FRS vs ERS

[tidalstorm]

Not sure why do u need to do cash top up to oa

 

[ELKYme]

I also learned about SA shielding and many other great tips from this forum. Next time you can share with others too so that everybody can Huat together and be happy lor.

If your aunt had bought those plans using her OA/SA, upon maturity, the funds will go back to their respective accounts.

When you and your aunt talk to the insurance agent, take note, they have been trained to sell by lumping both the guaranteed and NON-GUARANTEED projections during their presentation to make their plans look attractive (also showing you past 5~10 years data to illustrate that the returns are attainable).

I’ve also bought a retirement plan as it’s a form of savings for retirement, that said, your aunt using her SA funds to purchase it may NOT be a good idea. It is highly UNLIKELY that the guaranteed payout of any insurance policy these days is anywhere near 4% PA.

As Singaporeans, shopping is our pastime, have attached a site so that you can compare retirement plans before committing:
https://www.interestguru.sg/2019-in...tirement-plans-in-singapore-with-high-income/

Thank you BB, Mapple96 and ELKYme !
As I am not familiar with these, my aunt was thinking using the SA money to by those similar to NTUC INCOME Harvest/Growth/Ideal Plan, where she safe/invest get 3.8%+ return plus Insurance coverage. She do have some of those plan purchase via her OA and SA, which maturity at her 55 too. [Those Cash Value go back to her OA and SA upon maturity? I need to help her check with her NTUC Income agent, also share with them how much to Topup their SA before 55].

Thank you for all who share and contribute in this discussion. I guess we should start in a SEPARATE Heading to benefit more not financial savvy senior. [I just saw POSB CNY Promotion at the bank, promote 8.8% FD..... many retiree holding their bank book q for it..... In fact, need more people like you all....]

 

[Guojing88]

Ì guess if more and more Singaporeans do this SA shielding trick, then the MPs would have more incentives to motion a change in the CPF Act in Parliament to allow people the choice of using OA first to fill up their RA, before using SA.

Then the rest of us can utilize this shield without going thru all these hula hoops

 

[maple96]

Ì guess if more and more Singaporeans do this SA shielding trick, then the MPs would have more incentives to motion a change in the CPF Act in Parliament to allow people the choice of using OA first to fill up their RA, before using SA.

Then the rest of us can utilize this shield without going thru all these hula hoops

It will most likely be the reverse, future cohort no more chance to "shield"

 

[Nofear40]

I also learned about SA shielding and many other great tips from this forum. Next time you can share with others too so that everybody can Huat together and be happy lor.

If your aunt had bought those plans using her OA/SA, upon maturity, the funds will go back to their respective accounts.

When you and your aunt talk to the insurance agent, take note, they have been trained to sell by lumping both the guaranteed and NON-GUARANTEED projections during their presentation to make their plans look attractive (also showing you past 5~10 years data to illustrate that the returns are attainable).

I’ve also bought a retirement plan as it’s a form of savings for retirement, that said, your aunt using her SA funds to purchase it may NOT be a good idea. It is highly UNLIKELY that the guaranteed payout of any insurance policy these days is anywhere near 4% PA.

As Singaporeans, shopping is our pastime, have attached a site so that you can compare retirement plans before committing:
https://www.interestguru.sg/2019-in...tirement-plans-in-singapore-with-high-income/

May I know which retirement plan have you bought?

 

[happylor]

Dear BB, Mapple96 , ELKYme and all experts!

