Withdrawal from CPF at 55

[henrylbh]

Above in bold is what I want to know which mean before or close to age 55 I will double confirm with CPF again. I want to go for BRS definitely! I do a better job than CPF OA 2.5 last I check my cpf investment!

Can withdraw bit by bit whenever needed for spending. If certain to beat return on amount in excess of BRS, withdraw all at one go and go for higher return

 

[henrylbh]

Ok so that url is bluffing? Anyway when I reach close to age 55 I will definitely pay a visit to CPF branch to get it all sorted out. Thanks for sharing.

Close to 55 you should think of hecking SA.

 

[BBCWatcher]

Let me elaborate on my last post. Let's use some numbers as an example. Let's suppose your age 54.9 balances are as follows:

Special Account: $200,000
Ordinary Account: $100,000

And let's suppose you celebrate your 55th birthday next year when the Full Retirement Sum is about $205,800. (The exact figure will be revealed later this year, but we'll assume that figure.)

If you do nothing then on your 55th birthday the CPF Board will draw $200,000 from your SA and $5,800 from your OA to fund your RA to $205,800. You then have $94,200 available for withdrawal from your OA in any increment. If you only want to withdraw $56,238 over the next 10 years (for example) you'll have a LONG time before you even need to think about making a property pledge/charge.

You're allowed to withdraw up to $5,000 from your new Retirement Account if you wish, "no questions asked." You're allowed to increase that withdrawal to 20% from age 65, again "no questions asked." No property pledge/charge required.

Any time up to one month before CPF LIFE payouts start — which can be as late as age 70, the default — you can make a property pledge/charge if you ever wish to withdraw more than the $5K/20% from your Retirement Account. In the meantime all those dollars in your RA that you don't withdraw will earn at least 4.0% interest. Interest cannot be withdrawn as a lump sum, but your ability to withdraw principal remains up until about one month before CPF LIFE payouts start.

All clear?

 

[bluezzy]

You can withdraw a bit at a time. But you might not even need to make a property pledge/charge if you want to "withdraw a bit at a time." You may never reach the withdrawal threshold when a property pledge/charge would be required to withdraw more that what you wish to withdraw.

If I don't pledge my property, I will need to lock in the full FRS and have little excess funds left to finance my expenses between 55 and 65 haha. Actually should have enough la just that I am kiasu and would like to think I have more cash on hand (in case of any emergency)

If I lock in FRS, excess can also withdraw bit by bit right? And the excess can stay in SA n continue to earn interest of 4%?

 

[BBCWatcher]

If I don't pledge my property, I will need to lock in the full FRS and have little excess funds left to finance my expenses between 55 and 65 haha. Actually should have enough la just that I am kiasu and would like to think I have more cash on hand (in case of any emergency)

OK, but that's a bad reason to forego 4.0% interest. You should withdraw dollars when you actually need them. You shouldn't withdraw dollars that are earning attractive interest until you actually need them.

If I lock in FRS, excess can also withdraw bit by bit right? And the excess can stay in SA n continue to earn interest of 4%?

What I suggest you do is that you "shield" SA dollars...and let your RA get funded to the Full Retirement Sum. Then, when/if you want to withdraw from your Retirement Account specifically — and above the $5K/20% withdrawal options you already have — you make a property pledge/charge at that time. If you follow that recipe you'll maximize the number of dollars earning at least 4.0% interest and have as much liquidity as you can ever get from CPF.

If you feel comfortable giving an estimate of your age 54.9 OA and SA balances I may be able to provide a more specific recommendation.

 

[bluezzy]

Let me elaborate on my last post. Let's use some numbers as an example. Let's suppose your age 54.9 balances are as follows:

Special Account: $200,000
Ordinary Account: $100,000

And let's suppose you celebrate your 55th birthday next year when the Full Retirement Sum is about $205,800. (The exact figure will be revealed later this year, but we'll assume that figure.)

