've provided the link where CPF explains all this, quite clearly. If somebody finds something else, OK, post the link!

It is possible to do an "all three" top up, but a portion of those funds goes into MA, which is quite restricted.

"Need the money" includes needing an emergency reserve fund (or a bigger one). But if you don't need the money...why? It's a true mystery.
 

JuniorLion

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No, this isn't actually an option. It'd be lovely, but no. RA top-ups can only come out two ways (at least for CPF LIFE participants): as CPF LIFE payouts, or together with your pine box (i.e. a bequest at death, if there's a residual).

I've provided the link where CPF explains all this, quite clearly. If somebody finds something else, OK, post the link!

It is possible to do an "all three" top up, but a portion of those funds goes into MA, which is quite restricted.

"Need the money" includes needing an emergency reserve fund (or a bigger one). But if you don't need the money...why? It's a true mystery.

Based on your repeated points, could I say that if there's an option to defer CPF pay-out to 85 years old (and with 7% increase per year), then your personal opinion is that this is always the best choice to do so?

Assuming the person already has emergency funds of 24 months.
 

BBCWatcher

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Based on your repeated points, could I say that if there's an option to defer CPF pay-out to 85 years old (and with 7% increase per year), then your personal opinion is that this is always the best choice to do so?
Sure, why not? If you don't need/want that money, you don't need/want that money. The funds are growing nicely, the payor is Singapore's most reliable (and one of the world's most reliable), and the funds are incredibly well protected (from creditors and court judgments, too). "Let them ride."

That's exactly what some well-to-do CPF members used to do, but fairly recently the government limited that bit of generosity and now requires payouts to commence no later than age 70. Some clever nominated heirs also used to let their bequests stay parked at CPF, continuing to earn excellent well above market interest. But that bit of generosity has also been limited recently. Such financial behaviors are perfectly rational and sensible, and those were great "hacks" while they lasted.

The basic concept here is "satiation." Is this an unknown concept around these parts? I don't think so.
 

henrylbh

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That's exactly what some well-to-do CPF members used to do, but fairly recently the government limited that bit of generosity and now requires payouts to commence no later than age 70. Some clever nominated heirs also used to let their bequests stay parked at CPF, continuing to earn excellent well above market interest. But that bit of generosity has also been limited recently. Such financial behaviors are perfectly rational and sensible, and those were great "hacks" while they lasted.

'some well-to-do CPF members used to do' or intend to do? The first batch (born in 1958) under mandatory CPF Life has not even reached PEA in 2023.

And there is nothing clever about enhanced nomination scheme, though it may serve the purpose of 'some' members, and they do so not for the sake of higher interest rates.
 

JuniorLion

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Sure, why not? If you don't need/want that money, you don't need/want that money. The funds are growing nicely, the payor is Singapore's most reliable (and one of the world's most reliable), and the funds are incredibly well protected (from creditors and court judgments, too). "Let them ride."

That's exactly what some well-to-do CPF members used to do, but fairly recently the government limited that bit of generosity and now requires payouts to commence no later than age 70. Some clever nominated heirs also used to let their bequests stay parked at CPF, continuing to earn excellent well above market interest. But that bit of generosity has also been limited recently. Such financial behaviors are perfectly rational and sensible, and those were great "hacks" while they lasted.

The basic concept here is "satiation." Is this an unknown concept around these parts? I don't think so.

If one has a few billion, I guess the CPF monies is insignificant.
 

BBCWatcher

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If one has a few billion, I guess the CPF monies is insignificant.
No need to exaggerate.

Some Princeton researchers estimated the “happiness threshold” in the United States not too long ago, and according to their findings it was about US$75,000/year of income in that country. That is, once you get to that level of income an additional dollar of income didn’t make you any happier, on average. Sure, you could buy more things, but as far as happiness, that’s as far as it goes. If you’re going to be any happier, you have to find that greater happiness in other ways than more money.

Some people have figured this out. It’s a concept of “satiation.” I believe I’ve reached that point, and I’m quite fortunate that way. But there are many such people. (“Cowboy millionaires” have, by and large.)

So, what are you going to do with this CPF money if you don’t need it and if it doesn’t bring you any more happiness? If it’s safe and protected, growing very nicely, and could benefit an heir or charitable cause you care about, “let it ride.” Why not? It’s simple, and no, it doesn’t require billions. Not necessarily even one million.

But it’s a moot point anyway, because the government doesn’t allow you to postpone payouts past age 70. Other countries are often the same. [The U.S. has a maximum age of 70 for U.S. Social Security retirement benefit startup and age 70 1/2 for its Traditional 401(k)s and Traditional IRAs, to pick another example. Governments don’t like to keep great deals going “too long.”]
 
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