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Old 11-08-2018, 06:11 PM   #466
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As a woman her payout for life is substantially lower than under RSS for 20 years from age 65.
Yes.

The difference recycled into RA can easily last 100 years.
No, not that long, and that presupposes she actually does that, faithfully and eternally.

Anytime she goes, her bequest will be more under RA (assuming she recycle the difference) unlike zero bequest at 92 under CPFL.
And so what? How does any money left over help her? Sheís dead at that point.

This isnít even a comparison. Itís quite silly.
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Old 12-08-2018, 03:51 PM   #467
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Dear BBCWatcher

May I know what are the investment options as a US citizen in Singapore? As far as I know the option is quite limited.
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Old 12-08-2018, 05:35 PM   #468
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Dear BBCWatcher

May I know what are the investment options as a US citizen in Singapore? As far as I know the option is quite limited.
You have landed into the right place with your 1st post. Good job. Bbcwatcher is your go to person.

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Old 12-08-2018, 08:54 PM   #469
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May I know what are the investment options as a US citizen in Singapore? As far as I know the option is quite limited.
Anything you would ordinarily choose that’s domiciled in the United States is perfectly fine, including U.S. 529 education savings plans. Charles Schwab and Interactive Brokers are both conveniently available from Singapore.

In Singapore, the following investments are appropriate for U.S. persons (if directly held, not through a fund or unit trust), although of course they are all U.S. taxable and reportable:

* Singapore Savings Bonds
* other Singapore Government Securities
* individual corporate bonds (but not derivatives and complex notes such as the Astrea series)
* Central Provident Fund (CPF) traditional assets (not the CPF Investment Scheme)
* some individual SGX-listed stocks, for example the bank stocks (DBS, UOB, OCBC)
* most policies sold by insurance companies, such as the fixed deposit-like endowment plans that pop up from time to time (although most are not great investments)
* individual real properties (and with the benefit of the U.S.-Singapore Free Trade Agreement that reduces Additional Buyer Stamp Duty to the same level that Singaporean citizens pay)

Passive Foreign Investment Company (PFIC) tax complications can arise when you choose other types of non-U.S. investments, such as unit trusts, REITs, exchange-traded funds, and certain SGX-listed stocks (such as CapitaLand) that are actually PFICs as the IRS defines them. PFICs are best avoided. If you work for an employer in Singapore with an employee stock purchase plan or other award of shares, be particularly careful. It depends on the employer, but the shares you receive could be PFICs and thus not terrific from a U.S. tax point of view.

If you and/or your spouse have earned income that is not fully excluded via the Foreign Earned Income Exclusion (IRS Form 2555), then you are eligible to make at least a non-deductible Traditional IRA contribution. You then may be able to roll over your Traditional IRA into a Roth IRA. If you are a CPF member and working for an employer in Singapore then you have non-excludable earned income, because....

....CPF interest is U.S. taxable when/as received, just like any ordinary bank interest. Yes, including all subaccounts, and no, it doesn’t matter that the money is locked up or restricted to particular uses. Moreover, the employer share of CPF contributions is part of your gross income from work (earned income), is U.S. taxable, and is non-excludable (cannot be excluded using IRS Form 2555). Thus that employer share of CPF contributions can qualify you to make at least some U.S. IRA contribution, even if all the rest of your earned income is Form 2555 excluded. Yes, this is weird, but this is the way the IRS wants it. Because you pay U.S. tax on the employer’s contribution and all interest, every year, the withdrawals should be U.S. tax free assuming you followed the rules correctly.

Supplementary Retirement Scheme (SRS) accounts are Singapore tax advantaged but offer no U.S. tax benefits whatsoever. You can participate in SRS, with the caveats above regarding choosing appropriate investments within the SRS.

ALL Singapore (and other non-U.S.) accounts, including CPF, are FinCEN Form 114 and IRS Form 8938 reportable.

Any questions?
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Old 13-08-2018, 11:36 AM   #470
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Dear BBCWatcher

May I know what are the investment options as a US citizen in Singapore? As far as I know the option is quite limited.
My two cents is to keep it simple:
- Take the benefits of CPF and SRS
- Invest in low-cost US index ETFs, like VOO, VT. I wish I could take advantage of those...
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Old 13-08-2018, 11:43 AM   #471
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You have landed into the right place with your 1st post. Good job. Bbcwatcher is your go to person.

Sent from Xiaomi REDMI NOTE 4 using GAGT
Hi Revhappy,

a side noob question:
- I see in your signature "GAGT". Is this a better app to read and reply HWZ than the official app?

I am actually having some problem with the official HWZ app. I do not know how to view posts from "earliest to latest". Apparently, it is like that if you do not sign in. Once you sign in, it becomes reverse. This is no convenient because I need to scroll down to finish the post and then scroll up to read the next post.

@BBCW, sorry if this side-tracks a bit on the topic. Since some new people come directly here (I feel happy for them and I wish I came here from the very beginning), maybe this could help them a bit in better taking in your expertise and suggestions as well
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Old 13-08-2018, 12:02 PM   #472
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Hi Revhappy,

a side noob question:
- I see in your signature "GAGT". Is this a better app to read and reply HWZ than the official app?

