[CPF BRS] What happens when pass away at 80

[BBCWatcher]

The CPF Board is older than the independent nation of Singapore, actually. It sure seems irrational to me to trust the Government of Singapore to record and defend the title to your home, manage the currency (Singapore dollars), enforce contracts, regulate the banking system, and otherwise perform various tasks essential to your financial life....but then not to trust the same government to manage your foundational retirement savings and income.

I think you rationally evaluate the deal on offer, that's all. If you're trying to maximize yield certain for you and your heirs then, in all probability, the very worst nominal yield a CPF Retirement Account will generate is well above 3% (somewhere around 3.2 or 3.3% it looks like). Can you find anything else with such a generous yield on Singapore dollars with a AAA-rated government guarantee? Except for more limited offers within CPF itself (e.g. MediSave Account voluntary contributions to peg your MA at your Basic Healthcare Sum), no, you cannot. It's an excellent offer!

To be clear, nobody is recommending that you hold all your wealth in CPF, with the possible exception of individuals/households with modest levels of wealth. And that's a moot point anyway because even with moderate levels of wealth you're simply not allowed to park all your wealth in CPF -- the various caps prevent it. But there are some really, really nutty people -- "nutty" is a technical term -- who celebrate their 55th birthdays by pledging their properties, draining their Retirement Accounts as much as they can, then parking the "liberated" cash in a 0.3% interest bank account. Or whatever. That's...well, that's not smart, let's just put it that way.

 

[item2sell]

i used to have this mentality when i was younger. i really do not see how the cpf is going to help me then

now i am closer to 55. i also observed how much interest my cpf is earning every year and how close i am to taking the money. i am very much less negative towards cpf now.

also when my dad died, me and siblings got every cent out of his cpf. this again improved my view of cpf.

I am the opposite of you.

I used to trust CPF, and even paid in cash for my HDB, so that I no need to loan so much from my CPF. My biggest regret.

Shortly after, they started the Minimum sum of $80k. I have no say, I cannot say no.

Then comes the yearly inflation of Minimum sum.

And followed by CPF life.
Then the Careshield robbery.

I invest my CPF in stock, I don't care about losing. Not my money anyway. And who knows, when I don't care about the money, I end up with some profits from Stock investment.

I am 48. So, I prayed CPF don't scrap the BRS sht before I reach 55. I believe cash in hand is better than 10x cash in CPF

 

[item2sell]

The CPF Board is older than the independent nation of Singapore, actually. It sure seems irrational to me to trust the Government of Singapore to record and defend the title to your home, manage the currency (Singapore dollars), enforce contracts, regulate the banking system, and otherwise perform various tasks essential to your financial life....but then not to trust the same government to manage your foundational retirement savings and income.

I think you rationally evaluate the deal on offer, that's all. If you're trying to maximize yield certain for you and your heirs then, in all probability, the very worst nominal yield a CPF Retirement Account will generate is well above 3% (somewhere around 3.2 or 3.3% it looks like). Can you find anything else with such a generous yield on Singapore dollars with a AAA-rated government guarantee? Except for more limited offers within CPF itself (e.g. MediSave Account voluntary contributions to peg your MA at your Basic Healthcare Sum), no, you cannot. It's an excellent offer!

To be clear, nobody is recommending that you hold all your wealth in CPF, with the possible exception of individuals/households with modest levels of wealth. And that's a moot point anyway because even with moderate levels of wealth you're simply not allowed to park all your wealth in CPF -- the various caps prevent it. But there are some really, really nutty people -- "nutty" is a technical term -- who celebrate their 55th birthdays by pledging their properties, draining their Retirement Accounts as much as they can, then parking the "liberated" cash in a 0.3% interest bank account. Or whatever. That's...well, that's not smart, let's just put it that way.

You have a bias view, because you are not a Singapore citizen.

Your options are more. You can take whatever you can from CPF.

Local singaporeans do not have the luxury of choice.

 

[polyglob]

Do you notice you use many emotional words - trust, regret, robbery, pray, believe. Talking about money is better to leave emotions out as much as possible.

Anyways your money your choice. Or, in your own words, not your money, you don't have a choice.

I am the opposite of you.

I used to trust CPF, and even paid in cash for my HDB, so that I no need to loan so much from my CPF. My biggest regret.

Shortly after, they started the Minimum sum of $80k. I have no say, I cannot say no.

Then comes the yearly inflation of Minimum sum.

And followed by CPF life.
Then the Careshield robbery.

I invest my CPF in stock, I don't care about losing. Not my money anyway. And who knows, when I don't care about the money, I end up with some profits from Stock investment.

I am 48. So, I prayed CPF don't scrap the BRS sht before I reach 55. I believe cash in hand is better than 10x cash in CPF

 

[item2sell]

Do you notice you use many emotional words - trust, regret, robbery, pray, believe. Talking about money is better to leave emotions out as much as possible.

Anyways your money your choice. Or, in your own words, not your money, you don't have a choice.

