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MCKawe 28-07-2018 01:18 PM

Hi BBCW,

I have a few queries regarding CPF RA and the BRS/FRS and retirement.

1) If I have a property pledge, I can still opt for the FRS plan right? Is this advisable?

2) Should I leave the excess money in the RA(that is not used for BRS/FRS) for the interest or take it out for other investments or top up my children's SA? I read that withdrawals can be made anytime.

3) I have AIA healthshield gold plan Max B on top of my medisave. Since I'm approaching retirement, are there any other insurances I should take up to cover myself?

4) I have a few Endowment plans made years ago that will provide me a significant lump sum after maturity in the next few years. What should I do with these money? Should I invest in a dividend paying stock/ETF, use the dividends for retirement and pass it on to my NOK when I pass away?

Thank you

ExtremeWays 28-07-2018 01:39 PM

Here is my strategy:
1. Transfer all OA to SA every month until minimum sum is reached.
2. Don't buy a house. Live with parents or rent (if kid is getting big).
- Don't invest in properties. Buy a REIT and make someone work for you.
3. Invest at least 50% of monthly salary and 100% of bonus to:
- Stocks (NO ETFS or DCA strategy)
- Forex (No Stop Loss)
4. Minimise expenses:
- Parents: 1000
- Family: 500 (Future)
- Personal: 200

I am just an ordinary guy sharing some secrets to getting wealthy.

peipei1 28-07-2018 01:42 PM

Quote:

Originally Posted by BBCWatcher (Post 115700389)
Another, more common example in the United States is car financing. Car manufacturers fairly often offer 0.0% or 0.9% loans for up to 36 or even 48 months on new car purchases, especially for models that aren't selling as well as they hoped. The cars are built, so they really need to sell them since the carrying costs are rather high and the end of the model year keeps approaching. So they're often willing to finance them free or basically free. So should you pay cash when somebody is offering 0.0% financing for 36 months? No, of course not -- that'd be silly. You can take that same cash, push it into a 3 year fixed deposit (called a certificate of deposit in the United States) which is government insured up to US$250,000, earn some interest, and pocket that extra money. Free (or cheap) loans are wonderful when they're offered. Then you just set up your car loan payments to be automatic (so you don't forget one), and you pay off the car loan on schedule, but no faster than on schedule.

We always use 12 month interest free installment from our Credit Card providers. :s47:

Installments used to be frown upon here, but CC are very useful so long one keeps good spending habits.

On CPF topic,
BBC I commented in another post, CPF interest rates can be subjected to changes, we see CPF monies form part of our SWF, if their performances are bad, our CPF board can be forced to cut interest rates no?

Another way of saying is our CPF locked in funds have quite high TER on the 2.5-4% pa returns! :s11:=:p

JuniorLion 28-07-2018 01:59 PM

Quote:

Originally Posted by ExtremeWays (Post 115716560)
Here is my strategy:
1. Transfer all OA to SA every month until minimum sum is reached.
2. Don't buy a house. Live with parents or rent (if kid is getting big).
- Don't invest in properties. Buy a REIT and make someone work for you.
3. Invest at least 50% of monthly salary and 100% of bonus to:
- Stocks (NO ETFS or DCA strategy)
- Forex (No Stop Loss)
4. Minimise expenses:
- Parents: 1000
- Family: 500 (Future)
- Personal: 200

I am just an ordinary guy sharing some secrets to getting wealthy.

Thanks for sharing.

MrHighlander 28-07-2018 02:04 PM

What is ETFS?

Quote:

Originally Posted by ExtremeWays (Post 115716560)
Here is my strategy:
1. Transfer all OA to SA every month until minimum sum is reached.
2. Don't buy a house. Live with parents or rent (if kid is getting big).
- Don't invest in properties. Buy a REIT and make someone work for you.
3. Invest at least 50% of monthly salary and 100% of bonus to:
- Stocks (NO ETFS or DCA strategy)
- Forex (No Stop Loss)
4. Minimise expenses:
- Parents: 1000
- Family: 500 (Future)
- Personal: 200

I am just an ordinary guy sharing some secrets to getting wealthy.


MrHighlander 28-07-2018 02:07 PM

Thank you BBCW for your detailed response - very helpful

Quote:

Originally Posted by BBCWatcher (Post 115713694)
No. Cash top-ups, and transfers from OA, to SA are simply not permitted once the SA has reached the Full Retirement Sum (FRS). (They are also not permitted once the member reaches age 55. Cash top-ups to the Retirement Account, up as high as the Enhanced Retirement Sum, are permitted from age 55.) The portion of compulsory contributions, and of “all three” voluntary top-ups (CPF Form VC/1 or electronic equivalent), ordinarily allocated to the Special Account continues to flow into the Special Account — no change.

The portion of compulsory contributions, and of “all three” voluntary top-ups, to Medisave can spill over into the Ordinary Account. MA to OA spillover happens if both these conditions hold:

(a) The Medisave balance has reached the Basic Healthcare Sum (BHS);
(b) The Special Account has reached the FRS.


FrostWurm 28-07-2018 02:24 PM

Quote:

Originally Posted by ExtremeWays (Post 115716560)
Here is my strategy:
3. Invest at least 50% of monthly salary and 100% of bonus to:
- Stocks (NO ETFS or DCA strategy)
- Forex (No Stop Loss)

Please sir, tell me which stocks or currencies to buy :s11:

ExtremeWays 28-07-2018 02:36 PM

Quote:

Originally Posted by FrostWurm (Post 115717123)
Please sir, tell me which stocks or currencies to buy :s11:

Have the discipline to do your own research......

