FRS vs ERS

[happylor]

Thank You Kelhot enlightened me on this. The first thought when I looking at the Cumulative Figure in LIF Estimator it is bigger than what FRS sum, I thought is fair.

When you pointed me to look at the Bequest Figure, YOU ARE RIGHT! The Right Choice is go for BASIC PAYOUT.

For FRS 181K , at 81:

Standard Bequest :ZERO Cumulative Payout: 276,955 - 306,484 Mthly Payout:1,435-1,588
Basic Bequest :139,577-148,082 Cumulative Payout: 252,058 - 279,464 Mthly Payout:1,306 - 1,448

 

[henrylbh]

Thank You Kelhot enlightened me on this. The first thought when I looking at the Cumulative Figure in LIF Estimator it is bigger than what FRS sum, I thought is fair.

When you pointed me to look at the Bequest Figure, YOU ARE RIGHT! The Right Choice is go for BASIC PAYOUT.

For FRS 181K , at 81:

Standard Bequest :ZERO Cumulative Payout: 276,955 - 306,484 Mthly Payout:1,435-1,588
Basic Bequest :139,577-148,082 Cumulative Payout: 252,058 - 279,464 Mthly Payout:1,306 - 1,448

Very right choice if you think he will go around 81

 

[happylor]

I’ll repeat. There are only three things to do now:

1. If anybody qualifies for tax relief (your uncle or one of his immediate family members), make a $7,000 top up to his Special Account for the tax relief. That’ll bring his total SA deposits to date to $60,000+$17,370+$7,000=$84,370.

2. Repay $91,630 of OA dollars used for housing into his OA. How did I get that number? That’s equal to the current (2019) Full Retirement Sum of $176,000 minus $84,370 (his total SA deposits to date, including the $7,000 for tax relief). He should be able to check this number right now, online in his CPF account — or stop by a CPF customer service office and ask “What’s the maximum top up amount I can make to my Special Account now?” He should see $98,630 right now if the numbers you’ve reported are accurate. (The $7,000 top up for tax relief in Step #1 reduces that to $91,630.)

3. He transfers those $91,630 OA dollars into his SA.

That’s it for now! Everything else can and probably should wait until a month or two before his 55th birthday. Unless he’s sitting on a pile of cash that’s earning less than 2.5% interest, in which case OA at 2.5% is mighty attractive to a 54 year old. So he can repay more than the figure in step #2 if he wishes, if he’s just got lots of cash rotting in a bank account at low interest.

What these steps accomplish is to max out the deposits he’s allowed to make to his SA, and that SA is earning 4%, starting from April 1, 2019, if he gets these steps done and credited this month (March, 2019). That sets him up very well indeed for early next year’s maneuvers. We then have the next 9 months or so to discuss those maneuvers, plenty of time.

OK, would inform him to do so as guided.

I was thinking help him to get more SA (By pay back the OA withdrawed for HDB > Then transfer to SA > Then park them at those Lion Trust. (As he is not good in investment, only work hard to earn money)

May be I am thinking too simple : Phase one Sheild 136K of his SA out , another 136K in Phase two before turn 55. By 55, after RA creation, sell all those Lion Unit Trust > would return 308,300 to his SA earning 4% (Phase 1: 136K + Phase 2: 136K + 36,300 from the maturity of (B) NTUC SA Investment).

Sorry for getting all confusion, as I am also learning. Many Thanks

 

[kelhot2001]

Thank You Kelhot enlightened me on this. The first thought when I looking at the Cumulative Figure in LIF Estimator it is bigger than what FRS sum, I thought is fair.

When you pointed me to look at the Bequest Figure, YOU ARE RIGHT! The Right Choice is go for BASIC PAYOUT.

For FRS 181K , at 81:

Standard Bequest :ZERO Cumulative Payout: 276,955 - 306,484 Mthly Payout:1,435-1,588
Basic Bequest :139,577-148,082 Cumulative Payout: 252,058 - 279,464 Mthly Payout:1,306 - 1,448

One thing about CPF site, they always shows you your BRS$90.5, FRS$181k, ERS$271k at 55 years of age

But they did not show at age 65, your estimate RA amount shld be at BRS$139k, FRS$275k,ERS$413,000.00

Another thing about topping up, nothing is mention about non withdrawal at 55 when at BRS,until you read in depth on FAQ.

