lifeafter41
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Will it make sense to take out the 90.5k (BRS with property pledge) and recycle it back to OA or leave it under FRS assuming 55 next year?
And how would you do that? Via repayment of OA dollars used for housing?Will it make sense to take out the 90.5k (BRS with property pledge) and recycle it back to OA....
Well, if you could do that, here's the comparison:....or leave it under FRS assuming 55 next year?
Will it make sense to take out the 90.5k (BRS with property pledge) and recycle it back to OA or leave it under FRS assuming 55 next year?
Firstly, you can't put all back in OA only and there is annual limit to put back.
I will leave it till ……….
And how would you do that? Via repayment of OA dollars used for housing?
Well, if you could do that, here's the comparison:
(a) OA is paying 2.5% interest. From age 55 you can withdraw those OA dollars on demand, although you must first withdraw any remaining 4% interest earning dollars from your Special Account in order to start withdrawing OA dollars. (There are some possible, only partially effective SA "shielding" techniques for such withdrawals.) OA dollars can be invested via the CPF Investment Scheme-OA if you wish.
(b) RA is paying 4% interest, much more than 2.5%. From age 55 until CPF LIFE payout start, which can be as late as age 70, you have the option to withdraw some number of dollars from your Retirement Account. (Exactly how many dollars primarily depends on whether you make a property pledge.) All remaining dollars then go into CPF LIFE, with your choice of three payout plans. You can start payouts as early as age 65, as late as age 70, or anytime in between. The more dollars (and accrued 4% interest, plus bonus interest) in your Retirement Account, the bigger your monthly payouts for life (and the bigger the residual to your CPF nominees if you should die at any age when there's still a residual for your payout plan).
I don't see any way that option (a) would ever make financial sense, at least not before age 65, under reasonable (and even quite unreasonable) assumptions. If you need to withdraw up to the Basic Retirement Sum from your Retirement Account, you're free to do that at any time before CPF LIFE payouts start, which can be as late as age 70. And that's assuming you haven't made any Retirement Sum Topping Up (RSTU) Scheme top ups, but that's the same assumption if you're able to withdraw up to $90,500 at age 55.
What are you thinking? Why would ever do that -- what goal(s) are you trying to achieve?
Plan is to put in back in via OA housing payback.
Take out from 4% account and put into 2.5% account?
If you can withdraw $90,500 from your newly formed Retirement Account on your 55th birthday, you can also withdraw $90,500 from your Retirement Account just before you start CPF LIFE payouts, which can be as late as (just before) your 70th birthday. All you need is a property pledge either way, when (not before) you want to withdraw. There's also an up to 20% withdrawal option, inclusive of the optional $5,000 withdrawal amount.More towards avoiding this.....
More towards minimizing the payment into CPF Life.
Ie 181k*0.2 is 36.2k
90.5k*0.2 is 18.1k
Assuming Basic plan.
If you can withdraw $90,500 from your newly formed Retirement Account on your 55th birthday, you can also withdraw $90,500 from your Retirement Account just before you start CPF LIFE payouts, which can be as late as (just before) your 70th birthday. All you need is a property pledge either way, when (not before) you want to withdraw. There's also an up to 20% withdrawal option, inclusive of the optional $5,000 withdrawal amount.
Second, the 20% earmarked for the CPF Lifelong Income Fund is the maximum, but it's not fixed. If you'd like to reduce that percentage then one way is simply to wait until age 70 to start CPF LIFE payouts. Another way is not to get (or to get) gender reassignment surgery, depending on your current gender. (The percentage is likely to be higher for women. For men it's unlikely to be 20%.) To my knowledge CPF hasn't published the current, precise details on how that percentage is calculated, but those seem like reasonable guesses.
So why do you want to give up 1.5 percentage points of lovely interest for at least 10 years, compounded annually, in order to slightly reduce the portion of your Retirement Account allocated to the CPF Lifelong Income Fund that you and/or your nominees will always get back at least without interest (as principal), and possibly more than that? That's a terrible trade financially.
Here's a better question: why wouldn't you double down on collecting even more of that juicy, lovely 4% interest -- topping up your Retirement Account above the Full Retirement Sum (as high as the Enhanced Retirement Sum) on your 55th birthday, if you can afford it? So what if a maximum of 20% of your Retirement Account is earmarked for the CPF Lifelong Income Fund just before you start CPF LIFE payouts (Basic Plan), an amount that will always come back to you and/or your CPF nominees at least as principal? Assume the worst case if you like ("lost," principal return only), and it's still a heck of a great deal from age 55 onward. Have you noticed what fixed deposit interest rates are? Singapore Savings Bond rates?
Do you still need some help calculating this, or do you get the point now? What you're proposing is a dreadful idea financially.
Where did you get this idea?
Took a quick look at the latest life tables. Probability of dying between 65 and 78 is about 20.8%
This is misleadingly incorrect. The life tables is averaged across all Singaporeans, so the figures are for an average Singaporean, not for a healthy Singaporean.
Provided u have a healthy lifestyle, your family history is long life, murphy's law dun catch u then u won the longetivity lottery!
What is so difficult to have a healthy lifestyle?
Have regular health screening.
Make sure those chronic conditions are well controlled.
And we leave the last bit to God.
The chance of you belong to the 80% group would be even higher.
Key is murphy's law, all others not important
Not true, and not cool.Merg91 said:Many gays must be the murphy's law believers like you. Multiple partners & unprotected.
BRS is the most worth it in the bequest, you lose out huge amount to bequest for ERS and FRS if you die between 65 to 78 iirc.
To my knowledge CPF hasn't published the current, precise details on how that percentage is calculated, but those seem like reasonable guesses.