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havetheveryfun 10-01-2019 05:20 PM

how to buy these :

http://infopub.sgx.com/FileOpen/lta....&FileID=539716

http://infopub.sgx.com/FileOpen/HDB%...&FileID=538750

tangent314 10-01-2019 06:26 PM

Step 1, get AI accreditation

bobobob 10-01-2019 07:39 PM

Quote:

Originally Posted by havetheveryfun (Post 118573609)

Those bonds are sold in denominations of 250k.

You can buy a35 bond fund which holds many of these kinds of bonds.

BBCWatcher 10-01-2019 07:42 PM

Or you can buy shares of MBH, a bond fund listed and traded on the SGX, that includes agency bonds (such as HDB and LTA bonds/notes) in its bond portfolio.

On edit: It’s either A35 or MBH, possibly both.

wannabelazy 16-01-2019 02:20 PM

Hi BBCW, would you recommend transferring SA monies to MA to make up the BHS if those funds are available? So that future MA contributions will flow in SA.

BBCWatcher 16-01-2019 05:39 PM

Quote:

Originally Posted by wannabelazy (Post 118673306)
Hi BBCW, would you recommend transferring SA monies to MA to make up the BHS if those funds are available? So that future MA contributions will flow in SA.

The recipient of such a transfer (SA to MA), which might be the same person (you), must be age 55 or older, and there are a couple other rules. Are you age 55+?

wannabelazy 16-01-2019 06:15 PM

Quote:

Originally Posted by BBCWatcher (Post 118677020)
The recipient of such a transfer (SA to MA), which might be the same person (you), must be age 55 or older, and there are a couple other rules. Are you age 55+?

Oh, damn. I didn't see that age 55+ rule. I'm actually 30+. Scratch that, then. So assuming I'm under the CPF annual limit, for tax relief I should prioritise MA top ups until BHS before SA tops ups right? And it's also a 7k maximum per year? Thanks!

BBCWatcher 16-01-2019 06:34 PM

Quote:

Originally Posted by wannabelazy (Post 118677666)
So assuming I'm under the CPF annual limit, for tax relief I should prioritise MA top ups until BHS before SA tops ups right?

I think so, yes, primarily because MediSave dollars can be useful at any/every age.

Quote:

And it's also a 7k maximum per year?
No, there's no such limit. Your MA top-ups must fit within both the CPF Annual Limit and Basic Healthcare Sum, but otherwise every MA top-up dollar is eligible for tax relief as long as it's your contribution to your own MA.

wannabelazy 16-01-2019 07:32 PM

Quote:

Originally Posted by BBCWatcher (Post 118677912)
I think so, yes, primarily because MediSave dollars can be useful at any/every age.


No, there's no such limit. Your MA top-ups must fit within both the CPF Annual Limit and Basic Healthcare Sum, but otherwise every MA top-up dollar is eligible for tax relief as long as it's your contribution to your own MA.

Great, thanks!

BBCWatcher 17-01-2019 09:04 AM

John Bogle, Vanguardís founder, has died. Vanguardís story about their founderís passing is available here.

Just before he died Bogle talked about two major concerns he has about the future:

1. He recommended planning for a period of comparatively low stock market returns going forward ó and incorporating that assumption in your retirement planning. Thatís not a portfolio recommendation but, rather, simply advice to temper your total long-term return expectations.

2. He was concerned about the concentration of stock ownership in the hands of a very few enormous fund managers, including Vanguard. He was concerned about the implications for corporate governance.

soaresb 19-01-2019 04:44 PM

Hi bbcw, I was reading your earlier posts on minimum insurance requirements. Agreed on the part about dii and term,you but just curious, why do you think public b1 integrated shield plan is sufficient? Isn't it better to have the option to seek treatment at better hospital/more comfortable wards by going for a better/slightly better plan?

BBCWatcher 21-01-2019 06:21 PM

Quote:

Originally Posted by soaresb (Post 118723766)
Agreed on the part about dii and term,you but just curious, why do you think public b1 integrated shield plan is sufficient? Isn't it better to have the option to seek treatment at better hospital/more comfortable wards by going for a better/slightly better plan?

Sufficiency is not the same concept as luxury. With a decent or better Integrated Shield plan that covers care in a public hospital in B1 ward, you're going to have protection against big hospital bills and have access to all the necessary medical care you need, and recuperate in an air conditioned ward (with some medical evidence it's helpful to your recuperation). Singapore's public medical system provides a full range of quality medical services; indeed, it provides some services that private hospitals do not.

If you want more than all that, can afford to buy it, and have covered all other insurance necessities first, then go for it. But buying more goes beyond sufficiency.

BBCWatcher 22-01-2019 01:18 PM

CPF Member? Have Another Country's Pension or Retiring Outside Singapore?
 
I'd like to draw your attention to another interesting little quirk (or set of quirks) related to CPF. This article applies to CPF members who are (1) eligible for a foreign country's retirement benefits (such as U.S. Social Security), or (2) planning to retire in another country.

CPF is a great program in very many ways, but one important limitation is that CPF is only Singapore tax advantaged. To my knowledge Singapore has no tax or social insurance treaties with other countries that effectively extend CPF's local tax advantages to other countries. If you live in another tax jurisdiction, or if you are a citizen or permanent resident of a couple countries (the United States as a notable example), then CPF becomes subject to another country's tax code and with no special favors.

