CPF Easy Info Thread. :)

[BBCWatcher]

So the option isleave minimum amount in CPF on 65 and withdraw the rest as cash.

And at that point immediately hand all that withdrawn cash to your heirs if the CPF LIFE monthly Escalating Plan payout is sufficient to support your lifestyle for the rest of your life. (Whether you choose the Escalating Plan is a separate question, but I would in this hypothetical.) Yes, that’s one option.

You said you care about your heirs, right? There you go, that’s how you care for them: give them more money sooner.....

Unless you really don’t care about your heirs, and you’re just tossing in that fiction as misdirection. So which is it, honestly? Are you looking to maximize yield certain for yourself, yield for yourself, or take best care of your heirs (the biggest gifts soonest, and guaranteed) while still preserving your baseline lifestyle for the rest of your life? Which goal are you trying to achieve, honestly?

 

[crimsontactics]

Yes, because all my money is lock inside till I die.

Not all lah Bro homedriver...

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[kiasu_dmp]

Employer deducted excess CPF - what to do?

Hi,
My boss informed me on 31-Mar-2020 that I was being laid off, 31-Mar is the last day of service. He paid me March salary and deducted CPF correctly.

I got the notice pay and leave encashment as well. He deducted CPF on this as well (with no ceiling).

Is the employer right in deducting CPF for pay-in-lieu-of-notice-period and leave-encashment? What do I do now?

Appreciate if anyone with personal experience of such matters can advise me.

Regards,
Kiasu DMP

 

[crimsontactics]

Hi,
My boss informed me on 31-Mar-2020 that I was being laid off, 31-Mar is the last day of service. He paid me March salary and deducted CPF correctly.

I got the notice pay and leave encashment as well. He deducted CPF on this as well (with no ceiling).

Is the employer right in deducting CPF for pay-in-lieu-of-notice-period and leave-encashment? What do I do now?

Appreciate if anyone with personal experience of such matters can advise me.

Regards,
Kiasu DMP

Yes for leave encashment, no for notice pay.

https://www.mom.gov.sg/employment-practices/termination-of-employment/termination-with-notice

However, CPF contributions are not required for compensation in lieu of notice (notice pay).

https://www.cpf.gov.sg/employers/FAQ/employer-guides/hiring-employees/cpf-contributions-for-your-employees/FAQDetails?category=Hiring+Employees&group=CPF+Contributions+for+your+Employees&ajfaqid=2492966&folderid=11027


CPF contributions are payable on the cash payment given to an employee from the encashment of his leaves as the payment increases the wages of the employee.

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[tangent314]

Just to be clear, for the notice pay:

Employer contribution is not required
Employee contribution is required

So yes, part of your notice pay will go into your CPF account

 

[crimsontactics]

Just to be clear, for the notice pay:

Employer contribution is not required
Employee contribution is required

So yes, part of your notice pay will go into your CPF account

I think it is weird why employers don't have to pay CPF for notice pay when employees have to...

Like this the employee lugi leh, have lesser disposable cash when fired while not enjoying more CPF contributions...

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[8zaoyu]

COF life basic earn interest will be pass to my family. The only difference is monthly payout is lesser compare to other plan.

Choose CPF Life Basic Plan , perhaps on Escalating Plan, is more for the partner likely to have longer life upon the draw down of 65 or 70.
Choose CPF Life Standard Plan for the other partner. Upon his earlier Gone to Heaven date, he left behind not much for his partner to buy diapers and maid fees!

 

[dork32]

COF life basic earn interest will be pass to my family. The only difference is monthly payout is lesser compare to other plan.

perfect understanding.
pro : interest for family
con : lower payout
which is better? up to you to go and argue

 

[kiasu_dmp]

Employer deducted excess CPF - what to do?

Yes for leave encashment, no for notice pay.

However, CPF contributions are not required for compensation in lieu of notice (notice pay).

CPF contributions are payable on the cash payment given to an employee from the encashment of his leaves as the payment increases the wages of the employee.

Sent from Samsung SM-N960F using GAGT

What can I do to receive a refund of my money which is now trapped with CPF Board? I need the money badly - no job - and my ex-employer plays such games.

 

[intime]

What can I do to receive a refund of my money which is now trapped with CPF Board? I need the money badly - no job - and my ex-employer plays such games.

Go to your nearby SSO for help.
https://www.msf.gov.sg/dfcs/sso/default.aspx

 

[henrylbh]

Just to be clear, for the notice pay:

Employer contribution is not required
Employee contribution is required

So yes, part of your notice pay will go into your CPF account

Where you get info? The answers given before yours are clearer.