Lastly, for it to be worthwhile, i will curSe myself to quickly pass on before age 90, because that is when std and esc plan will be a better plan at this age

 

[kelhot2001]

Very right choice if you think he will go around 81

No 1, I smoker, 2 drinker, 3 late sleeper, and wake up early, sleep ard 6 hr per day. This is critera for dying before 81

 

[BBCWatcher]

It’s very easy to determine how much your uncle can still put into his Special Account. That information is available in his online CPF account. It’s available in a couple places, as I recall. He should look in “Messages” and, if it’s not there, he should go into e-Cashier and “pretend” to make a Special Account top up. There should be some number displayed, or there should be a button of some kind that lets him look up that number. If your reported numbers are correct, then the figure should be about $98,XXX.

It’d be nice to put more than the Full Retirement Sum into a Special Account using top ups and/or transfers, but unfortunately that’s not allowed. So all he ought to do at this point in time is make sure his SA is pushed as high as it’ll go (to the FRS, which is the limit for SA top ups and/or OA to SA transfers).

How do some people end up with SA balances well above the FRS? Interest, compulsory contributions, and sometimes voluntary “all three account” top ups.

....Well, OK, as I mentioned if he has more dollars languishing in a bank account and getting 0.1% interest (for example), it’s not smart for a 54 year old to keep them there. (Not smart for anybody, really.) He’s certainly free to repay as much as every dime (plus accrued interest) of OA that he used for housing, and those repaid dollars will start earning 2.5% if they sits in his OA. And 2.5% sure beats 0.1%....

....But the 4% dollars are the priority. At least those, and now would be nice.

 

[henrylbh]

No 1, I smoker, 2 drinker, 3 late sleeper, and wake up early, sleep ard 6 hr per day. This is critera for dying before 81

Besides above, more salt, more sugar, more oil etc to my food and beverages and only exercise on keyboard

 

[kelhot2001]

Besides above, more salt, more sugar, more oil etc to my food and beverages and only exercise on keyboard

Add on, mental stress, wife nagging

 

[tangent314]

What he need to do later in PHASE 2 before turn 55 is:
1. Once NTUC (B) Maturity back to SA during Feb, Immediately use it to get more Global All Seasons Fund – Standard via Peom

For this purpose the fund you use should be: Nikko AM Shenton Short Term Bond Fund (S$)

 

[lifeafter41]

One thing about CPF site, they always shows you your BRS$90.5, FRS$181k, ERS$271k at 55 years of age

But they did not show at age 65, your estimate RA amount shld be at BRS$139k, FRS$275k,ERS$413,000.00

Another thing about topping up, nothing is mention about non withdrawal at 55 when at BRS,until you read in depth on FAQ.

Lastly, for it to be worthwhile, i will curSe myself to quickly pass on before age 90, because that is when std and esc plan will be a better plan at this age

Can one decide on going for BRS at 65, after going for ERS at age 55, and withdraw the amount less BRS.

And what would be the amount if ERS at 413k at age 65 to be able to withdraw?

 

[kelhot2001]

Can one decide on going for BRS at 65, after going for ERS at age 55, and withdraw the amount less BRS.

And what would be the amount if ERS at 413k at age 65 to be able to withdraw?

No, whatever you topup using cash for ERS at 55, when you backtrack at 65, your cash will remain in the RA together with the interest accured if you choose BRS.

