Top up 7 k annually to special account to get tax rebate and compound at 4 % interest viable?

[OngHuatHuat]

Paiseh I forget the 10
Years window and the fact that your dad is already 69 years old. So cannot use the normal cpf life chart anymore.

He should start the payout now unless he intend to leave all the cpf to you.

He did not request for payout but we did ask the question at CPF, and they told us that its around $10xx p/m.

Since he's not on cpf life, the payouts are fixed for 20years, if i recall correctly.

 

[henrylbh]

My dad is not from CPF Life, he's Pioneer Generation. All Pioneer generation retirees can opt out of CPF Life, or to be more precise, they have to opt into CPFL if they wish.

He originally applied for delayed payout some years back as he didnt need the money.

He need not apply for delayed payout. All he need to do is do nothing.

He only need to apply if he wants to commence payout.

The later he commence payout, the higher will be the payout, provided he request for it. Else he will get payout calculated at the min sum based on his cohort.

 

[T H I N K]

My dad is 69 this year

Most of the money is sitting in RA, not SA.

Let me repeat that again: its mostly sitting in RA.

And since most of it was from the RSTU scheme, it cannot be withdrawn. And this was where we were completely blindsided. We were not aware tht the hurdle to cross is (BRS+rstu topups)

What this effectively means is: for those folks who do not have a lot of mandatory contributions, such as not working for a long time, think twice before using the RSTU scheme, because none of these topup funds can be withdrawn in lump sum.

Haha, at last, more info and almost whole story is out!

I have been highlighting to u, for your own sake, know where the money is sitting for your case and others. If in SA, the rules are different from when in RA. For your dad, of course all in RA lah!

Property pledge rules and withdrawal of 50% is new, CPF never cheat your family. Your family just do not understand or know that any topups into RA cannot be withdrawn as lumpsum and are reserved for retirement payouts only. Just happen to be unlucky to be caught by the new rules since he did no withdraw earlier. Then your family must be thinking of exploiting the "potential loopholes" to topup his RA with cash (enjoy tax benefits) or from your CPF OA (for "early withdrawal), but got caught by the rules. So now your monies got stuck some how.

I was lucky as I wrote to CPF to confirm before even thinking of topping up RA to exploit "potential loopholes" for subsequent withdrawal

So is he under the old scheme, minimum sum scheme since he did not opt into CPF Life?

Start payout to get your money back and continue to topup to exploit this old scheme, learn from uncle Henry lor.

Uncle Henry can play "uncle henry game" or not?

 

[henrylbh]

He did not request for payout but we did ask the question at CPF, and they told us that its around $10xx p/m.

Since he's not on cpf life, the payouts are fixed for 20years, if i recall correctly.

If you know the parameters, it should not be difficult to estimate the monthly payouts based on what he has now or in the future to be paid out over the remaining period to age 82 unlike CPF Life which is not transparent.

If I were him, I rather do VC than TU. VC can withdraw without restriction, though amount in OA earns slightly lesser interest. But that also depends on whether he has hit the BHS.

 

[elnewbie]

How are the rules different in SA compared to RA ?

I don't see this stated anywhere in CPF website. All I see is that the rules are quite clear when using the RSTU scheme, regardless whether RA or SA.

Haha, at last, more info and almost whole story is out!

I have been highlighting to u, for your own sake, know where the money is sitting for your case and others. If in SA, the rules are different from when in RA. For your dad, of course all in RA lah!

Property pledge rules and withdrawal of 50% is new, CPF never cheat your family. Your family just do not understand or know that any topups into RA cannot be withdrawn as lumpsum and are reserved for retirement payouts only. Just happen to be unlucky to be caught by the new rules since he did no withdraw earlier. Then your family must be thinking of exploiting the "potential loopholes" to topup his RA with cash (enjoy tax benefits) or from your CPF OA (for "early withdrawal), but got caught by the rules. So now your monies got stuck some how.

So is he under the old scheme, minimum sum scheme since he did not opt into CPF Life?

Start payout to get your money back and continue to topup to exploit this old scheme, learn from uncle Henry lor.

Uncle Henry can play "uncle henry game" or not?

 

[OngHuatHuat]

Henry dad I think not start withdrawing yet.

If start payout already, the whole lump sum
Will be transferred to annuity and won't be able to top up or enjoy high interest rate already.

Haha, at last, more info and almost whole story is out!

I have been highlighting to u, for your own sake, know where the money is sitting for your case and others. If in SA, the rules are different from when in RA. For your dad, of course all in RA lah!

Property pledge rules and withdrawal of 50% is new, CPF never cheat your family. Your family just do not understand or know that any topups into RA cannot be withdrawn as lumpsum and are reserved for retirement payouts only. Just happen to be unlucky to be caught by the new rules since he did no withdraw earlier. Then your family must be thinking of exploiting the "potential loopholes" to topup his RA with cash (enjoy tax benefits) or from your CPF OA (for "early withdrawal), but got caught by the rules. So now your monies got stuck some how.

