CPF interest coming tonight

[DragonFire]

how to put 1M in OA?

I assume it is because he wants to retain only BRS in RA. So everything left in the SA after RA creation will be consolidated into OA.

There are some quirks here though that are very poorly documented because they are somewhat of an oddball case for now.

RSTU contributions and interest on these, as well as government sourced top ups are intended for the RA.

Whilst they remain below the BRS, there should be no effect.

On the other hand, if they EXCEED the BRS, I think these will be forcibly moved to the RA regardless. The language is relatively clear on that. What I am not so clear about is what if they also EXCEED the FRS.

 

[DragonFire]

prreeease don't disturb Kok Leong lah
later he forgot to lock/close the server room again

I bought a bunch of these to stick on my servers and network gear.

 

[inmyopinion]

Why is it approx and not a firm number?

CPFB cannot give u the exact number.
Also depends on whether you are male/female.
Also the floor rate of 4% on Retirement Account savings, the actual interest earned can fluctuate above that.
Risk pooling factors.
Date start... etc etc etc

Just work with the range.

 

[compro_1975]

1M put inside OA, every month draw 2k from 55 to 65, RA put BRS, 1k additional at 65, 3k 65 onwards, you never touch your 1M principal

This is provided choose basic, standard or escalating plan?

 

[KnyghtRyder]

I assume it is because he wants to retain only BRS in RA. So everything left in the SA after RA creation will be consolidated into OA.

There are some quirks here though that are very poorly documented because they are somewhat of an oddball case for now.

RSTU contributions and interest on these, as well as government sourced top ups are intended for the RA.

Whilst they remain below the BRS, there should be no effect.

On the other hand, if they EXCEED the BRS, I think these will be forcibly moved to the RA regardless. The language is relatively clear on that. What I am not so clear about is what if they also EXCEED the FRS.

except you don't get to choose how much funds are transferred from the SA to the RA.

The system is, if SA has insufficient funds to make up the FRS, then all of SA is transferred and any shortfall comes from OA. SA is closed.

If SA has sufficient funds to make up the FRS, then the FRS amount is transferred to RA and any remaining funds is transferred from SA to OA and SA is closed.

So the scenario in which you only transfer the BRS into your RA while keeping everything else in the OA doesn't exist. At least not today.

 

[inmyopinion]

CPFB cannot give u the exact number.
Also depends on whether you are male/female.
Also the floor rate of 4% on Retirement Account savings, the actual interest earned can fluctuate above that.
Risk pooling factors.
Date start... etc etc etc

Just work with the range.

Lifelong Payout Guaranteed
Capital Protection Guaranteed (Your premium, minus payouts, goes to beneficiaries)
Monthly Payout Amount Estimated (Subject to small, gradual adjustments)

 

[tmkedmw]

how to put 1M in OA?

It happened but I never managed it to be so.

 

[compro_1975]

Lifelong Payout Guaranteed
Capital Protection Guaranteed (Your premium, minus payouts, goes to beneficiaries)
Monthly Payout Amount Estimated (Subject to small, gradual adjustments)

I want the plan where what is mine remains mine. Dun wanna share with others given I easily reach ers next year.. so i think basic works best for me

 

[inmyopinion]

except you don't get to choose how much funds are transferred from the SA to the RA.

The system is, if SA has insufficient funds to make up the FRS, then all of SA is transferred and any shortfall comes from OA. SA is closed.

If SA has sufficient funds to make up the FRS, then the FRS amount is transferred to RA and any remaining funds is transferred from SA to OA and SA is closed.

So the scenario in which you only transfer the BRS into your RA while keeping everything else in the OA doesn't exist. At least not today.

Can be done.

When one is near 55 yo. Eg. One has $300K in SA and some cash savings in your bank.
I am using $300K (SA). Orwell (he) will have more since u still have like7 yrs to reach 55 yo.

Shielding:
Before turning 55: Invest $260K (need to leave $40K), from your SA into a safe financial instrument.
Leave $20K in OA and invest everything.

Step 1:
When you turn 55, $40k will be transferred from your SA to RA, and $20k from OA to RA.
Total: $60K in RA

Step 2:
Top up cash to your RA to the prevailing FRS.


Step 3:
Sell/redeem your OA and SA investment or when it matures.


Since you have met your cohort's FRS, the $260K from SA will flow into your OA. You can meet the 1 mil in OA.

This amount earns a risk free 2.5% interest per annum and u can withdraw any amount at anytime.
Cons: You may lose money in your SA investment or may not beat the guaranteed 4%

 

[DragonFire]

except you don't get to choose how much funds are transferred from the SA to the RA.

The system is, if SA has insufficient funds to make up the FRS, then all of SA is transferred and any shortfall comes from OA. SA is closed.

If SA has sufficient funds to make up the FRS, then the FRS amount is transferred to RA and any remaining funds is transferred from SA to OA and SA is closed.

So the scenario in which you only transfer the BRS into your RA while keeping everything else in the OA doesn't exist. At least not today.

The main mistake I made is assuming only BRS would be taken. Looks like CPF will transfer FRS first, and you have to withdraw the amount above BRS in cash.