I just got more in formations from my uncle:

He now have :
OA ZERO
SA 60,000
MA 31,000
Withdrawal for properties + Interest 293,556

He CPF also indicate that he used for Investment:
OA 80,113
SA 17,370
.... Which he use to purchase NTUC INCOME
GROWTH CV 67,400 Mature 3/2020 from OA
GROWTH CV 36,300 Mature 2/2020 from SA
HARVEST CV 72,800 Mature 3/2020 from OA

He and spouse is covered by Enhanced Incomeshield Preferred

At 54 now:
Shall he do these:
1. TOP UP 140K to his OA now, then request to transfer all his OA to SA
2. Then use all his SA 200k (Existing 60K + Top up 140K) to buy tbills

Then, at 54 this year he would have
OA ZERO
SA ZERO
MA 31,000
Withdrawal for properties + Interest 293,556

At 55 (During 2020):
He has ZERO transfer to RA, is it OK?
Question : Would CPF ask him to top up min?
Question : IF top Up, how to handle this money, can withdraw later?

>>> After RA created:
He would then sell off his tbills and liquidate his NTUC INCOME Policy

Then, at 55 next year after RA creation, he would have
OA 80,113 (+OA Invest in NTUC)
SA 217,370 (+SA invest in NTUC)
MA 31,000
Withdrawal for properties + Interest 293,556
RA ZERO

When CPF are about to deduct the premium for CPF life before 65:
He will opt for BRS, which he think his family history no one live > 95 .
>> By then he request CPF transfer his OA (80,113) + SA (7,887) to RA

At 65 he would have
OA ZERO
SA 209,483
MA 31,000
Withdrawal for properties + Interest 293,556
RA 88,000
+ Pledge his HDB to CPF

with this arrangement he wld have $730-$790 mthly payment frm 65 to 95
+ 4% interest on the SA (Which about 698/mthly)

Down the road, if he down size or sell his HDB, he still can withdraw whatever excess of the RA any moment , correct?

All EXPERTS: Is my understanding correct? or have better option?

Your guidance is greatly appreciated.

 

[kelhot2001]

Dear BB, Mapple96 , ELKYme and all experts!

I just got more in formations from my uncle:

He now have :
OA ZERO
SA 60,000
MA 31,000
Withdrawal for properties + Interest 293,556

He CPF also indicate that he used for Investment:
OA 80,113
SA 17,370
.... Which he use to purchase NTUC INCOME
GROWTH CV 67,400 Mature 3/2020 from OA
GROWTH CV 36,300 Mature 2/2020 from SA
HARVEST CV 72,800 Mature 3/2020 from OA

He and spouse is covered by Enhanced Incomeshield Preferred

At 54 now:
Shall he do these:
1. TOP UP 140K to his OA now, then request to transfer all his OA to SA
2. Then use all his SA 200k (Existing 60K + Top up 140K) to buy tbills

Then, at 54 this year he would have
OA ZERO
SA ZERO
MA 31,000
Withdrawal for properties + Interest 293,556

At 55 (During 2020):
He has ZERO transfer to RA, is it OK?
Question : Would CPF ask him to top up min?
Question : IF top Up, how to handle this money, can withdraw later?

>>> After RA created:
He would then sell off his tbills and liquidate his NTUC INCOME Policy

Then, at 55 next year after RA creation, he would have
OA 80,113 (+OA Invest in NTUC)
SA 217,370 (+SA invest in NTUC)
MA 31,000
Withdrawal for properties + Interest 293,556
RA ZERO

When CPF are about to deduct the premium for CPF life before 65:
He will opt for BRS, which he think his family history no one live > 95 .
>> By then he request CPF transfer his OA (80,113) + SA (7,887) to RA

At 65 he would have
OA ZERO
SA 209,483
MA 31,000
Withdrawal for properties + Interest 293,556
RA 88,000
+ Pledge his HDB to CPF

with this arrangement he wld have $730-$790 mthly payment frm 65 to 95
+ 4% interest on the SA (Which about 698/mthly)

Down the road, if he down size or sell his HDB, he still can withdraw whatever excess of the RA any moment , correct?

All EXPERTS: Is my understanding correct? or have better option?

Your guidance is greatly appreciated.