 

[henrylbh]

Hi,
My boss informed me on 31-Mar-2020 that I was being laid off, 31-Mar is the last day of service. He paid me March salary and deducted CPF correctly.

I got the notice pay and leave encashment as well. He deducted CPF on this as well (with no ceiling).

Is the employer right in deducting CPF for pay-in-lieu-of-notice-period and leave-encashment? What do I do now?

Appreciate if anyone with personal experience of such matters can advise me.

Regards,
Kiasu DMP

If you are informed on 31 Mar and not need to work from 1 Apr, the notice pay (or pay in-lieu of notice) is not subject to CPF. However, CPF is payable on the unconsumed leave.

But if your were given due notice on 31 Mar and you worked through Apr (assuming notice period is one month), then CPF is payable.

 

[homedriver]

And at that point immediately hand all that withdrawn cash to your heirs if the CPF LIFE monthly Escalating Plan payout is sufficient to support your lifestyle for the rest of your life. (Whether you choose the Escalating Plan is a separate question, but I would in this hypothetical.) Yes, that’s one option.

You said you care about your heirs, right? There you go, that’s how you care for them: give them more money sooner.....

Unless you really don’t care about your heirs, and you’re just tossing in that fiction as misdirection. So which is it, honestly? Are you looking to maximize yield certain for yourself, yield for yourself, or take best care of your heirs (the biggest gifts soonest, and guaranteed) while still preserving your baseline lifestyle for the rest of your life? Which goal are you trying to achieve, honestly?

Withdraw more cash at 65 is not means to pass to anyone. Is has the freedom to manage the money in case there is urgent needs. Because the remaining in the account will be permanently lock after 65.

 

[BBCWatcher]

Withdraw more cash at 65 is not means to pass to anyone.

Oh, why not? You claimed you care about your heirs and specifically from CPF assets. So why aren’t they getting this money on your 65th birthday? Or on your 55th birthday for that matter?

Is has the freedom to manage the money in case there is urgent needs.

You already have the requirement, now, to keep some ordinary bank account balance on hand. You should continue to do that...and immediately hand every additional dollar you withdraw from CPF to the heirs you claim to care about.

Because the remaining in the account will be permanently lock after 65.

No, that’s not correct. You must instruct CPF to start CPF LIFE payouts before your 70th birthday. CPF does not “lock” your Retirement Account before age 70 unless you tell CPF to do that. And, if you wish, before age 70 you can buy another life annuity and apply to CPF for a full withdrawal of your Retirement Account.

None of this is a problem if you care about your heirs, as you claimed. It’s a tremendous opportunity! So (again) why aren’t you planning to hand all surplus CPF dollars to your heirs just as soon as you’re allowed (age 55) since you care so much about your heirs? You’ll get a guaranteed retirement income for life, so you won’t be destitute. Your heirs enjoy your generosity much sooner, and your desired basic lifestyle is protected for the rest of your life, however long that lasts. You’re never a financial burden on your heirs, which would be a really shitty thing to do and to risk given how much you claim to care about your heirs. Right? What are we missing here?

Maybe we’re missing the fact you don’t actually care about your heirs, at least not as much as you claim to. So which is it? It isn’t at all complicated for a gift recipient: hand me the money now (or at least as soon as possible), in maximum quantities, and with no risk that you’re ever going to need any of it back because you’re destitute. Done, done, and done. Your heirs can rejoice. So...what’s the problem?

 

[buaytuckchek]

I am interested to see how the Matched Retirement Savings Scheme (MRSS) can be optimised.

Planned to perform $600 per year per parent while getting tax relief.

But the issue is how much would the CPF payout increase with this topup?

 

[homedriver]

Oh, why not? You claimed you care about your heirs and specifically from CPF assets. So why aren’t they getting this money on your 65th birthday? Or on your 55th birthday for that matter?


You already have the requirement, now, to keep some ordinary bank account balance on hand. You should continue to do that...and immediately hand every additional dollar you withdraw from CPF to the heirs you claim to care about.


No, that’s not correct. You must instruct CPF to start CPF LIFE payouts before your 70th birthday. CPF does not “lock” your Retirement Account before age 70 unless you tell CPF to do that. And, if you wish, before age 70 you can buy another life annuity and apply to CPF for a full withdrawal of your Retirement Account.

None of this is a problem if you care about your heirs, as you claimed. It’s a tremendous opportunity! So (again) why aren’t you planning to hand all surplus CPF dollars to your heirs just as soon as you’re allowed (age 55) since you care so much about your heirs? You’ll get a guaranteed retirement income for life, so you won’t be destitute. Your heirs enjoy your generosity much sooner, and your desired basic lifestyle is protected for the rest of your life, however long that lasts. You’re never a financial burden on your heirs, which would be a really shitty thing to do and to risk given how much you claim to care about your heirs. Right? What are we missing here?

