CPF SA Shielding hack - RIP (Obsolete)

[Okenba]

agree....pls come up with a complete plan before shutting all our SA accounts....if govt want to shut , should give us an option to withdraw or transfer to RA, should not just force the transfer to RA

What happens if you shield SA before you turn 55.
When you unshield, I assume it would go to OA? Even if RA has not hit FRS.
I think the sweep to RA only happens at 55 and 65?

 

[Okenba]

But very bad for those who are risk averse or do not know what they are doing and end up buying an ILP.

Dunno what to do just either top-up RA gao gao or leave in OA for 2.5%
Nowadays OA also can put in fixed deposit if outside rate is higher than 2.5%

 

[BBCWatcher]

What happens if you shield SA before you turn 55.
When you unshield, I assume it would go to OA? Even if RA has not hit FRS.

I don't think we know yet. But that'll be rare. The CPF Investment Scheme (SA) offers very few choices, and they're not that attractive compared to SA's interest rate (currently 4.08%).

I think the sweep to RA only happens at 55 and 65?

The second "sweep" occurs just before CPF LIFE payouts start. By default that'll be just before age 70. In the meantime a portion of compulsory contributions (and "all three account" Voluntary Contributions) will land in RA if the member has not met the Full Retirement Sum (or the Basic Retirement Sum with property pledge/charge).

Dunno what to do just either top-up RA gao gao or leave in OA for 2.5%
Nowadays OA also can put in fixed deposit if outside rate is higher than 2.5%

There are only two banks offering fixed deposits from Ordinary Accounts. Their interest rates are not the best in the market, and there are CPF Investment Account fees involved. Moreover, practically everyone age 55+ has at least some room to inject fresh funds into CPF. (I have to write "practically" because if you have 2 or more jobs then you might be the rare exception.)

However, if you highly value the asset protection aspects of CPF then you might settle for OA at 2.5%. You cannot invest those OA dollars if you want the asset protection. Dollars invested via the CPF Investment Scheme lose their protection (when the dollars have left OA or SA).

 

[royalmix]

What happens if you shield SA before you turn 55.
When you unshield, I assume it would go to OA? Even if RA has not hit FRS.
I think the sweep to RA only happens at 55 and 65?

Come 2025, CPFB will know you are trying to hide SA monies from them

So if you shield SA before 55, SA will be closed after 55, CPFB know you unshield SA, the monies will go to makeup your RA to FRS, then the balance will go OA!

Before you unshield, if you are employed, your CPF contributions will go to RA if below FRS.

Good luck!

 

[Okenba]

The second "sweep" occurs just before CPF LIFE payouts start. By default that'll be just before age 70. In the meantime a portion of compulsory contributions (and "all three account" Voluntary Contributions) will land in RA if the member has not met the Full Retirement Sum (or the Basic Retirement Sum with property pledge/charge).

Wondering if this move (SA earnings to go direct to RA if FRS not met) might have unintended impact.
Currently, OA and SA monies are liquid to someone who wants to work beyond 55.
Therefore, there is a strong draw to continue working esp if you value the liquidity that it gives you.

But if some amount of this is forced into RA, this might disincentivise some from working?
Or they might prefer employment without CPF contributions but higher possible take-home.
Which would defeat the point of all these moves to ensure that people shore up their RA...

 

[QinWei]

W life expectancy increase
It s too young to totally quit working at the dot of 55yo
1 can still 躺平 at workplace, dont hve to rush to quit

it is again nt so much of a liquidity issue as some stated

https://m.facebook.com/story.php?st...TnWHkKZqql&id=100064391875569&mibextid=WC7FNe

Around 720,000 CPF members have money in their Special Accounts that can be withdrawn:​

with a median balance of around S$2,000 (US$1,490).
Dr Tan denied that the government was aiming to save on interest payments to members by closing the accounts next year for those aged 55 and above.

“It is a matter of principle ... it is not about savings costs for the government,” he said.

 

[inmyopinion]

agree....pls come up with a complete plan before shutting all our SA accounts....if govt want to shut , should give us an option to withdraw or transfer to RA, should not just force the transfer to RA



Read HWZ Forum Rules!

They close SA for those who 55 yo & above.

Members can withdraw everything in OA if the member has set aside or meet the FRS in RA.

 

[BBCWatcher]

Wondering if this move (SA earnings to go direct to RA if FRS not met) might have unintended impact.
Currently, OA and SA monies are liquid to someone who wants to work beyond 55.

Only for the CPF members who've met the Full Retirement Sum (or the Basic Retirement Sum with property pledge or charge).

Therefore, there is a strong draw to continue working esp if you value the liquidity that it gives you.
But if some amount of this is forced into RA, this might disincentivise some from working?

If you haven't met the FRS (or BRS) then SA (and potentially OA) dollars are destined for RA. It's just a question of when, not if.

Or they might prefer employment without CPF contributions but higher possible take-home.
Which would defeat the point of all these moves to ensure that people shore up their RA...

At or below the FRS/BRS there's no huge difference. Some RAs will get better funded sooner. That'll mean more interest stays in RA, and that'll mean slightly higher CPF LIFE payouts.