One reason why people do DCA in ETF is because they are lazy

BBCWatcher 28-07-2018 04:39 PM

Quote:

Originally Posted by MCKawe (Post 115716261)
1) If I have a property pledge, I can still opt for the FRS plan right? Is this advisable?

To my knowledge, you can start CPF LIFE payouts as late as age 70 and, provided you have the funds, you can change your mind about participation level (increase it) as long as you do it strictly before your 80th birthday.

I would prefer more than a BRS level income stream at age 65+, so yes, I think it’s advisable to participate in CPF LIFE at a higher level.

Quote:

2) Should I leave the excess money in the RA(that is not used for BRS/FRS) for the interest or take it out for other investments or top up my children's SA? I read that withdrawals can be made anytime.
The former, unless you need the money for immediate consumption.

Quote:

3) I have AIA healthshield gold plan Max B on top of my medisave. Since I'm approaching retirement, are there any other insurances I should take up to cover myself?
What’s your approximate Medisave balance?

Quote:

4) I have a few Endowment plans made years ago that will provide me a significant lump sum after maturity in the next few years. What should I do with these money? Should I invest in a dividend paying stock/ETF, use the dividends for retirement and pass it on to my NOK when I pass away?
It depends. Approximately what percentage of your current household wealth do you have in stocks and stock-likes (which would include real estate)? And approximately how many years are you away from retirement?

JuniorLion 28-07-2018 04:57 PM

Quote:

Originally Posted by MrHighlander (Post 115716868)
What is ETFS?

Probably something he made up along the way of trolling.

MCKawe 28-07-2018 05:14 PM

Quote:

Originally Posted by BBCWatcher (Post 115718639)
To my knowledge, you can start CPF LIFE payouts as late as age 70 and, provided you have the funds, you can change your mind about participation level (increase it) as long as you do it strictly before your 80th birthday.

I would prefer more than a BRS level income stream at age 65+, so yes, I think it’s advisable to participate in CPF LIFE at a higher level.


The former, unless you need the money for immediate consumption.


What’s your approximate Medisave balance?


It depends. Approximately what percentage of your current household wealth do you have in stocks and stock-likes (which would include real estate)? And approximately how many years are you away from retirement?

Is the new CPF LIFE escalating plan worth it? At what age would it break even assuming I start at 65?

Approximately have 40k in medisave balance.

Currently have ~25% in stocks and stocks-like. This is assuming that the current balance in endowment plan & sum in CPF is included as part of the not stocks and stocks-like portion. Plan to retire in the next 2-3 years.

Lewis.T 28-07-2018 05:15 PM

Quote:

Originally Posted by JuniorLion (Post 115718826)
Probably something he made up along the way of trolling.

It's an exchange traded fund..

JuniorLion 28-07-2018 06:00 PM

Quote:

Originally Posted by MCKawe (Post 115719016)
Is the new CPF LIFE escalating plan worth it? At what age would it break even assuming I start at 65?

Approximately have 40k in medisave balance.

Currently have ~25% in stocks and stocks-like. This is assuming that the current balance in endowment plan & sum in CPF is included as part of the not stocks and stocks-like portion. Plan to retire in the next 2-3 years.

CPF Escalating life will give you total returns higher than cpf standard if you live to 90.

JuniorLion 28-07-2018 06:01 PM

Quote:

Originally Posted by Lewis.T (Post 115719024)
It's an exchange traded fund..

That's ETF not ETFS.

BBCWatcher 28-07-2018 06:35 PM

Quote:

Originally Posted by MCKawe (Post 115719016)
Is the new CPF LIFE escalating plan worth it?

Yes. It’s the only CPF LIFE payout plan that offers some protection against inflation, which makes it the best longevity insurance, which makes it the winner by default.

Quote:

At what age would it break even assuming I start at 65?
Who cares? At what age are you guaranteed to die?

CPF LIFE is not a casino, MCKawe. Your other wealth can play those games, if you wish. CPF LIFE is insurance, specifically sovereign longevity insurance. It defends you against the slight (or possibly greater) risk of outliving your savings — insurance against living “too long.” And it’s the AAA-rated government doing the defending, which is really special.

All you need to decide is how much more minimum income, if any, would you you need above the Basic Retirement Sum-level CPF LIFE, and (I’d recommend) assuming payouts start at age 70 on the Escalating Plan, if/when you outlive your savings. If CPF LIFE becomes your sole source of income, could you get by on $800/month (current dollars at payout starting date, increased 2%/year in ancipation of inflation), for example? Or $950? Or $1080? Pick that number (or more) — that’s your only decision to make when the time comes. It’s truly that easy.

Quote:

Currently have ~25% in stocks and stocks-like. This is assuming that the current balance in endowment plan & sum in CPF is included as part of the not stocks and stocks-like portion. Plan to retire in the next 2-3 years.
That’s a little light, in my view. I think you can raise that to 30% if you like, so that you have a 30-70 split (approximately) in retirement. You could make that happen naturally once you retire by spending first from the bond/bond-like portion of your assets. The endowment plan seems like the most obvious first source of spending funds, if that works.


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