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Is it possible to make CPF as a 2nd source of passive (income) after age 55....

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Old 08-05-2019, 09:29 AM   #1
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Is it possible to make CPF as a 2nd source of passive (income) after age 55....

Assuming FRS met with RA at 181K, MA met at 58k
With remaining OA at 150k and SA at 160k (after shielding).

What would be the best plan to work on?
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Old 08-05-2019, 10:41 AM   #2
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This is one possibility:

While the shield is still up, top up your RA to ERS with an additional 90k. This leaves you with $60k in OA which you can choose to withdraw as cash.

You will still get some interest from your cash account, but let's assume you get none, and you withdraw $2000 from there per month to spend. This will deplete in 2.5 years. After this depletes, you can start withdrawing about $2000 per month from your SA which will last you at least until age 66, after which you can start your CPF Life payout which should get you around $2300/month on standard plan for the rest of your life.
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Old 08-05-2019, 12:32 PM   #3
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This is one possibility:

While the shield is still up, top up your RA to ERS with an additional 90k. This leaves you with $60k in OA which you can choose to withdraw as cash.

You will still get some interest from your cash account, but let's assume you get none, and you withdraw $2000 from there per month to spend. This will deplete in 2.5 years. After this depletes, you can start withdrawing about $2000 per month from your SA which will last you at least until age 66, after which you can start your CPF Life payout which should get you around $2300/month on standard plan for the rest of your life.
Thanks tangent.
Was kind of toying with the idea to continue working even after 55, till 65.
If don’t get “pok”.

And have 2nd stream of income from CPF from 65 onwards.
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Old 08-05-2019, 01:29 PM   #4
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Correction on the withdrawal. One cannot choose to withdraw from the OA, the sequence of drawdown starts with the SA, and until that is depleted, will continue to draw down from the OA.
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Old 08-05-2019, 01:32 PM   #5
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If you intend to continue working until at least 65, then I would still top up RA to ERS, and withdraw the remaining OA and put those into longer term investments. Once you retire, you can draw down slowly on the investments to supplement the income you get from CPF Life.
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Old 08-05-2019, 01:33 PM   #6
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Correction on the withdrawal. One cannot choose to withdraw from the OA, the sequence of drawdown starts with the SA, and until that is depleted, will continue to draw down from the OA.

Already said it right there in the instructions, "While the shield is up".
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Old 08-05-2019, 01:45 PM   #7
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Actually, you can draw down on OA in some ways, before hitting SA. Assuming you have quite a decent balance in OA too, what you can do is to withdraw accrued interests first and not to touch OA/SA balances.

Do it just before 31 Dec and that way, your SA balance will not get depleted, as the sequence is accrued interest from SA, accrued interest from OA, new contribution, SA and then OA.

Correction on the withdrawal. One cannot choose to withdraw from the OA, the sequence of drawdown starts with the SA, and until that is depleted, will continue to draw down from the OA.
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Old 08-05-2019, 01:59 PM   #8
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I assumed you're in mid-40s, I was in your shoes before, doing all this planning.

The answer is certainly yes, and could be the primary source rather than secondary. But that's provided you put spare cash back into OA and that you find guaranteed 2.5% attractive.

Was kind of toying with the idea to continue working even after 55, till 65.
If don’t get “pok”.

And have 2nd stream of income from CPF from 65 onwards.

Last edited by romeo88; 09-05-2019 at 09:50 AM..
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Old 08-05-2019, 02:21 PM   #9
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Assuming FRS met with RA at 181K, MA met at 58k
With remaining OA at 150k and SA at 160k (after shielding).

What would be the best plan to work on?
For me it will definitely be

FRS at 55,
BRS at 65
withdrawal of 20% at 65
Reinvest monies into RA at 65, without premium till 90
Drawout from RA first
SA remain as backup funds
Enjoy life

Will guarantee a fixed bequest in SA, maintain same level of payout as FRS or even ERS without the need for paying more 10-20% premium
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Old 08-05-2019, 02:49 PM   #10
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I must have missed it. Reinvest, how ?

Reinvest monies into RA at 65, without premium till 90
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Old 08-05-2019, 02:59 PM   #11
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I must have missed it. Reinvest, how ?
Have clarify that you can top-up after your payout to prevailing ERS. There is 2 ways. Copy from the other thread post 55 monthly withdrawal from CPF , page 21

1) Can still do cash top up to RA after whatever withdrawals/payouts?
Short answer is yes.
The cash top up limit is based on the following formula:
current ERS - (RA balance - RA interest earned + amount withdrawn)

Assuming if ERS increased $7500 every year, member can top up ERS to RA at 55, and then can top up $7500 to RA every year until up lorry.

Source:
https://www.cpf.gov.sg/members/FAQ/s...jfaqid=2188778

2) Top up after PEA start, will the top-up amount be subject to 10%-20% premium?
Short answer is no.
You can choose to keep the top up monies in the RA to receive additional monthly payout, OR choose to buy additional premium for Cpf Life (if before 80 years old).

Source:
https://www.cpf.gov.sg/members/FAQ/s...jfaqid=2186389
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Old 08-05-2019, 03:01 PM   #12
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Have clarify that you can top-up after your payout to prevailing ERS. There is 2 ways. Copy from the other thread post 55 monthly withdrawal from CPF , page 21

1) Can still do cash top up to RA after whatever withdrawals/payouts?
Short answer is yes.
The cash top up limit is based on the following formula:
current ERS - (RA balance - RA interest earned + amount withdrawn)

Assuming if ERS increased $7500 every year, member can top up ERS to RA at 55, and then can top up $7500 to RA every year until up lorry.

Source:
https://www.cpf.gov.sg/members/FAQ/s...jfaqid=2188778

2) Top up after PEA start, will the top-up amount be subject to 10%-20% premium?
Short answer is no.
You can choose to keep the top up monies in the RA to receive additional monthly payout, OR choose to buy additional premium for Cpf Life (if before 80 years old).

Source:
https://www.cpf.gov.sg/members/FAQ/s...jfaqid=2186389
My cue will be to topup only after first payout and topup to the ERS amount you want if you think you will not live pass 90. The additional topup will only last you till 90.(that is why it does not include the 10-20% premium)
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Old 08-05-2019, 03:34 PM   #13
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That's it, of course. For me, when I start LIFE at 65, it's all about withdrawal (collection) and no more topping up.

So yes as you've seen in my other post, I'm planning to top up till 65 and that's it.

Assuming if ERS increased $7500 every year, member can top up ERS to RA at 55, and then can top up $7500 to RA every year until up lorry.
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Old 08-05-2019, 03:49 PM   #14
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My cue will be to topup only after first payout and topup to the ERS amount you want if you think you will not live pass 90. The additional topup will only last you till 90.(that is why it does not include the 10-20% premium)
Romeo already topup to ERS at 55, so he cannot follow your cue, he wants to earn max interest from day 1.
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Old 08-05-2019, 05:26 PM   #15
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Romeo already topup to ERS at 55, so he cannot follow your cue, he wants to earn max interest from day 1.
Lol, so I see, nothing wrong with that.
My cue is for me lor, max interest is a good offer
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