Maybe we’re missing the fact you don’t actually care about your heirs, at least not as much as you claim to. So which is it? It isn’t at all complicated for a gift recipient: hand me the money now (or at least as soon as possible), in maximum quantities, and with no risk that you’re ever going to need any of it back because you’re destitute. Done, done, and done. Your heirs can rejoice. So...what’s the problem?

First point i concern is the freedom to manage my money in cash. If before life plan kick in, I decide to keep minimum amount in cpf and withdraw the rest as cash. For example 100,000 cash. With this I’m more flexible to manage the money. In the case when need cash like 10,000 and so on, I can do that. Otherwise if this 100,000 is remain in cpf and lock by life plan. I’m do not have the flexibility to manage the money.

Then second point is about the life plan interest is in the pool or will pass to my family which already answered by dork32

 

[8zaoyu]

Oh, why not? You claimed you care about your heirs and specifically from CPF assets. So why aren’t they getting this money on your 65th birthday? Or on your 55th birthday for that matter?

Hey all, draw down from miscule amount of Basic, Full or Enhanced Retirement Account only for own ass only not for heirs. For heirs and extra partners , before the ABSD came about, should have bought them each an additional prpoerty!

 

[BBCWatcher]

First point i concern is the freedom to manage my money in cash.

So your previous claim that you were focused on the interests of your heirs was...not correct. It’s about you and your money. Right, OK then, I’m glad we finally arrived at the truth. So what goal(s) are you trying to accomplish for yourself?

I should point out up front that you will definitely not be allowed to transfer your risk of personal elder destitution onto taxpayers (like me) if your Retirement Account ends up reasonably funded and if you maintain a right of abode in Singapore. We, your fellow taxpayers (including your heirs), do not want and will not accept your chance of mismanaging your funds, screwing up, and having no retirement income. You must maintain a small amount of longevity insurance, whether from CPF LIFE or a suitable private life insurer. That part is nonnegotiable. However, after you have insured yourself against destitution (and thus defended taxpayers from having to bail you out), we can advise you about optimizing the rest.

Hey all, draw down from miscule amount of Basic, Full or Enhanced Retirement Account only for own ass only not for heirs.

Yes, it took far too long to arrive at the truth, but here we are, finally. You’re absolutely right that heirs want the most money, soonest, and with little or no chance of having to return anything to bail out a destitute giver. If we truly cared about heirs to the exclusion of other considerations, that’s the simple answer. Of course heirs could decide they’d like to keep their gift parked for a while, or buy a house as you suggest, or whatever, but that’d be solely their choice. “I care about my heirs but won’t give them anything now or anytime soon” certainly means you care about something else in addition to your heirs.

 

[a4973]

Steering the convo to CPF and HDB loan. I have previously read in a thread but can't find it now so am asking here. If we have hdb loan and have cash on hand to fully redeem the loan say 50k I vaguely remember that the most common advice was to not accelerate the repayment. May I know why not? Assume we are investment risk adverse. Thanks �

 

[BBCWatcher]

If we have hdb loan and have cash on hand to fully redeem the loan say 50k I vaguely remember that the most common advice was to not accelerate the repayment. May I know why not? Assume we are investment risk adverse.

First of all, you cannot borrow against a HDB leasehold, with the narrow exception of the HDB Lease Buyback Scheme. If you ever run out of cash due to cashflow problems, even by one dollar, then you must sell your HDB unit. Or try to rent out a room, but that may be awkward at best if your unit is fully occupied. Plonk down S$50K in accelerated repayment and you’re at least S$50K closer to a cashflow problem. (“At least” because that S$50K can earn interest.) Want to take that risk? The reason a mortgage borrower loses a home is because they cannot make a payment, not because they haven’t paid a mortgage faster. (HDB is a very forgiving, patient lender, though, that does everything possible to avoid that.)

Second, your payments are presently covered under the Home Protection Scheme. If one of the mortgage holders dies far too early, the HPS pays off that person’s share of the remaining mortgage. It’s a form of life insurance. Accelerate repayment of the mortgage then die too soon and you’ve effectively lost much or all of that S$50K. HPS would have taken care of it in the alternative.

Third, 2.6% money is still cheap money. A diligent saver and prudent, long-term investor should be able to do reliably better than that. One example: CPF Special Accounts are paying at least 4.0% interest, and 4.0% is definitely a bigger number than 2.6%.

Fourth, sub-2.0% mortgages are available from the private sector if you ever decide to refinance, i.e. even cheaper money is presently available.