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CPF Special Account after 55 years old

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Old 13-02-2018, 08:36 AM   #31
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....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.
Then he needs the money at age 65! If he doesn't have an adequate emergency reserve fund, then he needs the money. OK, then, that's the fact that was not in evidence. Now it is.

Please note that he should count his CPF Ordinary Account and Special Account, if/as applicable, as part of his emergency reserve fund since those funds can be withdrawn on demand.

Redepositing makes no sense for building up an emergency reserve fund. If the strategy is to redeposit funds right away, don't start CPF LIFE payouts -- that doesn't make sense. If the strategy is to build up emergency reserve funds (in the form of SSBs, typically), starting at age 65 because his emergency reserves are presently inadequate, OK, that makes sense.
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Old 13-02-2018, 05:10 PM   #32
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[QUOTE=BBCWatcher;112802142]Please note that he should count his CPF Ordinary Account and Special Account, if/as applicable, as part of his emergency reserve fund since those funds can be withdrawn on demand.
QUOTE]

Agree with BBC on this portion about CPF facts.
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Old 13-02-2018, 07:46 PM   #33
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Redepositing makes no sense for building up an emergency reserve fund. If the strategy is to redeposit funds right away, don't start CPF LIFE payouts -- that doesn't make sense. If the strategy is to build up emergency reserve funds (in the form of SSBs, typically), starting at age 65 because his emergency reserves are presently inadequate, OK, that makes sense.
it does make sense if what lion says is true.

cpf life is totally not liquid. ra is totally liquid according to lion. but i am not sure about that.

by transferring for cpf life to ra, he is converting something that is not liquid to something that is liquid. but i am also not sure if you can deposit every thing into just ra

also ra earns 4% interest and CPF life standard earns 0 interest.

cpf life forces you to draw out at 70. for ra, you can wait until 120 before you draw.

Last edited by dork32; 13-02-2018 at 07:48 PM..
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Old 13-02-2018, 07:58 PM   #34
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hi lion,
what you are doing for your uncle is not wrong, depending on which angle you are looking at.

but there are two main issues here.

1st issue.
Are you sure that you can re-deposit it back into just the ra? I thought you can only put money into cpf through vc, voluntary contribution. the bulk of vc goes into oa and not ra.

2nd issue.
based on the old minimum sum scheme, ra is just as liquid as cpf life. it gives you a fixed monthly payout till the funds run out.
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Old 13-02-2018, 08:06 PM   #35
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Dork32, you can't just redeposit into RA and magically get liquid funds. Directed top-ups must be paid out as CPF LIFE annuities for CPF LIFE members, which this individual is. Non-directed ("all three account") top-ups don't go into RA at all, and they only trivially go into SA. (Importantly, some also goes into MA if MA is below the BHS; MA is a pool of restricted use funds.) And this individual is already topping up at $7,000/year (directed RA top-ups, presumably) to get whatever tax relief he can get. (He may still be working, have rental income, and/or otherwise have an income tax bill.)

....In short, no, it rarely makes sense to start CPF LIFE payouts any earlier than required if you don't need the money. But, we've since learned, this money might be needed to build up a currently insufficient emergency reserve fund, presumably via SSBs. OK then, that means this money is needed sooner rather than later. In that case, sure, start the CPF LIFE payouts at age 65.

Last edited by BBCWatcher; 13-02-2018 at 08:09 PM..
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Old 13-02-2018, 08:52 PM   #36
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Dork32, you can't just redeposit into RA and magically get liquid funds. Directed top-ups must be paid out as CPF LIFE annuities for CPF LIFE members, which this individual is. Non-directed ("all three account") top-ups don't go into RA at all, and they only trivially go into SA. (Importantly, some also goes into MA if MA is below the BHS; MA is a pool of restricted use funds.) And this individual is already topping up at $7,000/year (directed RA top-ups, presumably) to get whatever tax relief he can get. (He may still be working, have rental income, and/or otherwise have an income tax bill.)
Pretty sure top ups to RA after 65 will NOT be used automatically purchased the CPF Life Annuity.

Last edited by JuniorLion; 13-02-2018 at 09:49 PM..
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Old 13-02-2018, 11:14 PM   #37
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Pretty sure top ups to RA after 65 will NOT be used automatically purchased the CPF Life Annuity.
Voluntary top-ups to RA, no matter when those top-ups are made, can only come out in two ways:

(a) Via CPF LIFE (or old RSS, if applicable) monthly payouts.

(b) Upon the death of the CPF member, to the nominated heir(s), if part of a residual bequest.

That's it. (See here for details, under "How can the top-up monies be used?") Once payouts start the CPF member might have to contact CPF if he/she wants the monthly payout adjusted upward as soon as possible. CPF might eventually, automatically make that adjustment on its own in due course.

Unfortunately there's no option to "split" the RA across two or more CPF LIFE payout plans. No matter whether you're in Standard, Basic, or Escalating, all your payouts -- including recalculated payouts after top-ups -- need to stay within the same payout plan. (I could see some merit in, for example, opting for Escalating on a BRS-level CPF LIFE foundation and then Standard above that. But that's not an option.)
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Old 14-02-2018, 12:18 AM   #38
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Voluntary top-ups to RA, no matter when those top-ups are made, can only come out in two ways:

(a) Via CPF LIFE (or old RSS, if applicable) monthly payouts.