This limitation can produce significantly different and surprising financial outcomes depending on your CPF-related decisions. For example, foreign tax can vary rather substantially depending on your CPF LIFE participation decision, payout start date, and/or payout plan selection. You should factor these foreign tax considerations into your CPF LIFE decisions before making those decisions. As one example, and bearing in mind I haven't run the exact numbers and checked the rules carefully enough, the U.S. tax code would probably slightly bias CPF LIFE decisions in favor of the earliest starting date (age 65, to try to keep more income in lower tax brackets), the Escalating Plan (since U.S. tax brackets are adjusted for inflation and since greater participation in the risk pool tends to be tax favored), and a higher level of participation versus conventional CPF interest. But that's just an educated guess at this point about the tax effects, and I can already see it's really complicated.

Also, if you're in line to receive another country's retirement benefits, you'll want to check whether and how that country attempts to coordinate benefits with CPF LIFE. The United States does, crudely, through something called the "Windfall Elimination Provision" (WEP). WEP is a bit complicated, but the basic way it works is to try to adjust for periods of time when a worker didn't pay into the U.S. Social Security system -- by working in Singapore, for example. WEP doesn't make any adjustments if that overseas work does not yield any retirement benefits from another country's system, but it does make such adjustments for workers with fewer than 30 years of baseline (or higher) contributions into the U.S. system who are in line to receive another country's retirement benefits, such as Singapore's CPF LIFE.

The WEP adjustment never exceeds 50% and is usually much less, but it can still be a pretty big reduction in your monthly Social Security retirement payout (and spousal payout if applicable). Fortunately there appear to be some clever, legal ways to avoid WEP reductions. One legal exception is if you make a full, lump sum withdrawal from the other country's system strictly before earliest payout eligibility age (currently age 65 for CPF LIFE). But you're not allowed to make a full withdrawal from CPF...or are you? You are, if you purchase an acceptable substitute private life annuity, opt out of CPF LIFE completely, and then make a full withdrawal. Unfortunately, you have to make a full withdrawal according to the WEP rules as I read them, although (it appears) your MediSave dollars can stay in place. But the purchase of a substitute private life annuity does not appear to trigger the WEP rules since, as far as I can tell, a private life annuity is not factored into the WEP calculation even if it is the substitute that allows you to make the full withdrawal. And there doesn't seem to be any prohibition against making subsequent CPF contributions after your U.S. Social Security retirement benefits start. I could be wrong about some or all of this, but that's my preliminary read.

Would you really want to do something like this? We all know that CPF interest is attractive and CPF LIFE is the best value life annuity in Singapore, better than any alternative private life annuity. But if this WEP workaround maneuver is actually viable (not sure yet, but it might be), and if avoiding WEP boosts your U.S. Social Security payout significantly, then it's possible, even likely, that you could come out ahead in the end.

The U.S. is probably not alone in having WEP-like coordination rules, so please look into the rules if you're expecting CPF LIFE payouts and are also eligible for retirement benefits from some other country.

Another possible outcome when you check the rules and run the numbers is that it'll make financial sense to boost your CPF LIFE payouts more than you might have expected you'd want or need to do, to compensate for the foreign tax and/or foreign retirement benefit reduction. And, if you have a spouse or partner, don't forget about him or her. Foreign tax and foreign retirement coordination rules can act quite differently (or not at all) on your spouse/partner and his/her benefits, so you may be able to optimize your results across the household in certain surprising ways.

w4rdsg 22-01-2019 01:59 PM

Thanks BBCW, interesting write up. I have 10 years in UK National Insurance and should do some equivalent research, though I suspect he rules will have changed by the time I reach retirement. A project for a rainy Sunday...

BBCWatcher 22-01-2019 03:28 PM

Quote:

Originally Posted by w4rdsg (Post 118770556)
I have 10 years in UK National Insurance and should do some equivalent research, though I suspect he rules will have changed by the time I reach retirement. A project for a rainy Sunday...

It's one of those "happy problems" to have.

Please note that many countries (not Singapore) have social security treaties with one another, called "totalization" treaties, so -- surprise! -- you may qualify for retirement benefits even if you only contributed into a particular country's system for a relatively limited period of time, or your spouse did. (Or even your ex-spouse in some cases.) For example, it's technically possible to qualify for modest U.S. Social Security benefits with as few as two well timed, big enough paychecks, and "paychecks" has a pretty expansive definition. There are also some countries, such as Japan, that allow non-vested foreign workers to withdraw contributions when they leave the country as long as the withdrawal request is timely. (Although you might not want to withdraw if you qualify for "totalization" through social security treaties that Japan has.)

I have no association whatsoever with the service I'm about to mention, but I mention it as an example. There are some financial consulting services that specialize in helping near retirees make these important retirement benefit optimization decisions. Maximizemysocialsecurity.com, Professor Laurence Kotlikoff's service for U.S. Social Security beneficiaries, is a well known example in that country. For US$250 you can hire a financial advisor to look at your particular U.S. Social Security situation (combined with your CPF and any other non-U.S. benefits) to get some professional advice on how to optimize your financial outcome. They also offer a lower cost US$40 service, but I think for the more complicated cases the US$250 service is necessary.


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