If you do nothing then on your 55th birthday the CPF Board will draw $200,000 from your SA and $5,800 from your OA to fund your RA to $205,800. You then have $94,200 available for withdrawal from your OA in any increment. If you only want to withdraw $56,238 over the next 10 years (for example) you'll have a LONG time before you even need to think about making a property pledge/charge.

You're allowed to withdraw up to $5,000 from your new Retirement Account if you wish, "no questions asked." You're allowed to increase that withdrawal to 20% from age 65, again "no questions asked." No property pledge/charge required.

Any time up to one month before CPF LIFE payouts start — which can be as late as age 70, the default — you can make a property pledge/charge if you ever wish to withdraw more than the $5K/20% from your Retirement Account. In the meantime all those dollars in your RA that you don't withdraw will earn at least 4.0% interest. Interest cannot be withdrawn as a lump sum, but your ability to withdraw principal remains up until about one month before CPF LIFE payouts start.

All clear?

But I thought need to decide on BRS or FRS at 55 leh

https://dollarsandsense.sg/heres-need-know-pledging-property-meet-cpf-full-retirement-sum-frs/

 

[sohguanh]

Close to 55 you should think of hecking SA.

Actually I thought of it but I already have cpf oa sa investment outside those of cpf so are already safe from from RA when it start to create. So diversify a bit. Some let govt work and give me some I own DIY best of both worlds!

 

[bluezzy]

This link helps to explain too

https://www.cpf.gov.sg/member/faq/r...ffkZ8Gc93x3Z_KoN0NpQnQUDPSVFI&mibextid=Zxz2cZ

 

[sohguanh]

This link helps to explain too

https://www.cpf.gov.sg/member/faq/r...ffkZ8Gc93x3Z_KoN0NpQnQUDPSVFI&mibextid=Zxz2cZ

Thanks for sharing. You withdraw if you can find lobang offer more than 4%. Next is to feed yourself don't starve to death this will depend how you eat and live.

Else I think put inside RA earn 4% is ok. For me I will withdraw same like you bit by bit to invest. I eat very little rice vermicelli with cabbage fishball will suffice for a meal. I eat to live basically.

 

[s0crates]

Correct me if I am wrong but opt for BRS is when you cannot meet FRS. So if you can meet FRS and want to go for BRS don't think it is allowed. CPF not stupid. Now for your case you can fulfill FRS but purposely opt for BRS or really cannot fulfill FRS?

Not true.

For those of you who are reaching 55 please consider the "hack" of investing your CPF OA and withdrawing/changing it into a cash investment with your CPF agent bank and cpf.

That way you withdraw 2.5% money without having to empty your SA first.

 

[BBCWatcher]

But I thought need to decide on BRS or FRS at 55 leh

Nope. The only deadline to make a lump sum withdrawal from your Retirement Account is about a month before CPF LIFE payouts start.

RA interest stays in RA then streams out via CPF LIFE monthly payouts. But your option to withdraw principal runs way past 55.

Once your RA reaches your age 55 FRS all remaining and future SA and OA dollars are available for withdrawal. No property pledge/charge required. Plus you have RA withdrawal options: a smaller withdrawal without a property pledge/charge, a bigger one with.

Keep in mind that if you’re alive and sell the home that you’ve pledged you must return the dollars you withdrew back to your Retirement Account. If you can withdraw whatever you need without a property pledge then that’s for the best. You won’t have anything to pay back into your RA if you ever sell the home.

 

[henrylbh]

But I thought need to decide on BRS or FRS at 55 leh

https://dollarsandsense.sg/heres-need-know-pledging-property-meet-cpf-full-retirement-sum-frs/

At 55 whatever you have in SA will be transferred to your RA followed by OA to meet the default FRS. In other words your SA will be zeroed unless you have more than FRS in it. Then if you decide to withdraw amount above BRS with adequate property pledge, the withdrawal will be not be transferred back to your SA but paid to you in cash from your RA. In other words, your SA is always zero, except for working contributions. The working contributions in SA together with OA can be withdrawn anytime, if you have met FRS.

