2nd Sweep @ 65 by CPF

[reddevil0728]

The no top-up part mentioned "monthly payout amount depends on RA balance".

The 2nd sweep part "wants to help with higher monthly payout amount by transferring SA/OA to RA".

Does one not prefer to have savings remain in SA/OA and be able to withdraw any amount at any time?

Btw, top-ups after 55 is by choice with strings attached.

That’s not the objective of CPF

 

[BBCWatcher]

The no top-up part mentioned "monthly payout amount depends on RA balance".

Monthly payouts certainly do depend on one's RA balance.

The 2nd sweep part "wants to help with higher monthly payout amount by transferring SA/OA to RA".

That's certainly correct too: higher RA balances result in higher monthly retirement payouts.

Does one not prefer to have savings remain in SA/OA and be able to withdraw any amount at any time?

Whether one prefers that or not, there are certain facts:

1. Lump sum cash withdrawals from SA and OA are generally not permitted before age 55.

2. Lump sum cash withdrawals from SA and OA are limited from age 55 onward unless and until one's Retirement Account is funded to the Full Retirement Sum (or Basic Retirement Sum with property pledge/charge). If you've set aside at least the FRS (or BRS with property pledge/charge) then you can withdraw every penny from SA and OA (in that order) on or after your 55th birthday, if you wish.

The second sweep, if needed, doesn't change these basic facts that the CPF Board documents rather well, I think.

Btw, top-ups after 55 is by choice with strings attached.

The CPF Board is correctly stating that top ups are never required. But that's a separate fact from other facts.

 

[fr33d0m]

The no top-up part mentioned "monthly payout amount depends on RA balance".

The 2nd sweep part "wants to help with higher monthly payout amount by transferring SA/OA to RA".

Does one not prefer to have savings remain in SA/OA and be able to withdraw any amount at any time?

Btw, top-ups after 55 is by choice with strings attached.

If the person has not fulfilled the FRS or BRS + property pledge, money in OA/SA can’t be withdrawn without triggering a sweep to fulfill FRS or BRS + property pledge.

 

[BBCWatcher]

If the person has not fulfilled the FRS or BRS + property pledge, money in OA/SA can’t be withdrawn without triggering a sweep to fulfill FRS or BRS + property pledge.

Well, that's a little too strong. You can get some lump sum cash out — some. It's up to $5,000 available for lump sum withdrawal from age 55 and up to 20% (inclusive of the up to $5,000) available from age 65. But yes, there are significant SA/OA withdrawal restrictions if you haven't set aside at least the FRS (or BRS with property/pledge charge). That's been true for a LONG time, and nothing is changing in that respect. What is changing is when the second sweep (if a second sweep is needed) occurs. Today it's on your 65th birthday. Starting next year it won't necessarily be that but will instead be just before payout start whenever that occurs. (The default payout starting age is upon reaching age 70.)

 

[elvintay07]

I think this applies to those who didn’t meet FRS at 55.

But then again. CPF change every minute. Treat it as bonus if you lucky to get it back.

Actually no problem one la. As long as you meet FRS before age 55, then no need because there will be a 4% compounded interest. A lot of ppl in their 40s already have SA between FRS and ERS. Every year when they continue to work, I think there will contribution of another $4800 or $5200.

 

[sohguanh]

that is fake news.
If only the tikopek go Batam.
Why they punish All the lao grannies also

Simple it is in their interest to hold more monies so can invest get more returns. The lao grannies too bad collateral damage lor. The lao tiko fall into their trap to allow them good excuse to come out new pattern hold monies longer

 

[reddevil0728]

Simple it is in their interest to hold more monies so can invest get more returns. The lao grannies too bad collateral damage lor. The lao tiko fall into their trap to allow them good excuse to come out new pattern hold monies longer

You are not addressing what poster is saying about your post being fake news

 

[BBCWatcher]

These conspiracy theories are hilarious. Yes, of course the government is eager to pay 4.0% interest (plus bonus interest, plus tax relief effects, plus matching funds, plus other bonuses) to raise capital for their investments when the very same government can issue 30 year bonds at (checks the current interest rate...) 2.64%. Because who wouldn't want to pay a way above market interest rate to raise investment capital?

These beliefs just aren't rational.

By the way, is there any other government that allows any lump sum withdrawals from its pension/social security system? The two other systems I'm most familiar with are the United States (U.S. Social Security) and Japan (National Pension). U.S. Social Security has no lump sum withdrawal provisions whatsoever. Japan's NP has only one as far as I know: in certain cases departing foreign workers can withdraw their contributions. Singapore's Central Provident Fund Board has LOTS of lump sum withdrawal provisions:

1. From age 55: all "excess" retirement dollars above the Full Retirement Sum (or above the Basic Retirement Sum with property pledge/charge).

2. From age 55: in addition, up to $5,000.

3. From age 65: in addition, up to 20% (inclusive of #2).

4. From age 65 (possibly earlier?): 100% of retirement dollars when replaced with a comparable life annuity (private pension plan).

5. Any age: hardship withdrawals, such as medical grounds.

6. Any age: exiting the system (termination/loss of Singaporean citizenship, termination/loss of Singapore Permanent Residence, departure from the immediate region).

....But OK, if you want to complain about what are globally most generous withdrawal provisions, I suppose you can complain about practically anything. Your choice I guess.

 

[balagan]

Age 55 and above, one can top-up via CPF transfer from OA to RA (up to prevailing ERS), not necessarily by cash only.

 

[BBCWatcher]

Age 55 and above, one can top-up via CPF transfer from OA to RA (up to prevailing ERS), not necessarily by cash only.

If self to self then this transfer will draw from SA first and won't draw from OA until SA is depleted. When it's a transfer from a qualified family member then it can be OA to RA, for example Spouse #1's OA to Spouse #2's RA.

 

[balagan]

Yes, top-up from SA first, then OA. Thanks for pointing out.

 

[DelinquentXX]

Just to check.. if I do a property pledge with brs, if I died.. and the cpf amount has been exhausted. My suriving children will be left without a house?

If the person has not fulfilled the FRS or BRS + property pledge, money in OA/SA can’t be withdrawn without triggering a sweep to fulfill FRS or BRS + property pledge.

 

[fr33d0m]

It is a pledge, not a sale. The house is still yours to pass to your children. Just when you sell your house before you die, you have to top up CPF to FRS 1st before getting any cash.

Just to check.. if I do a property pledge with brs, if I died.. and the cpf amount has been exhausted. My suriving children will be left without a house?

 

[BBCWatcher]

It is a pledge, not a sale. The house is still yours to pass to your children. Just when you sell your house before you die, you have to top up CPF to FRS 1st before getting any cash.

Unless you're swapping houses (for example "downsizing"), in which case you may be able to swap property pledges/charges.

 

[Andrew833]

I think it's very clear cut.
If you have FRS or BRS with property pledge, you can withdraw SA and OA at 55. (after RA is form).
If you have FRS or BRS with property pledge, at 65 you can choose to withdraw 20% from your RA.

Those in- between $5,000 to FRS or BRS with property pledge, will be different case.
I think the 2nd sweep is targeted this group of people, to increase their monthly payout at 65.

 

[iMac]

CPF are very good at this....their rules are very gray and cloudy...it's up to individual to interpret.