Nope, some flaw inside especially when u do BRS, before 55 topup, some topup may be lockup, after 55 topup for ers, cannot be withdraw. The expert can tell ypu more

 

[BBCWatcher]

At 54 now:

I’m assuming he’ll celebrate his 55th birthday before those NTUC Growth/Harvest plans mature. Please correct me if I’m wrong about that.

Shall he do these:
1. TOP UP 140K to his OA now, then request to transfer all his OA to SA

Almost. First of all, if he qualifies for tax relief when topping up his Special Account, or if somebody else would, then step one would be to make a $7,000 top up into his Special Account with tax relief.

We’ll get to the “correct” amount in a moment....

2. Then use all his SA 200k (Existing 60K + Top up 140K) to buy tbills

No, that’s not allowed: he has to leave at least $40,000 behind in his Special Account. Also, a t-bill doesn’t work too well for this. He’d instead pick one of the unit trusts that qualifes for the CPF Investment Scheme (Special Account), a Singapore dollar denominated bond unit trust purchased through a zero fee platform.

OK, what’s the “correct” amount. Well, the goal really ought to be to fund his Retirement Account to the Full Retirement Sum, which is $176,000 in 2019. So let’s assume he turns 55 in 2019 (later this year). He has to leave $40,000 behind in his Special Account, and he has a total of $77,370 on deposit in his Special Account (the $60,000 in cash plus the amount he used in the CPF Investment Scheme-Special Account).

So, if he has the cash available, this is what he ought to do:

(a) As mentioned, deposit $7,000 into his SA for tax relief. (Let’s assume somebody qualifies for that.) That takes him to $84,370 total SA contributions.

(b) Repay $91,360 worth of Ordinary Account funds that he used for housing into his Ordinary Account, then transfer that full amount to his Special Account. That’ll drive his SA up to the maximum $176,000 (2019 FRS).

(c) Repay another $136,000 worth of Ordinary Account funds that he used for housing into his Ordinary Account.

(d) Raise a “Special Account shield” shortly before his 55th birthday on all Special Account funds above the $40,000 that must remain.

(e) On his 55th birthday, his Retirement Account will be formed using the $40,000 of remaining SA funds plus $136,000 of Ordinary Account funds, pushing his RA up to the $176,000 Full Retirement Sum.

(f) The next day he can lower his SA shield and return the funds back from the unit trust into his SA.

That’s the best recipe here, I’d say. Then he’d end up with lots of RA funds ($176,000) and lots of Special Account funds, plus some OA funds when the NTUC plans mature and return those dollars in 2020.

When CPF are about to deduct the premium for CPF life before 65:
He will opt for BRS, which he think his family history no one live > 95 .

Age 95 is pretty good for past generations. I wouldn’t bet against 100+.

But he can do that if he wishes. The smart play here is to defer until age 70 since that’ll keep his 4+% RA interest accumulating. Just before age 70 he can make his property pledge for BRS-level CPF LIFE (or BRS-level plus $7K actually since I’ve recommended a top up for tax relief) and choose his preferred payout plan. Of course, if he’s fit as a fiddle at age 70, he might make another decision.

Down the road, if he down size or sell his HDB, he still can withdraw whatever excess of the RA any moment , correct?

Yes, as long as he maintains a property pledge (owner-occupied home). Remember he’ll also have gobs of SA and OA on account, too, withdrawable (in that order) in any amount, on demand, starting from age 55.

 

[henrylbh]

Dear BB, Mapple96 , ELKYme and all experts!

I just got more in formations from my uncle:

He now have :
OA ZERO
SA 60,000
MA 31,000
Withdrawal for properties + Interest 293,556

He CPF also indicate that he used for Investment:
OA 80,113
SA 17,370
.... Which he use to purchase NTUC INCOME
GROWTH CV 67,400 Mature 3/2020 from OA
GROWTH CV 36,300 Mature 2/2020 from SA
HARVEST CV 72,800 Mature 3/2020 from OA

He and spouse is covered by Enhanced Incomeshield Preferred

At 54 now:
Shall he do these:
1. TOP UP 140K to his OA now, then request to transfer all his OA to SA
2. Then use all his SA 200k (Existing 60K + Top up 140K) to buy tbills

Then, at 54 this year he would have
OA ZERO
SA ZERO
MA 31,000
Withdrawal for properties + Interest 293,556

He cannot top up OA directly with 140k.