Psychology analysis?

Yes, I hate CPF. I can almost reach ERS. BUT I HATE CPF.

 

[dork32]

You have a bias view, because you are not a Singapore citizen.

Your options are more. You can take whatever you can from CPF.

Local singaporeans do not have the luxury of choice.

i always have conflicting view with bbc.

but this time i tend to agree with him

do i invest stocks and bonds? do i have cash savings? do i have a second property? i do not need cpf at all.

cpf is defensive part of my portfolio. i think it is unlikely that it will go bankrupt.

 

[dork32]

I am the opposite of you.

I used to trust CPF, and even paid in cash for my HDB, so that I no need to loan so much from my CPF. My biggest regret.

Shortly after, they started the Minimum sum of $80k. I have no say, I cannot say no.

Then comes the yearly inflation of Minimum sum.

And followed by CPF life.
Then the Careshield robbery.

I invest my CPF in stock, I don't care about losing. Not my money anyway. And who knows, when I don't care about the money, I end up with some profits from Stock investment.

I am 48. So, I prayed CPF don't scrap the BRS sht before I reach 55. I believe cash in hand is better than 10x cash in CPF

you raised an important point.

it seems that the garmen is always changing the rules and shifting the goalpost. this is one danger.

with regards to min sum. i dont really care. i do have quite a lot of assets. i dont need to withdraw anything at 55. the min sum is still your money. you either spend it slowly when you aged, or you leave it for your kids. from what you said, i would presume you probably have as much for me, if not more.

i really hate it when they force us into insurance scheme like careshield, medishield and cpf life. these are all blunt tools. they are forcing many that do not really need it into it. but having said that, the advantages that cpf gave me out weighs these disadvantages.

it is good that you know that you may lose in stocks. with cpf, you never lose. at the very worst you break even. this is why it is very good for defense

Comparing CPF with cash in DBS bank, money in cpf oa is 50x better than money in dbs savings. the interest rate is 2.5% vs 0.05%. if you are going to invest your withdrawals from cpf, good. but if you are going to withdraw and put in dbs savings, you are just dumb. please note that oa and sa can be withdrawn anytime after 55.

 

[dork32]

your understanding of cpf is not there. it really shows when you post about the pledging your property.

that is why you are so negative against it.

 

[Atrina_Boy]

I am the opposite of you.

I used to trust CPF, and even paid in cash for my HDB, so that I no need to loan so much from my CPF. My biggest regret.

Shortly after, they started the Minimum sum of $80k. I have no say, I cannot say no.

Then comes the yearly inflation of Minimum sum.

And followed by CPF life.
Then the Careshield robbery.

I invest my CPF in stock, I don't care about losing. Not my money anyway. And who knows, when I don't care about the money, I end up with some profits from Stock investment.

I am 48. So, I prayed CPF don't scrap the BRS sht before I reach 55. I believe cash in hand is better than 10x cash in CPF

You do bring up some interesting facts.

 

[fr33d0m]

you raised an important point.

it seems that the garmen is always changing the rules and shifting the goalpost. this is one danger.

with regards to min sum. i dont really care. i do have quite a lot of assets. i dont need to withdraw anything at 55. the min sum is still your money. you either spend it slowly when you aged, or you leave it for your kids. from what you said, i would presume you probably have as much for me, if not more.

i really hate it when they force us into insurance scheme like careshield, medishield and cpf life. these are all blunt tools. they are forcing many that do not really need it into it. but having said that, the advantages that cpf gave me out weighs these disadvantages.

it is good that you know that you may lose in stocks. with cpf, you never lose. at the very worst you break even. this is why it is very good for defense

Comparing CPF with cash in DBS bank, money in cpf oa is 50x better than money in dbs savings. the interest rate is 2.5% vs 0.05%. if you are going to invest your withdrawals from cpf, good. but if you are going to withdraw and put in dbs savings, you are just dumb. please note that oa and sa can be withdrawn anytime after 55.

maybe the government should tax 10% of all assets at age of 55 to those want to opt out of CPF LIFE and bar them from ever requesting assistance from government.

 

[Value.Matrix]

I am the opposite of you.

I used to trust CPF, and even paid in cash for my HDB, so that I no need to loan so much from my CPF. My biggest regret.

Shortly after, they started the Minimum sum of $80k. I have no say, I cannot say no.

Then comes the yearly inflation of Minimum sum.

And followed by CPF life.
Then the Careshield robbery.

I invest my CPF in stock, I don't care about losing. Not my money anyway. And who knows, when I don't care about the money, I end up with some profits from Stock investment.

I am 48. So, I prayed CPF don't scrap the BRS sht before I reach 55. I believe cash in hand is better than 10x cash in CPF

Happy that you state your point of view factually (with some emotions of course), which is fantastic isn't it?

Even with limited control, there are somethings you can do, like pledging your property, doing SA shielding and OA

Getting BRS (which is not so fantastic vs can withdraw all compared to previous "promise" by the government.