I was lucky as I wrote to CPF to confirm before even thinking of topping up RA to exploit "potential loopholes" for subsequent withdrawal

So is he under the old scheme, minimum sum scheme since he did not opt into CPF Life?

Start payout to get your money back and continue to topup to exploit this old scheme, learn from uncle Henry lor.

Uncle Henry can play "uncle henry game" or not?

 

[T H I N K]

Henry dad I think not start withdrawing yet.

If start payout already, the whole lump sum
Will be transferred to annuity and won't be able to top up or enjoy high interest rate already.

U must have missed "Uncle Henry CPF Game" thread!

He is making "lots of money" playing this game, wait for him to share here, or later I have time, I find and link the thread here

 

[henrylbh]

If start payout already, the whole lump sum
Will be transferred to annuity and won't be able to top up or enjoy high interest rate already.

Can still top up to ERS but no tax incentive.

But I not rich and don't pay tax. Remember, most of the time I am wearing a RM3.00 slippers. Bloody Giant in Sg selling SD5.00 for the same slippers.

 

[highsulphur]

Had 165k on Jan1st this year due to the accrued interest frm last year and followed by another 7k topup in January.

Is your dad under cpf life or the old minimum sum scheme? If it's the latter, he will get back his money eventually

 

[OngHuatHuat]

If live long long time, both will get back. Just that minimum sum gets it much faster due to higher payout.

Is your dad under cpf life or the old minimum sum scheme? If it's the latter, he will get back his money eventually

 

[highsulphur]

If live long long time, both will get back. Just that minimum sum gets it much faster due to higher payout.

Nope there's an important difference.

MSS you are certainly getting it back albeit could be in the form of bequest.

CPF LIFE - you have to live long enough to get back your money

One is a fixed deposit over 20 years. One is an annuity.

 

[OngHuatHuat]

Nope there's an important difference.

MSS you are certainly getting it back albeit could be in the form of bequest.

CPF LIFE - you have to live long enough to get back your money

One is a fixed deposit over 20 years. One is an annuity.

Both are annuity.
MSS compound at higher interest rate if I am not wrong.
Okay i din notice the bequest part.

 

[highsulphur]

Both are annuity.
MSS compound at higher interest rate if I am not wrong.

You are wrong.

I top up for my mum but only because she's on the MSS

 

[elnewbie]

Old scheme. We know he will eventually get back his money, just not the way he intended...

Is your dad under cpf life or the old minimum sum scheme? If it's the latter, he will get back his money eventually

 

[highsulphur]

Old scheme. We know he will eventually get back his money, just not the way he intended...

In that case see open a bit. You did benefit from the tax savings

 

[Squaredot]

Old scheme. We know he will eventually get back his money, just not the way he intended...

Old scheme is better. How I wish I can be in old scheme.

 

[henrylbh]

Old scheme is better. How I wish I can be in old scheme.

Old scheme you get back exactly what is yours and payout is transparent and can plan and calculate payout. Under Life someone MUST lose for another to gain.

 

[fitlies]

Silent reader on an interesting but super helpful thread here. Just a quick question:

Is it safe to assume that FRS/MS increases at 3% per annum, till the year that one is 55 years old?

Since SA is locked up (and based on a simplified assumption that OA is wiped out due to mortgage, education loan etc), can I then use my current SA amount and do a simple projection to see how much I'm lacking and/or would like to top up, based on how much I would like to withdraw in excess at age 55?

p.s. please disregard shifting of posts and other elements that's beyond our control here.

 

[OngHuatHuat]

I myself predict the frs to grow at max of 3 % given recnrtly low inflation rate in Singapore.
Unless inflation rate going up in the next few years, or else they cannot justify the increase of minimum sum over 3 % for the next review.

Yes, 3 % projection is valid for me.

Silent reader on an interesting but super helpful thread here. Just a quick question:

Is it safe to assume that FRS/MS increases at 3% per annum, till the year that one is 55 years old?

Since SA is locked up (and based on a simplified assumption that OA is wiped out due to mortgage, education loan etc), can I then use my current SA amount and do a simple projection to see how much I'm lacking and/or would like to top up, based on how much I would like to withdraw in excess at age 55?

p.s. please disregard shifting of posts and other elements that's beyond our control here.

 

[akwl88]

I myself predict the frs to grow at max of 3 % given recnrtly low inflation rate in Singapore.
Unless inflation rate going up in the next few years, or else they cannot justify the increase of minimum sum over 3 % for the next review.

Yes, 3 % projection is valid for me.

how old are you now?