 

[maple96]

By 54 Birthday:
OA 72,800 (From C) + another NTUC (A) 67,400 [Mature 2 week after his 55 birthday]
SA 40,000
MA 31,000
Withdrawal for properties (OA:20,868 + SA:17,502+3,186 Interest)
>>> This would sufficient for FRS 181K
>>> In fact, he may Top up his OA Withdrawal for properties (OA:20,868 + SA:17,502+3,186 Interest), then transfer this excess amount to Top Up his spouse CPF for her to have better retirement payout?[/COLOR][/COLOR]

By 55 Birthday :
OA ZERO (Transferred to RA)
SA 308.3 K (Sell off all his Lion Global All Season Fund, back to SA). ***
MA 31,000
RA 181,000 >>FRS
*** Question: This SA would exceed the max 176K, he could transfer to her spouse SA?[/COLOR]
[/COLOR]

First, u need to understand why BBC suggest your uncle “shield” the SA monies (est 200k less 40k) about a few weeks before he turn 55 in 2020 = this is to leave him more monies in SA after 55 to earn 4% over the long term, instead of more monies in OA at 2.5%.

If he thinks he will need to withdraw the monies after 55 (for his other needs or to topup his wife's CPF), then dun waste time and money (there is potential loss of monies when he buy and later sell the unit trust, if suay suay then) "shielding the SA monies", plus lose his opportunity to topup more monies into CPF now!

There is no need to rush, work out your sums, understand the entire process, the risk/reward, (has anyone successfully tested the “shield”). How much spare cash he has now? Does he have enough monies to topup/refund all his OA monies used for housing, will he need to withdraw those monies for survival shortly after 55, how much spare cash he has to topup his wife's CPF as well, etc

Remember, should he need to withdraw monies from CPF after 55, it will be in this sequence = current interest in SA, current interest in OA, SA monies then OA monies.

(your calculations are incorrect, need to redo)

 

[maple96]

Can one decide on going for BRS at 65, after going for ERS at age 55, and withdraw the amount less BRS.

And what would be the amount if ERS at 413k at age 65 to be able to withdraw?

Yes u can still opt for BRS with property charge/property pledge at 65 but the amount u can withdraw is still FRS - BRS (excluding all topup monies, interest, etc)

 

[henrylbh]

Yes u can still opt for BRS with property charge/property pledge at 65 but the amount u can withdraw is still FRS - BRS (excluding all topup monies, interest, etc)

How nice if CPF allows me to top-up FRS of say 176k by 88k cash to ERS of 264k at 55. Then at 65 or anytime, allows me to withdraw that 88k (even without interest earned thereon) with sufficient property charge/pledge.

From what I understand, once you go for ERS or for any amount in excess of FRS, you cannot opt for BRS subsequently.

 

[maple96]

From what I understand, once you go for ERS or for any amount in excess of FRS, you cannot opt for BRS subsequently.

I wrote to CPFB last week on other matters and decided to add this question, they replied that's why I posted the answer!

 

[henrylbh]

I wrote to CPFB last week on other matters and decided to add this question, they replied that's why I posted the answer!

So I can park 88k cash in RA until song song, then take it out and reverting to FRS of 176k without property pledge/charge? That's dumb of CPF, even if interest thereon cannot be withdrawn

 

[maple96]

So I can park 88k cash in RA until song song, then take it out and reverting to FRS of 176k without property pledge/charge? That's dumb of CPF, even if interest thereon cannot be withdrawn

That's your view! U are still considered at ERS, ie cannot topup anymore unless ERS goes up and actually has property charge/pledge to withdraw the 88k.

What I posted was below:

Yes u can still opt for BRS with property charge/property pledge at 65 but the amount u can withdraw is still FRS - BRS (excluding all topup monies, interest, etc)

There is nothing in the CPF website that say u cannot, my query double confirmed

Disclaimer: I am not going for BRS

 

[maple96]

Happylor, just read your msg.

I need plenty of time to writeup to explain things to u, plus compute the figures, and offer alternatives/options for him to choose based on his current financials. Plus I need to find time to do it, so pls wait for it. No need to rush.

 

[alt2015]

Yes u can still opt for BRS with property charge/property pledge at 65 but the amount u can withdraw is still FRS - BRS (excluding all topup monies, interest, etc)

Left in RA =( frs-brs) +int + TOP up..... mean you will still get higher payout than just brs? Is it proportionately higher?

 

[maple96]

Happylor, just read your msg.

I need plenty of time to writeup to explain things to u, plus compute the figures, and offer alternatives/options for him to choose based on his current financials. Plus I need to find time to do it, so pls wait for it. No need to rush.

Happylor, pls check your pm