I am actually having some problem with the official HWZ app. I do not know how to view posts from "earliest to latest". Apparently, it is like that if you do not sign in. Once you sign in, it becomes reverse. This is no convenient because I need to scroll down to finish the post and then scroll up to read the next post.

@BBCW, sorry if this side-tracks a bit on the topic. Since some new people come directly here (I feel happy for them and I wish I came here from the very beginning), maybe this could help them a bit in better taking in your expertise and suggestions as well
GAGT is good. Except that I don't find a way to mutliquote or reply inline in between a quote and add emojis.

Sent from Xiaomi REDMI NOTE 4 using GAGT
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Old 13-08-2018, 12:50 PM   #473
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Anything you would ordinarily choose that’s domiciled in the United States is perfectly fine, including U.S. 529 education savings plans. Charles Schwab and Interactive Brokers are both conveniently available from Singapore.

In Singapore, the following investments are appropriate for U.S. persons (if directly held, not through a fund or unit trust), although of course they are all U.S. taxable and reportable:

* Singapore Savings Bonds
* other Singapore Government Securities
* individual corporate bonds (but not derivatives and complex notes such as the Astrea series)
* Central Provident Fund (CPF) traditional assets (not the CPF Investment Scheme)
* some individual SGX-listed stocks, for example the bank stocks (DBS, UOB, OCBC)
* most policies sold by insurance companies, such as the fixed deposit-like endowment plans that pop up from time to time (although most are not great investments)
* individual real properties (and with the benefit of the U.S.-Singapore Free Trade Agreement that reduces Additional Buyer Stamp Duty to the same level that Singaporean citizens pay)

Passive Foreign Investment Company (PFIC) tax complications can arise when you choose other types of non-U.S. investments, such as unit trusts, REITs, exchange-traded funds, and certain SGX-listed stocks (such as CapitaLand) that are actually PFICs as the IRS defines them. PFICs are best avoided. If you work for an employer in Singapore with an employee stock purchase plan or other award of shares, be particularly careful. It depends on the employer, but the shares you receive could be PFICs and thus not terrific from a U.S. tax point of view.

If you and/or your spouse have earned income that is not fully excluded via the Foreign Earned Income Exclusion (IRS Form 2555), then you are eligible to make at least a non-deductible Traditional IRA contribution. You then may be able to roll over your Traditional IRA into a Roth IRA. If you are a CPF member and working for an employer in Singapore then you have non-excludable earned income, because....

....CPF interest is U.S. taxable when/as received, just like any ordinary bank interest. Yes, including all subaccounts, and no, it doesn’t matter that the money is locked up or restricted to particular uses. Moreover, the employer share of CPF contributions is part of your gross income from work (earned income), is U.S. taxable, and is non-excludable (cannot be excluded using IRS Form 2555). Thus that employer share of CPF contributions can qualify you to make at least some U.S. IRA contribution, even if all the rest of your earned income is Form 2555 excluded. Yes, this is weird, but this is the way the IRS wants it. Because you pay U.S. tax on the employer’s contribution and all interest, every year, the withdrawals should be U.S. tax free assuming you followed the rules correctly.

Supplementary Retirement Scheme (SRS) accounts are Singapore tax advantaged but offer no U.S. tax benefits whatsoever. You can participate in SRS, with the caveats above regarding choosing appropriate investments within the SRS.

ALL Singapore (and other non-U.S.) accounts, including CPF, are FinCEN Form 114 and IRS Form 8938 reportable.

Any questions?
So u will not choose CPF Life Basic Plan since u will have to pay US tax on the 4+2% interest credited to the RA until age 90 or above?

U will choose CPF Life Escalating Plan since u will not have to pay US tax on the 4+2% interest credited to CPF Life pool which u can draw on as mthly payout for life?
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Old 13-08-2018, 02:35 PM   #474
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So u will not choose CPF Life Basic Plan since u will have to pay US tax on the 4+2% interest credited to the RA until age 90 or above? U will choose CPF Life Escalating Plan since u will not have to pay US tax on the 4+2% interest credited to CPF Life pool which u can draw on as mthly payout for life?
No, U.S. tax considerations (if any, and there probably aren't any) don't enter into that particular decision.(*) The overriding consideration is to avoid trying to make particular pools of money perform unnatural acts within their contexts. CPF LIFE's highest, best use is as longevity insurance -- that's what it's designed to do. CPF LIFE is not a guaranteed (or even likely) bequest, and it doesn't do anything else particularly well except assure a lifetime income stream. So I think there's only one smart play for that money (assuming reasonably good or better health and no immediate need for spending): defer to age 70, and Escalating Plan (i.e. inflation fighting). That particular two ingredient recipe is how you make it the very best longevity insurance.

It's kind of like deciding whether a violin virtuoso ought to focus on playing the oboe. A superb violin player probably could play the oboe decently, but why? Let the violin player play violin, oh so beautifully. If you also want to listen to an oboe, then find a better oboe player.