Neither can he fully top up SA directly with 140k, as there is a current limit of 176k.

But he can refund 140k to reduce the amount used for housing. Then transfer that amount to SA subject to current limit of 176k or 181k next year.

If he decides to top up SA directly, there will be restriction on investment and pledging of property for BRS.

At 55 (During 2020):
He has ZERO transfer to RA, is it OK?
Question : Would CPF ask him to top up min?
Question : IF top Up, how to handle this money, can withdraw later?

He cannot invest all of OA and or all of SA money as there is limit on amount that can be used. Hence, OA and SA can never be zero, if he top up OA/SA.

[When CPF are about to deduct the premium for CPF life before 65:
He will opt for BRS, which he think his family history no one live > 95 .
>> By then he request CPF transfer his OA (80,113) + SA (7,887) to RA

Anytime from 55, he can opt for BRS with sufficient property pledge.

Annuity premium will only be deducted when he decides to commence payout anytime between 65 and 70.

At 65 he would have
OA ZERO
SA 209,483
MA 31,000
Withdrawal for properties + Interest 293,556
RA 88,000
+ Pledge his HDB to CPF

with this arrangement he wld have $730-$790 mthly payment frm 65 to 95
+ 4% interest on the SA (Which about 698/mthly)

You need to recalculate the above numbers

Down the road, if he down size or sell his HDB, he still can withdraw whatever excess of the RA any moment , correct?

Whatever in RA cannot be withdrawn except for the amount allowed at 65 and amount allowed for property pledge from 55.

 

[maple96]

Dear BB, Mapple96 , ELKYme and all experts!

I just got more in formations from my uncle:


All EXPERTS: Is my understanding correct? or have better option?

Your guidance is greatly appreciated.

Firstly, u have not provided the most crucial piece of info (ie birthdate) and other info so we can explore the options available to him:

1. When will he turn 55 in 2020? Is it after Feb/Mar 2020?
2. Which CPF Life Plan will he be choosing? Basic, Standard or Escalating?
3. He now has property charge, ok. U already checked and confirmed he can do a property pledge if required until 65 and after 70? (see requirements/criteria for property pledge at CPF website)
4. He wants BRS only, not FRS or ERS to join CPF LIfe?

Secondly, u have to get the current CPF rules right! Uncle Henry had shown u some of the correct CPF rules, below some other correct CPF rules.

1. From Jan 2020, FRS = 181k, BRS = 90,5k
2. If he does not have sufficient property charge (now he has), he can pledge his property if it continues to meet the CPF property pledge requirements and has monies in his RA. Yes, even after he join CPF Life and started payout, but he has to opt for CPF Life Basic Plan and still has monies in RA. If he opt for CPF Standard or Escalating Plan anytime after 65, he no longer can opt for BRS with property pledge.
3. With property charge/property pledge, if he subsequently sell/transfer his pledged property, monies will be refunded to topup his RA “back to FRS”, then he can withdraw the rest if refunded to OA (if property charge). If he decides to buy another property, CPFB will need to see if he has sufficient monies in RA for pledging if he wants to use RA monies. U can read he rules and examples in CPF website for more details.

After u provide more info on item 1 above, we will explore the options available to him based on the correct CPF rules.

 

[BBCWatcher]

He cannot top up OA directly with 140k.

Yes he can, in the colloquial sense. He has used a lot of OA dollars for housing, and he can repay those dollars directly into his OA. There’s plenty of room there.

I know you understand this point, but let’s not get too hung up on “top up” versus “repay” here. The point is that this uncle can put dollars directly into his OA, a lot of them.