(b) Upon the death of the CPF member, to the nominated heir(s), if part of a residual bequest.

That's it. (See here for details, under "How can the top-up monies be used?") Once payouts start the CPF member might have to contact CPF if he/she wants the monthly payout adjusted upward as soon as possible. CPF might eventually, automatically make that adjustment on its own in due course.

Unfortunately there's no option to "split" the RA across two or more CPF LIFE payout plans. No matter whether you're in Standard, Basic, or Escalating, all your payouts -- including recalculated payouts after top-ups -- need to stay within the same payout plan. (I could see some merit in, for example, opting for Escalating on a BRS-level CPF LIFE foundation and then Standard above that. But that's not an option.)
This confirms u either dont know or understand all the cpf rules, will let juniorlion or others to correct your claims!
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Old 14-02-2018, 02:00 AM   #39
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Pretty sure top ups to RA after 65 will NOT be used automatically purchased the CPF Life Annuity.
Quite certainly that the top-ups to your uncle's RA will not be channelled into CPF Life (as he has met the min sum for his cohort). I believe besides CPF Life standard plan payout, he can also drawdown his RA like under the old RSS over a period of 20 years. If that's the case, he should commence CPF Life payout without delay while topping up his RA and delaying his drawdown on RA, if fund is not needed. But he can't withdraw RA at one go.
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Old 14-02-2018, 06:15 AM   #40
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Voluntary top-ups to RA, no matter when those top-ups are made, can only come out in two ways:

(a) Via CPF LIFE (or old RSS, if applicable) monthly payouts.

(b) Upon the death of the CPF member, to the nominated heir(s), if part of a residual bequest.

That's it. (See here for details, under "How can the top-up monies be used?") Once payouts start the CPF member might have to contact CPF if he/she wants the monthly payout adjusted upward as soon as possible. CPF might eventually, automatically make that adjustment on its own in due course.

Unfortunately there's no option to "split" the RA across two or more CPF LIFE payout plans. No matter whether you're in Standard, Basic, or Escalating, all your payouts -- including recalculated payouts after top-ups -- need to stay within the same payout plan. (I could see some merit in, for example, opting for Escalating on a BRS-level CPF LIFE foundation and then Standard above that. But that's not an option.)
https://www.cpf.gov.sg/assets/member...m_lidapp1a.pdf

You're suggesting that any top-up to RA after 65 will sit in the RA if the member does not contact CPF to purchase additional annuity.
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Old 14-02-2018, 06:16 AM   #41
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Quite certainly that the top-ups to your uncle's RA will not be channelled into CPF Life (as he has met the min sum for his cohort). I believe besides CPF Life standard plan payout, he can also drawdown his RA like under the old RSS over a period of 20 years. If that's the case, he should commence CPF Life payout without delay while topping up his RA and delaying his drawdown on RA, if fund is not needed. But he can't withdraw RA at one go.
Think this is the case. Will check with CPF Board soon!
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Old 14-02-2018, 06:43 AM   #42
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Yes, please let us know what they say about how voluntary/directed RA top-ups are processed. CPF’s published details seem clear enough to me — I have no idea why anyone wants to argue with what CPF itself writes about how CPF top-ups work — but OK, verbal confirmation is also useful.

I would remind everyone that money serves absolutely no useful purpose unless and until it’s exchanged for something useful (or at least enjoyable): food, clothing, plane tickets to Paris, or whatever. Those useful and/or enjoyable goods and services have a temporal dimension, meaning they can be delivered and consumed in the present or in the future. If you don’t need the money now (i.e. don’t presently need/want the goods and services your money can buy), and if the money is reliably doing fine without your attention, “let it ride.” It’s all quite simple conceptually.
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Old 14-02-2018, 09:38 AM   #43
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Yes, please let us know what they say about how voluntary/directed RA top-ups are processed. CPFs published details seem clear enough to me I have no idea why anyone wants to argue with what CPF itself writes about how CPF top-ups work but OK, verbal confirmation is also useful.

I would remind everyone that money serves absolutely no useful purpose unless and until its exchanged for something useful (or at least enjoyable): food, clothing, plane tickets to Paris, or whatever. Those useful and/or enjoyable goods and services have a temporal dimension, meaning they can be delivered and consumed in the present or in the future. If you dont need the money now (i.e. dont presently need/want the goods and services your money can buy), and if the money is reliably doing fine without your attention, let it ride. Its all quite simple conceptually.
The link provided by JuniorLion is clear enough.

I think it would be a disservice to his uncle to listen to your reminder. Recycling his payout to RA is the way even if he doesn't need the money.
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Old 14-02-2018, 10:28 AM   #44
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The link provided by JuniorLion is clear enough.
Link to what? I linked to CPF.

I think it would be a disservice to his uncle to listen to your reminder. Recycling his payout to RA is the way even if he doesn't need the money.
Why? If you don't need the money, why would you start payouts any earlier than required? [Because the (reliable, safe, growing) money is getting lonely without you? It doesn't make any logical sense!]

It's a moot issue because JL's father needs the money sooner rather than later, evidently. He doesn't have an adequate emergency reserve fund (evidently), and so he would logically start payouts at age 65 in order to build up an emergency reserve fund of SSBs (presumably).
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Old 14-02-2018, 10:37 AM   #45
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'money is getting lonely without you?' More like his uncle getting lonely without money. Grab first and recycle. He prefers a combo I wish I also can have.
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