This is helpful for everyone because everyone gets to know a plan that they can execute for themselves. This is WAY better than not knowing what, and how to do things, and having this framework helps people like you who wants out of this CPF thing right?

 

[BBCWatcher]

So let's suppose you're celebrating your 55th birthday today, you pledge your home, and you withdraw as much as you possibly can from your CPF Retirement Account because you hate CPF. Let's assume that's $93,000. Where would this $93,000 go, today?

 

[item2sell]

So let's suppose you're celebrating your 55th birthday today, you pledge your home, and you withdraw as much as you possibly can from your CPF Retirement Account because you hate CPF. Let's assume that's $93,000. Where would this $93,000 go, today?

Casino. Car. My wish. My life.

 

[dork32]

So let's suppose you're celebrating your 55th birthday today, you pledge your home, and you withdraw as much as you possibly can from your CPF Retirement Account because you hate CPF. Let's assume that's $93,000. Where would this $93,000 go, today?

i already said this

1. put in dbs saving. real stupid guy will do that.
2. put in investment that can give a better return, why not?
3. spend it away. i dont know how to convert the utility of using the money to dollars term

 

[dork32]

maybe the government should tax 10% of all assets at age of 55 to those want to opt out of CPF LIFE and bar them from ever requesting assistance from government.

garmen dont allow you to opt of cpf life unless you very cham

 

[BBCWatcher]

Casino. Car. My wish. My life.

Sure, but you can make your property pledge and withdraw that $93,000 -- or any portion thereof -- any time you wish before CPF LIFE payout start. In the meantime, that $93,000 of principal throws off 4.0% p.a. interest every whole calendar month that increases your lifetime monthly retirement income and/or residual to your nominee(s).

That's how it actually works, and nobody is disagreeing that you have this pledge/withdrawal choice available. But if there's no better choice available in a particular month from age 55, why would you make this particular choice then? It doesn't accomplish anything if a "protest" is the goal. Indeed, this government can borrow billions at ridiculously low rates -- even the 30 year bond is yielding below 1.30% as I write this -- and is probably thrilled when it doesn't have to pay as much of that juicy 4.0% interest. The only person that cares is you (and perhaps dependents and nominees). Heck, thanks for marginally strengthening the government's ability to pay lovely 4.0% interest to other CPF members if that's what you want to do.

There are all sorts of financial steps you could take, but most of them don't make any sense.

 

[dork32]

Even with limited control, there are somethings you can do, like pledging your property, doing SA shielding and OA

for someone that wants brs, shielding is a total waste of time

 

[BBCWatcher]

i already said this
1. put in dbs saving. real stupid guy will do that.

Let's just say that would not be wise.

2. put in investment that can give a better return, why not?

Sure, but who's reliably beating 4.0% (or ~3.3% if you want to look at it that way) with a time horizon from age 55? I keep an open mind, but I'd be sourcing that $93,000 elsewhere.

3. spend it away. i dont know how to convert the utility of using the money to dollars term

This is a decent answer.

Here's another decent answer:

4. Be philanthropic. Give the money to somebody else who really needs it and/or who can make a higher return investment (e.g. a high value university education). However, here too you ought to exhaust other sources of philanthropy that are less attractive. But I guess it's possible, e.g. you're a monk, live an extremely modest lifestyle in the monastery, and want to help charities. So you just cut everything down to the bare survival minimum and give away everything else.

However, even in philanthropy the recipient might prefer you to stand pat. In this case you can name a charity as your CPF nominee, and the charity might be really thrilled with 4.0% interest leading to an annuity, most of which you hand to the charity including any residual.

 

[dork32]

Sure, but you can make your property pledge and withdraw that $93,000 -- or any portion thereof -- any time you wish before CPF LIFE payout start. In the meantime, that $93,000 of principal throws off 4.0% p.a. interest every whole calendar month that increases your lifetime monthly retirement income and/or residual to your nominee(s).

That's how it actually works, and nobody is disagreeing that you have this pledge/withdrawal choice available. But if there's no better choice available in a particular month from age 55, why would you make this particular choice then? It doesn't accomplish anything if a "protest" is the goal. Indeed, this government can borrow billions at ridiculously low rates -- even the 30 year bond is yielding below 1.30% as I write this -- and is probably thrilled when it doesn't have to pay as much of that juicy 4.0% interest. The only person that cares is you (and perhaps dependents and nominees). Heck, thanks for marginally strengthening the government's ability to pay lovely 4.0% interest to other CPF members if that's what you want to do.

There are all sorts of financial steps you could take, but most of them don't make any sense.

i have one friend that has quite a big property loan. the lock in period is up and he dont want to reprice, refinance, though he can save quite a bit.

when we ask him why, his reply is "it is my money. i do what i like with it". he is absolutely right. and we stop talking about refinancing home loans with him

 

[BBCWatcher]

for someone that wants brs, shielding is a total waste of time

I don't understand this comment.