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CPF Special Account after 55 years old

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Old 12-02-2018, 03:08 AM   #16
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Your uncle's case is unusual. He must have opted for CPF Life when it was first introduced and the rules then are different.

You mentioned that he will be getting 450 to 500 from age 65 from CPF Life.

Will he also be getting payout from his RA? Can he top up his RA?
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Old 12-02-2018, 06:20 AM   #17
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Your uncle's case is unusual. He must have opted for CPF Life when it was first introduced and the rules then are different.

You mentioned that he will be getting 450 to 500 from age 65 from CPF Life.

Will he also be getting payout from his RA? Can he top up his RA?
1) Will he also be getting payout from his RA? This part I don't know.
2) Can he top up his RA? Yes, he has been topping up $7000 every year.
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Old 12-02-2018, 08:16 AM   #18
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are you sure one can withdraw RA anytime?
i deposit into my mum's RA so she can get a monthly payout ... she can't withdraw anytime
Money in RA functions like a deposit account, which you can withdraw anytime.
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Old 12-02-2018, 11:31 AM   #19
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If he's in CPF LIFE then no, he cannot withdraw RA funds (without an extra special exception).

I'm just confused why he would start payouts at age 65 (instead of later, or age 70) only to plow the money back into RA immediately -- i.e. he doesn't need the money. That's fantastic that he doesn't need the money now, but why wouldn't he just defer until as late as age 70? Mathematically that's best (no lost interest), there's no extra work involved, and it doesn't decrease his tax relief opportunities (which he's taking maximum advantage of now, with those $7,000 top-ups to his RA that's still below the Full Retirement Sum).
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Old 12-02-2018, 11:40 AM   #20
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It doesn't automatically plow back into CPF Life, as I have read. It just stays in the RA, and earns 4% interest. Money in RA functions like a deposit account, which you can withdraw anytime. Unless I'm wrong on this -- would be happy if someone above 65 comes up and say.
money in RA only functions like deposit account when it is the original money. Extra top ups after 55 cannot be taken out.
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Old 12-02-2018, 11:49 AM   #21
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money in RA only functions like deposit account when it is the original money.
Not below the Basic Retirement Sum (with property pledge) or below the Full Retirement Sum (without), for those who are on CPF LIFE.

Extra top ups after 55 cannot be taken out.
All Special Account and Retirement Account directed voluntary top-ups must be paid out via CPF LIFE annuities (for those on CPF LIFE), no matter when you make those top-ups.

I'm excluding the $5,000 age 55+ withdrawal option in the above, generalized remarks.

....Anyway, yes, I'm puzzled by the "Don't need the money/start payouts at age 65" advice. It doesn't make mathematical sense to me. What am I/are we missing?
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Old 12-02-2018, 09:04 PM   #22
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So I've dug further. Here is what I found.

My uncle was under the old Minimum Sum Scheme, then opted to join the early CPF Life Scheme. So the rules at that time was really different.

My uncle turns 65 on the 1st May 2019. He turned 55 on 1st May 2009. According to the CPF Minimum Sum Scheme (https://www.sgmoneymatters.com/cpf-minimum-sum-scheme/), he had to set aside the minimum sum cash component (MSCC) on 1st May 2009. The MSCC is half the amount of the minimum sum. The minimum sum applicable to him was $106,000. So that means he had to set aside $53k.

According to this FAQ: https://www.cpf.gov.sg/Assets/member...LIFEscheme.pdf, there were 4 such schemes when CPF Life started.

My uncle joined the CPF Life Standard Scheme and had pledged 50k to CPF Life at that time. Between 2009 and 2019, the RA continues to grow. When he reaches his draw down age (DDA) on 1 May 2019, The remaining amount of his RA savings above the MSCC, if any, will be committed to CPF LIFE on that day.

From now till 1 May 2019, he is able to use his RA for his housing needs, if any.

Dayum, that's complicated.
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Old 12-02-2018, 10:30 PM   #23
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so that means he can't use RA like "bank deposit"? i.e withdraw as and when he like?
The remaining amount of his RA savings above the MSCC, if any, will be committed to CPF LIFE on that day.

From now till 1 May 2019, he is able to use his RA for his housing needs, if any.

Dayum, that's complicated.
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Old 12-02-2018, 10:36 PM   #24
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so that means he can't use RA like "bank deposit"? i.e withdraw as and when he like?
Sadly, no. Unless above FRS.
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Old 12-02-2018, 11:21 PM   #25
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thanks ... am still pretty confused over various schemes as well
but i thought all RA will be committed to CPF life?

my understanding is only if he is under minimum sum scheme, RA balance can use for monthly payout after 65
Sadly, no. Unless above FRS.
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Old 13-02-2018, 05:52 AM   #26
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thanks ... am still pretty confused over various schemes as well
but i thought all RA will be committed to CPF life?

my understanding is only if he is under minimum sum scheme, RA balance can use for monthly payout after 65
The older schemes function somewhat differently..
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Old 13-02-2018, 06:56 AM   #27
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He’s under the new CPF LIFE then, with some minor variation due to transition rules. One of the likely transition benefits is a “signing bonus.”

I’m still unclear why there’d be any recommendation to start CPF LIFE payouts at age 65 if he doesn’t need the income stream. That doesn’t make financial sense, unless I’m missing some fact not yet in evidence.
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Old 13-02-2018, 07:23 AM   #28
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He’s under the new CPF LIFE then, with some minor variation due to transition rules. One of the likely transition benefits is a “signing bonus.”

I’m still unclear why there’d be any recommendation to start CPF LIFE payouts at age 65 if he doesn’t need the income stream. That doesn’t make financial sense, unless I’m missing some fact not yet in evidence.
I suggest u go re-analyse the CPF rules in detail or go attend the 55 talk to find what u are missing, or wait till u hit 65 then I share with u!
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Old 13-02-2018, 07:50 AM   #29
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I suggest u go re-analyse the CPF rules in detail or go attend the 55 talk to find what u are missing, or wait till u hit 65 then I share with u!
The information to make this sort of decision is not secret. If you’ve got some advice to share, just do it. This isn’t black magic. It’s a straightforward financial optimization decision.
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Old 13-02-2018, 08:05 AM   #30
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The information to make this sort of decision is not secret. If you’ve got some advice to share, just do it. This isn’t black magic. It’s a straightforward financial optimization decision.
Ok. Now we're talking about mathematical optimization.

Not everything is about pure numbers optimization; wish it is like that, isn't it? There's this thing known as flexibility. It is not just about receiving payout of $500 starting @ age 65 versus receiving payout of $675 starting @ age 70.

Emergency doesn't allow a person to withdraw the rest of the CPF Life, though I believe it may be possible if one decides to do so in writing, and then going through some hoops.

Having a little more cash at hand and having the flexibility to re-deposit back to CPF Life beats having nothing at hand from age 65-70.

Unless, of course, the person has spare cash in the bank as excess. Sadly, not the case for my uncle. He has some, though. Not a lot.
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