 

[BBCWatcher]

Above in bold is what I want to know which mean before or close to age 55 I will double confirm with CPF again. I want to go for BRS definitely! I do a better job than CPF OA 2.5 last I check my cpf investment!

You can fund your new Retirement Account primarily from your Ordinary Account if you merely “shield” your Special Account. Then you’ll presumably end up with a Retirement Account at the Full Retirement Sum (or even Enhanced Retirement Sum if you wish) earning at least 4.0% interest AND no requirement to repay your Retirement Account if you ever sell your home AND gobs of dollars you can withdraw in any increment any time you wish AND a much higher monthly pension for life (and higher residual at any/every age when a residual remains). That’s a lovely combination.

 

[jasvonvios]

I have 60k in OA and 78k in SA after FRS, should I withdrawn them for better returns, eg T-bills. What are your recommendations?

 

[fr33d0m]

All confusion is result of continuation of SA after RA is formed.

what BRS + property pledge helps is how much you can withdraw from RA.

RA is quite liquid above FRS or BRS + property pledge. You don’t need SA. However, you can’t withdraw the top up and interest on top up.

 

[bluezzy]

Nope. The only deadline to make a lump sum withdrawal from your Retirement Account is about a month before CPF LIFE payouts start.

RA interest stays in RA then streams out via CPF LIFE monthly payouts. But your option to withdraw principal runs way past 55.

Once your RA reaches your age 55 FRS all remaining and future SA and OA dollars are available for withdrawal. No property pledge/charge required. Plus you have RA withdrawal options: a smaller withdrawal without a property pledge/charge, a bigger one with.

Keep in mind that if you’re alive and sell the home that you’ve pledged you must return the dollars you withdrew back to your Retirement Account. If you can withdraw whatever you need without a property pledge then that’s for the best. You won’t have anything to pay back into your RA if you ever sell the home.

That means if I go with the standard choice of FRS, my OA and SA will go towards forming the RA then I can still withdraw the amount I want from RA? They won't lock up the amount?

 

[bluezzy]

You can fund your new Retirement Account primarily from your Ordinary Account if you merely “shield” your Special Account. Then you’ll presumably end up with a Retirement Account at the Full Retirement Sum (or even Enhanced Retirement Sum if you wish) earning at least 4.0% interest AND no requirement to repay your Retirement Account if you ever sell your home AND gobs of dollars you can withdraw in any increment any time you wish AND a much higher monthly pension for life (and higher residual at any/every age when a residual remains). That’s a lovely combination.

I do plan to shield the money in my SA by getting short-term t-bills or unit funds before I reach 55 so that my OA will all go towards forming the RA first. Once the short term investment matures, it will also go back into SA?

 

[BBCWatcher]

I have 60k in OA and 78k in SA after FRS, should I withdrawn them for better returns, eg T-bills. What are your recommendations?

T-bills are currently yielding less than 4%, so obviously they’re not attractive compared to the Special Account interest rate. You can invest up to $40K of your OA in T-bills if you wish. At current or similar T-bill yields that would be an improvement over OA’s 2.5% interest rate.

 

[BBCWatcher]

Once the short term investment matures, it will also go back into SA?

Yes, automatically. Or in the case of a unit trust upon redemption (sale/cash out) of the unit trust.

 

[bluezzy]

Yes, automatically. Or in the case of a unit trust upon redemption (sale/cash out) of the unit trust.

How much of SA can I "shield"? Like let's say BRS is 150k/FRS is 300k and my OA has 150k but SA has 300k, can I shield all 300k in SA? Or can only shield up to 150k to ensure I have enough up to FRS? If I have a property that is worth 150k or more, can I shield the entire 300k in SA?