Neither can he fully top up SA directly with 140k, as there is a current limit of 176k.

Right. I calculated the figure in my reply, but it’s better in this case to repay OA then make an OA to SA transfer. (Except for one $7K SA top up for tax relief, if applicable.)

2. Which CPF Life Plan will he be choosing? Basic, Standard or Escalating?

This question doesn’t really matter at this point in time. This particular decision can be made as late as just before this uncle’s 70th birthday, so no rush.

I don’t think it’s necessary to explore this particular corner of CPF yet for an uncle who’s age 54. Not in detail anyway, especially since the rules might change over the next 10+ years.

 

[maple96]

This question doesn’t really matter at this point in time. This particular decision can be made as late as just before this uncle’s 70th birthday, so no rush.

I don’t think it’s necessary to explore this particular corner of CPF yet for an uncle who’s age 54. Not in detail anyway, especially since the rules might change over the next 10+ years.

A dunno or not sure is still an answer, I just want him to confirm his thought process, Basic, Standard or Escalating? With any answer, we can still explore various options, u dun think necessary but I think is necessary based on his last question and based on what I am going to suggest to him to explore. Be patient.

 

[kelhot2001]

Points to note for ERS (let me know if I am wrong on the rules)

1) Monies top-up for ERS at 55, at then 65 if you choose to do only BRS, monies topup and interest earn are not refundable.

2) Some examples for BRS withdrawal from CPFB
https://www.cpf.gov.sg/askjamie/user/uploads/Attachment%201.pdf
Especially those without enough CPF saving for the BRS minimum sum

3) Life expectancy is by government average of 85, man stand at 80 only. Do your own life expectancy test (google around life expectancy calculators). They do in depth analysis like your insurance will ask, smoker ?diabetes ? High Blood? Any close family with hereditary disease? You will realize your expectancy may not be as high as you think.

4) Lastly, a lot of topup RSTU, are not refundable if your saving in CPF life cannot reach FSR, so note on this. It means when one day at age 70, you need some urgent money, you cannot take it out from CPF life.
But on the other hand, if you are like me, impulsive spender, then it might be a good idea to keep it inside.

 

[BBCWatcher]

Kelhot2001, you're more or less in "poverty mode thinking" with respect to CPF, a common affliction it seems. That doesn't seem like that's happylor's uncle's situation, although happylor can clarify if need be.

As it happens, happylor's uncle -- if he has some cash available -- has the opportunity to end up with hundreds of thousands of dollars in CPF earning 4% with most of those dollars available for on demand withdrawal in any increment. There ain't nothing wrong with that!

 

[kelhot2001]

Kelhot2001, you're more or less in "poverty mode thinking" with respect to CPF, a common affliction it seems. That doesn't seem like that's happylor's uncle's situation, although happylor can clarify if need be.

As it happens, happylor's uncle -- if he has some cash available -- has the opportunity to end up with hundreds of thousands of dollars in CPF earning 4% with most of those dollars available for on demand withdrawal in any increment. There ain't nothing wrong with that!

Definitely nothing wrong with that. I do encourage it if you have spare cash lying around. Even so, as you mention before, anything can goes south if future, and when you really need, you need it.

I just add that whatever goes into CPF, it is difficult to utilize it in a lump sum when need, whereas in external investment, you can liquidate or loan from it when you need it. Probably , you lose out the interest earn by 2 percent, but in return, you get the flexibility.

Example like stock market crashes (happened every now and then) I seen friend who double their earning in that instances, another one invest $100K, and see return almost to 8x in a matter of 6-7 years, (a lot people will doubt it, but it does happen, definitely not to me lol)

So it is for people to take note only.

 

[happylor]

Thank You all Experts sharing your knowledge and helping hand.

In Fact, i did asked my uncle is he ok that I published his figure. He is also hope to share some REAL example where, many of his friends also BLURR BLURR now.. He hope this would help more people who is reaching 55 next year, with all the Expert Guidance

Maple96/BBC & all EXPERTS:

• My uncle 55 Birdthday is on MARCH 2020.