(*) U.S. Social Security Windfall Elimination Provision (WEP) rules might have some bearing on CPF LIFE-related decisions, but I'm expecting the WEP rules to change within the next several years.
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Old 14-08-2018, 12:01 AM   #475
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BBCW,
what are thoughts on pte annuity?
(cpf aside, and assumiing the FRS is attained)
i cant attached the BI here. but there is an AIA plan, that is quite promising.
yes, it is based on the 4.25% non-g portion.
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Old 14-08-2018, 08:38 AM   #476
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what are thoughts on pte annuity?
(cpf aside, and assumiing the FRS is attained)
Itís far better to buy up CPF LIFE to the Enhanced Retirement Sum (ERS) on your 55th birthday before adding any private Singapore dollar-denominated annuity. And donít forget your spouse/partner, who (if a citizen or Permanent Resident) can do the same thing.
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Old 14-08-2018, 09:31 AM   #477
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A lot of the insurance retirement plans are of the variety that keeps a principal sum and gives you the interest every year and returns you that principal as a death benefit. Only a handful offers real life annuity that draws down on your principal yet pays out for life like CPF Life.
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Old 14-08-2018, 10:01 AM   #478
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A lot of the insurance retirement plans are of the variety that keeps a principal sum and gives you the interest every year and returns you that principal as a death benefit.
"Welcome to Singapore," where insurance consumers evidently feel they must always "win." Which means they always lose.

Fun fact: CPF LIFE used to offer the Income Plan, which was pure, undiluted longevity insurance, albeit with a fixed nominal monthly payout (not an inflation fighter). Unfortunately, CPF got rid of the Income Plan, because only about 3% of the first wave of CPF LIFE participants chose it. For some odd reason a huge percentage of retirees would rather play "bequest lottery" and thus have lower levels of retirement income. "Bequest lottery" because neither CPF LIFE nor the older Retirement Sum Scheme ever guarantee a bequest. Just live long enough, and the bequest falls to zero. Yet for some odd reason many people want to reduce their retirement incomes -- which they could enjoy together with their heirs, as lifetime gifts! -- in order to have a chance they will leave residuals behind, usually in addition to the equity in their homes. This is really, really strange, but "Welcome to Singapore."

OK, if that's what CPF members prefer, then let's do it right! How about a payout plan that has these two features:

1. Monthly escalating payout (like the Escalating Plan);
2. Guaranteed bequest fixed at 10% of the premium as of the payout start date.

And let's call that payout plan the "Assured Plan." So you get an income for life, and you have a guaranteed bequest to your heir(s) no matter how long you live. The Assured Plan would be the first and only CPF plan in history to guarantee a bequest.

Then get rid of the Standard and Basic Plans.
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Old 14-08-2018, 12:03 PM   #479
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Do you have e.g. Of real pte life annuity.

A lot of the insurance retirement plans are of the variety that keeps a principal sum and gives you the interest every year and returns you that principal as a death benefit. Only a handful offers real life annuity that draws down on your principal yet pays out for life like CPF Life.
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Old 14-08-2018, 01:04 PM   #480
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"Welcome to Singapore," where insurance consumers evidently feel they must always "win." Which means they always lose.

Fun fact: CPF LIFE used to offer the Income Plan, which was pure, undiluted longevity insurance, albeit with a fixed nominal monthly payout (not an inflation fighter). Unfortunately, CPF got rid of the Income Plan, because only about 3% of the first wave of CPF LIFE participants chose it. For some odd reason a huge percentage of retirees would rather play "bequest lottery" and thus have lower levels of retirement income. "Bequest lottery" because neither CPF LIFE nor the older Retirement Sum Scheme ever guarantee a bequest. Just live long enough, and the bequest falls to zero. Yet for some odd reason many people want to reduce their retirement incomes -- which they could enjoy together with their heirs, as lifetime gifts! -- in order to have a chance they will leave residuals behind, usually in addition to the equity in their homes. This is really, really strange, but "Welcome to Singapore."

OK, if that's what CPF members prefer, then let's do it right! How about a payout plan that has these two features:

1. Monthly escalating payout (like the Escalating Plan);
2. Guaranteed bequest fixed at 10% of the premium as of the payout start date.

And let's call that payout plan the "Assured Plan." So you get an income for life, and you have a guaranteed bequest to your heir(s) no matter how long you live. The Assured Plan would be the first and only CPF plan in history to guarantee a bequest.

Then get rid of the Standard and Basic Plans.
What are the major differences between CPF Life Basic vs Escalating Plan? Both are longevity insurance as mthly payout are for life:

1. Lower payout compared to Standard (about 100-200), higher than escalating plan until escalating catches up? All mthy Payouts may be reduced in future.
2. Refund of CPF Life Premium if u exit earlier than "expected". Higher for Basic Plan, lower for Escalating Plan, because Basic Plan earns 4%+2% pa interest but escalating plan does not.

I would rather get a higher refund for a slightly lower payout but higher than escalating in the initial years since I have other ways to increase the payout amt.

Nothing wrong if others differ in opinion/choice, so long they know what they are doing!
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