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CPF Special Account after 55 years old

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Old 15-02-2018, 08:29 AM   #61
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'some well-to-do CPF members used to do' or intend to do? The first batch (born in 1958) under mandatory CPF Life has not even reached PEA in 2023.
Henry, the maximum age policy is new and applies to everyone now. It’s not unique to CPF LIFE. Up until not too long ago it was possible for CPF members to avoid drawing down their retirement savings forever. Not any more. Members who turn age 70 in 2018 (or later), including old RSS participants, are subject to the age 70 maximum now. (See here: “Can I defer my monthly payout?”)

And there is nothing clever about enhanced nomination scheme, though it may serve the purpose of 'some' members, and they do so not for the sake of higher interest rates.
That’s another policy change, and perhaps you missed that, too. And it has nothing to do with the Enhanced Nomination Scheme. The old rule allowed an heir to keep CPF funds in the decedent’s account forever, earning attractive above market interest, and available for withdrawal on demand. That’s no longer the case. Now, under the new policy (as I recall), the decedent’s funds will earn OA interest for 6 months after the member dies, then zero.

It was a lovely “hack,” to just let those CPF funds stay in the decedent’s account. The government closed that loophole only recently.

Last edited by BBCWatcher; 15-02-2018 at 08:32 AM..
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Old 16-02-2018, 10:02 AM   #62
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"Need the money" includes needing an emergency reserve fund (or a bigger one). But if you don't need the money...why? It's a true mystery.
need money means you need to spend it.

if it is for emergency funds, even if i have not enuf for it now, it is not that urgent. emergency funds is not a must have. it is a good to have.

it is a mystery how you define "need"
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Old 16-02-2018, 10:04 AM   #63
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Based on your repeated points, could I say that if there's an option to defer CPF pay-out to 85 years old (and with 7% increase per year), then your personal opinion is that this is always the best choice to do so?

Assuming the person already has emergency funds of 24 months.
you are right, there is never a really best choice. every choice has its pros and cons. you choose the one that is best suited for you.

you do not have to listen to people with a one-track mind.
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Old 16-02-2018, 10:06 AM   #64
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It is possible to do an "all three" top up, but a portion of those funds goes into MA, which is quite restricted.
if the uncle has so much in the ra and cpf life. it is likely that he has maxed out his ma. and if this were to occur, it will overflow into the sa since it has not maxed out.
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Old 16-02-2018, 10:08 AM   #65
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Based on your repeated points, could I say that if there's an option to defer CPF pay-out to 150 years old (and with 7% increase per year), then your personal opinion is that this is always the best choice to do so?

Assuming the person already has emergency funds of 24 months.
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Old 16-02-2018, 06:08 PM   #66
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If a bucket of money is safe and growing nicely, and if you don't need it or even particularly desire anything, sure, let it ride, at any age. Use it for heirs, philanthropy, or some of both.

Not complicated.
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Old 17-02-2018, 10:32 AM   #67
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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.)
The highlighted statement above. Are you saying that, after 65, if you do VC to all 3 accounts, some of it will go into SA as opposed to RA?
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Old 18-02-2018, 01:06 AM   #68
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The highlighted statement above. Are you saying that, after 65, if you do VC to all 3 accounts, some of it will go into SA as opposed to RA?
Before or after 65, one is allowed to make VC either to 3 accounts (allocated to OA SA and MA) or to MA only (with tax relief), subject to annual limit. MA will overflow to SA/OA.

One is also allowed to top up one's RA, regardless of age, subject to prevailing FRS limit. Note VC is not the same as TU.
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Old 18-02-2018, 01:15 AM   #69
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Henry, the maximum age policy is new and applies to everyone now. It’s not unique to CPF LIFE. Up until not too long ago it was possible for CPF members to avoid drawing down their retirement savings forever. Not any more. Members who turn age 70 in 2018 (or later), including old RSS participants, are subject to the age 70 maximum now. (See here: “Can I defer my monthly payout?”)


That’s another policy change, and perhaps you missed that, too. And it has nothing to do with the Enhanced Nomination Scheme. The old rule allowed an heir to keep CPF funds in the decedent’s account forever, earning attractive above market interest, and available for withdrawal on demand. That’s no longer the case. Now, under the new policy (as I recall), the decedent’s funds will earn OA interest for 6 months after the member dies, then zero.

It was a lovely “hack,” to just let those CPF funds stay in the decedent’s account. The government closed that loophole only recently.
I only questioned your assumption 'some well to do CPF members used to do' in relation to deferring of CPF Life payout which has yet to commence.
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Old 18-02-2018, 01:19 AM   #70
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If a bucket of money is safe and growing nicely, and if you don't need it or even particularly desire anything, sure, let it ride, at any age. Use it for heirs, philanthropy, or some of both.

Not complicated.
Not so in JL's uncle case. His uncle is able to take out CPF Life payout to channel into his RA and there is no good sense to defer payout.
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Old 18-02-2018, 07:31 AM   #71
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Before or after 65, one is allowed to make VC either to 3 accounts (allocated to OA SA and MA) or to MA only (with tax relief), subject to annual limit. MA will overflow to SA/OA.

One is also allowed to top up one's RA, regardless of age, subject to prevailing FRS limit. Note VC is not the same as TU.
Yes, I understand.

After 55, you can't seem to top up the SA (i.e. RSTU automatically tops up RA instead of SA). So my question is will VC allocates the funds to SA or RA?

I ask because BBCWatcher suggested that money in SA is withdrawable (whereas money in RA is not).
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Old 18-02-2018, 08:49 AM   #72
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His uncle is able to take out CPF Life payout to channel into his RA and there is no good sense to defer payout.
Why would he ever rationally do that (with the assumptions noted)? It requires effort, and surely the financial math is unfavorable versus simply deferring.

It’s a moot issue for this uncle because it seems he does need the money sooner rather than later, and that he wouldn’t plow the money (back) into his RA because he’d instead be bolstering his emergency reserve funds.
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Old 18-02-2018, 09:17 AM   #73
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Yes, I understand.

After 55, you can't seem to top up the SA (i.e. RSTU automatically tops up RA instead of SA). So my question is will VC allocates the funds to SA or RA?

I ask because BBCWatcher suggested that money in SA is withdrawable (whereas money in RA is not).
VC always go into 3 accounts, ie OA/SA/MA. If MA is max, it will overflow into SA if SA is not max yet, otherwise it overflows into OA.

RA can only receive monies via topups if the ERS (max) limit is not met yet (current rules)

Monies in OA and SA can be withdrawn anytime, any amount.

Monies in RA can only be withdrawn via mthly payouts after u start payouts from CPF Life.
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Old 18-02-2018, 09:18 AM   #74
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VC always go into 3 accounts, ie OA/SA/MA. If MA is max, it will overflow into SA if SA is not max yet, otherwise it overflows into OA.

RA can only receive monies via topups if the ERS (max) limit is not met yet (current rules)
Thanks maple96! This is really helpful =)
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Old 18-02-2018, 09:22 AM   #75
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Why would he ever rationally do that (with the assumptions noted)? It requires effort, and surely the financial math is unfavorable versus simply deferring.

It’s a moot issue for this uncle because it seems he does need the money sooner rather than later, and that he wouldn’t plow the money (back) into his RA because he’d instead be bolstering his emergency reserve funds.
To me, it is very simple maths.

If your monies are in CPF Life, it is better to start payout early as interest earned on CPF Life premiums belongs to the pool. U will only get to enjoy it if you live beyond 90+

So it is common sense for his uncle to start payout so he can earn interests which belongs to him!
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