Still TS scenario of 1m in OA is possible if OA+SA-FRS >= 1m.

 

[inmyopinion]

I want the plan where what is mine remains mine. Dun wanna share with others given I easily reach ers next year.. so i think basic works best for me

It's up to individuals to choose / decide the right plan for himself/herself.

The pros/cons are available and discussed in EDMW and elsewhere.

 

[KnyghtRyder]

Can be done.

When one is near 55 yo. Eg. One has $300K in SA and some cash savings in your bank.
I am using $300K (SA). You will have more since u still have like7 yrs to reach 55 yo.

Shielding:
Before turning 55: Invest $260K (need to leave $40K), from your SA into a safe financial instrument.
Leave $20K in OA and invest everything.

Step 1:
When you turn 55, $40k will be transferred from your SA to RA, and $20k from OA to RA.
Total: $60K in RA

Step 2:
Top up cash to your RA to the prevailing FRS.


Step 3:
Sell/redeem your OA and SA investment or when it matures.


Since you have met your cohort's FRS, the $260K from SA will flow into your OA. You can meet the 1 mil in OA.

This amount earns a risk free 2.5% interest per annum and u can withdraw any amount at anytime.
Cons: You may lose money in your SA investment or may not beat the guaranteed 4%

We talking about BRS. Your option works for FrS though I would argue that it is unnecessarily complicated.

 

[KnyghtRyder]

The main mistake I made is assuming only BRS would be taken. Looks like CPF will transfer FRS first, and you have to withdraw the amount above BRS in cash.

Still TS scenario of 1m in OA is possible if OA+SA-FRS >= 1m.

Correct..

 

[inmyopinion]

We talking about BRS. Your option works for FrS though I would argue that it is unnecessarily complicated.

he can pledge his property. then have more cash.
of course he can then use his cash for VHR and back to OA

with SA shielding and VHR - can

 

[mastermember]

Waiting eagerly. See liao CPF amount happy happy then can sleep.

 

[KnyghtRyder]

he can pledge his property. then have more cash.
of course he can then use his cash for VHR and back to OA

with SA shielding and VHR - can

Have you tried this? Because I can't get an official response from the Board that if I have withdrawn all my money above the BRS, when I do a VHR the money will be credited to my OA and not my RA..

Given that part of the terms and conditions for even being able to withdraw the BRS is that you must have sufficient CPF funds used to pay for the property such that your pledge amount is sufficient to cover the BRS, I'm thinking that in principle, any VHR done by a person who opted for BRS would see their VHR funds credited to their RA and not their OA.

Also, with regard to the SA shielding strategy you mentioned, I also don't think that works for BRS situation since when you unshield the funds will be credited to the RA account since they were originally taken from the SA account.

 

[inmyopinion]

Have you tried this? Because I can't get an official response from the Board that if I have withdrawn all my money above the BRS, when I do a VHR the money will be credited to my OA and not my RA..

Given that part of the terms and conditions for even being able to withdraw the BRS is that you must have sufficient CPF funds used to pay for the property such that your pledge amount is sufficient to cover the BRS, I'm thinking that in principle, any VHR done by a person who opted for BRS would see their VHR funds credited to their RA and not their OA.

Also, with regard to the SA shielding strategy you mentioned, I also don't think that works for BRS situation since when you unshield the funds will be credited to the RA account since they were originally taken from the SA account.

SA shielding:
The member is topping up the RA with cash which i mentioned in my post.
- $40K from SA + $20K from OA = $60K in RA
- If he/she is 55 this year, he/she needs to top up $153K to RA to meet FRS.
- If his/her cash is sitting in FD earning less interest, he/she can consider do this.
- Since he/she has met the FRS. When he/she liquidate the investment in SA, it will flow to OA.

VHR:
Looking at Orwell, he may do VHR first since he has like 7 yrs before he reaches 55.
So, he will build up his OA as much or as close to 1 mil as he mentioned.
Any shortfall, can be done by doing SA shielding.

 

[KnyghtRyder]

SA shielding:
The member is topping up the RA with cash which i mentioned in my post.
- $40K from SA + $20K from OA = $60K in RA
- If he/she is 55 this year, he/she needs to top up $153K to RA to meet FRS.
- If his/her cash is sitting in FD earning less interest, he/she can consider do this.
- Since he/she has met the FRS. When he/she liquidate the investment in SA, it will flow to OA.

VHR:
Looking at Orwell, he may do VHR first since he has like 7 yrs before he reaches 55.
So, he will build up his OA as much or as close to 1 mil as he mentioned.
Any shortfall, can be done by doing SA shielding.

As mentioned previously that SA shielding works if you have FRS, but the scenario described was not FRS but BRS and for BRS this cannot be done if one chooses BRS.

 

[inmyopinion]

$351 short of hitting 800k target this year

My wife.

 

[inmyopinion]

As mentioned previously that SA shielding works if you have FRS, but the scenario described was cancelled this be done if one chooses BRS.

He can vhr first.
Shielding is secondary. top up FRS with cash