• Yes, those NTUC Investment mature after his birthday same month (But he told me the NTUC Agent told him to hold 2-3 years longer for even higher CV cash value)

• Now his NTUC agent got to know these, also trying to convince him getting NTUC Asian income fund, with interest rate of 5.25%. If invest on 100k, monthly distribution, likely to be 460+ with insurance coverage too..

• He has sufficient Cash, which sitting in bank for emergency, which he also old fashion CASH is king, can draw out for emergency. He is not those very good in investing in share and money, he just buy Blue Chip keep long and Unit Trust as long it help him generate money.

• The pure thinking of him skewed toward BRS, is that he think none of his family history live above 95. He is thinking BRS payout till 95 is sufficient, as many of his friends also told him, no point go for FRS/ERS which pay beyond 95. That is only govt hope to get more CPF Pool to support those live beyond 95.

• He also very worries , as he heard many friends told him, TOP UP Stuck in CPF, so asked me to check the step carefully

• He understand, even he go before 95, those money balance in RA, OA, SA would not vanished, but go to next of kin, he just mentioned, no need left too much for kids and just to lower their burden, BUT must have flexibility to draw EXCESS RA out like ATM when needed.

If follow BBC advice pay back his OA for Housing, does it mean that he need not Pledge his HDB and enjoy more payout?

P/S: He just opened his POEMS account, look look on the UOB United SGD Fund CL A (Acc)

Thank you all for your sharing and guidance. I also learned a lot

 

[maple96]

Thank You all Experts sharing your knowledge and helping hand.

In Fact, i did asked my uncle is he ok that I published his figure. He is also hope to share some REAL example where, many of his friends also BLURR BLURR now.. He hope this would help more people who is reaching 55 next year, with all the Expert Guidance

Maple96/BBC & all EXPERTS:

• My uncle 55 Birdthday is on MARCH 2020.

• Yes, those NTUC Investment mature after his birthday same month (But he told me the NTUC Agent told him to hold 2-3 years longer for even higher CV cash value)

• Now his NTUC agent got to know these, also trying to convince him getting NTUC Asian income fund, with interest rate of 5.25%. If invest on 100k, monthly distribution, likely to be 460+ with insurance coverage too..

• He has sufficient Cash, which sitting in bank for emergency, which he also old fashion CASH is king, can draw out for emergency. He is not those very good in investing in share and money, he just buy Blue Chip keep long and Unit Trust as long it help him generate money.

• The pure thinking of him skewed toward BRS, is that he think none of his family history live above 95. He is thinking BRS payout till 95 is sufficient, as many of his friends also told him, no point go for FRS/ERS which pay beyond 95. That is only govt hope to get more CPF Pool to support those live beyond 95.

• He also very worries , as he heard many friends told him, TOP UP Stuck in CPF, so asked me to check the step carefully

• He understand, even he go before 95, those money balance in RA, OA, SA would not vanished, but go to next of kin, he just mentioned, no need left too much for kids and just to lower their burden, BUT must have flexibility to draw EXCESS RA out like ATM when needed.

If follow BBC advice pay back his OA for Housing, does it mean that he need not Pledge his HDB and enjoy more payout?

P/S: He just opened his POEMS account, look look on the UOB United SGD Fund CL A (Acc)

Thank you all for your sharing and guidance. I also learned a lot

U still did not mention anything about CPF Life Plan choice, Basic, Standard or Escalating.

But based on what u explained about his thinking, I guess he would prefer CPF Life Basic Plan? Your explanations seems to be confuse about BRS/FRS/ERS with CPF Life Plan (Basic, standard and escalating), BRS/FRS/ERS determines payout levlels (ERS highest amt) while CPF Life Plan decision is dependent expected life span eg 95)

His SA ntuc endowment matures before his birthday, the other 2 maturing in Mar are OA. And there is a possibility he might apply for extension of maturity dates (if possible), I doubt what his agents claim can as contract is already signed. Pls confirm, for the time being I will take into account SA ntuc endowment which matures before his birthday.