Above the FRS there's a difference: from early 2025 RA and MA will be the only ways to earn the higher interest rate. I think the government expects that more people will voluntarily put more money into their Retirement Accounts. The big Enhanced Retirement Sum (ERS) hike in early 2025 is a strong indicator. My household is planning to add funds to the one Retirement Account we've got so far (up to the new 2025 ERS early next year), so I have one whole data point.

I don't think the "work/stop work" incentives will be that strong either way. More than half of CPF members aren't really affected at all. The government points out that only about 8,400 members (including 1 in my house) won't be able to transfer all their SA dollars into their RAs (if they wish), and even the 8,400 will be able to transfer a lot (an extra amount in early 2025 equivalent to the 2025 BRS).

 

[QinWei]

rates dropped!




Singapore

Interest rates for CPF Special, MediSave and Retirement accounts dip to 4.05% for Q2 2024​

The Ordinary Account interest rate will remain at 2.5 per cent for the same period.


https://www.channelnewsasia.com/sin...WuTdydqXt8PieeV7EPtYabbcXuki26SoBVDTNDQYfRHnM

 

[celtosaxon]

I don't think we know yet. But that'll be rare. The CPF Investment Scheme (SA) offers very few choices, and they're not that attractive compared to SA's interest rate (currently 4.08%).

Couldn’t SA CPFIS just be transferred to your OA CPFIS? I believe SA CPFIS has fewer options than OA CPFIS, so it should be compatible with whatever OA allows. I can’t imagine they would force you to sell — that was the main reason shielding worked.

 

[BBCWatcher]

Couldn’t SA CPFIS just be transferred to your OA CPFIS?

Before 55, no. That’d be comingling SA and OA. From age 55 onward, would that many people even want the option if offered? The CPFIS costs are still higher than what’s available outside.

 

[lzydata]

SINGAPORE – The closure of the CPF Special Account (SA) for members aged 55 and above will take place from the second half of January 2025 onwards, after changes to the CPF Act were passed in Parliament on Oct 14.

https://www.straitstimes.com/singap...ers-to-take-place-from-second-half-of-january

 

[ericcsn]

A small point but:

If you have already decided to withdraw some or all of the RA rather than having it distributes to OA (when this policy takes place), it is best to withdraw it on 1st Jan 25.

Because then you will be able to earn (a small) interest on the withdrawn SA (with a FD / HYSA) at least for the month of Jan 25 (since by the rule of CPF this RA money when transferred to the OA will not earn interest in the month it was transferred).

 

[BBCWatcher]

SINGAPORE – The closure of the CPF Special Account (SA) for members aged 55 and above will take place from the second half of January 2025 onwards, after changes to the CPF Act were passed in Parliament on Oct 14.

That’s ”early 2025”!

If you‘re a CPF member age 55+ who plans to withdraw funds from what will become OA dollars in January, 2025, then presumably you should do so at the beginning of January. You won’t get any SA interest for January since the dollars are moving in January, so you might as well start doing whatever you’re going to do (that isn’t 2.5% OA) as soon as possible in January. That could certainly include RA, but use cash first if you’re eligible for tax relief.

 

[BBCWatcher]

If you have already decided to withdraw some or all of the RA rather than having it distributes to OA (when this policy takes place), it is best to withdraw it on 1st Jan 25.

Because then you will be able to earn (a small) interest on the withdrawn SA (with a FD / HYSA) at least for the month of Jan 25 (since by the rule of CPF this RA money when transferred to the OA will not earn interest in the month it was transferred).

Those dollars will probably still earn OA’s 2.5% interest rate for January. Transfers are ordinarily an exception. But that’s an important point to clarify.

 

[ericcsn]

Those dollars will probably still earn OA’s 2.5% interest rate for January. Transfers are ordinarily an exception. But that’s an important point to clarify.

looks like you are right (and I am wrong - the 55ers and above still get the interest for the month of Jan 25 from the transfer of RA to OA) .
From
https://www.cpf.gov.sg/service/arti...ial-retirement-account-start-to-earn-interest

 

[HoGnix]

looks like you are right (and I am wrong - the 55ers and above still get the interest for the month of Jan 25 from the transfer of RA to OA) .
From
https://www.cpf.gov.sg/service/arti...ial-retirement-account-start-to-earn-interest

RA to OA or SA to OA?

 

[ericcsn]

RA to OA or SA to OA?

The link is about transfer into cpf SA/ RA from an existing account (and receiving interest) and an inference was made for SA to OA: that transfer between these cpf accounts will receive interest in that month in the receiving account.

 

[ericcsn]

Be savvy, DYODD how CPF calculates interest! Make a wrong move, u lose!

Not about moving from SA to OA which u still earn 2.5% for the whole amount!

Hint!

But move outside of cpf currently gets more than 2.5% in very safe bank deposits (although for how long). how then?

 

[ericcsn]

Because it is you, I drop hints! There are too many here not worth sharing "secrets" with! Good luck to deciphering the "secret"!

i know and appreciate and am trying very hard to understand your hint.