Edit 19/3: as u looked very confused, I reserve further comments, suggestions offered by others should be enough for u to digest and unwind your confusion, goodluck.

 

[henrylbh]

At 54 now:
Shall he do these:
1. TOP UP 140K to his OA now, then request to transfer all his OA to SA

BBC answered the above not in his usual style

Almost. First of all, if he qualifies for tax relief when topping up his Special Account, or if somebody else would, then step one would be to make a $7,000 top up into his Special Account with tax relief.

I answered the above with some cautions.

He cannot top up OA directly with 140k.

Neither can he fully top up SA directly with 140k, as there is a current limit of 176k.

But he can refund 140k to reduce the amount used for housing. Then transfer that amount to SA subject to current limit of 176k or 181k next year.

If he decides to top up SA directly, there will be restriction on investment and pledging of property for BRS.

But it's seem BBC not happy with my answer and posted part of my comments with a twist and repeating in his words what I briefly mentioned.

He cannot top up OA directly with 140k.

Yes he can, in the colloquial sense. He has used a lot of OA dollars for housing, and he can repay those dollars directly into his OA. There’s plenty of room there.

I know you understand this point, but let’s not get too hung up on “top up” versus “repay” here. The point is that this uncle can put dollars directly into his OA, a lot of them.

Yes he can and have 'plenty of room' as he has 'lot of OA dollars for housing'. But that was not in the earlier answer.

'Too hung up'. Come on, it matters to him as he mentioned that immediately after top-up (and transfer), his father would still have withdrawal for properties + interest at 54 ... if you know what that means.

Then, at 54 this year he would have
OA ZERO
SA ZERO
MA 31,000
Withdrawal for properties + Interest 293,556

The above excludes amount lying outside SA in his illustration

Right. I calculated the figure in my reply, but it’s better in this case to repay OA then make an OA to SA transfer. (Except for one $7K SA top up for tax relief, if applicable.)

Where is the calculation in your reply?

 

[henrylbh]

The pure thinking of him skewed toward BRS, is that he think none of his family history live above 95. He is thinking BRS payout till 95 is sufficient, as many of his friends also told him, no point go for FRS/ERS which pay beyond 95. That is only govt hope to get more CPF Pool to support those live beyond 95.

He also very worries , as he heard many friends told him, TOP UP Stuck in CPF, so asked me to check the step carefully

He understand, even he go before 95, those money balance in RA, OA, SA would not vanished, but go to next of kin, he just mentioned, no need left too much for kids and just to lower their burden, BUT must have flexibility to draw EXCESS RA out like ATM when needed.

I tend to think you got wrong conception

Choosing BRS or FRS got nothing to do with whether he uplorry before or after 95, as they are used to pay for life according to balance amount in BRS or FRS at the time of commencing life payout, anytime between 65 and 70.

When he opts to commence life payout, he needs to choose 1 of 3 plans - SP, BP and EP and likely you are confused between BRS and BP.

As mentioned earlier, once money gets into RA, it cannot be withdrawn except for a sum allowed at age 65 and amount above BRS (excluding topping up ....) with sufficient property pledge provided ..... Only money left in SA, after meeting BRS/FRS, can be withdraw in any amount anytime.

 

[BBCWatcher]

So to net it out, the goal ought to be to fully fund his Retirement Account and to stuff as many dollars as possible into his Special Account. Because all of those dollars will earn 4+% interest, and that beats the pile of cash he's sitting on hugely. And all those dollars, except for the minimum BRS-level requirement (plus any SA/RA top ups) which is already a given/baked in, will be on demand funds.

You just can't beat any of that anywhere, and it's well worth doing -- a no brainer, really.