About CPF life premium

[BBCWatcher]

Just curious, after 55.. retirement account FRS . Can you like treat it like a bank withdrawal account for the fund in your OA.. like today draw 100 , 3 days later.. draw another 100.. i meant what's the withdrawal process.. can do it online ? and does it approve instantly ?

Yes, your OA effectively turns into an on demand savings account, albeit with (re)deposit limits. If you want to withdraw $100 on Thursday and $100 on Friday, you can.

That means once SA reach FRS before 55, topup will only be from the mandatory contribution specifically to SA and SA annual bonus.

It’s not only compulsory contributions. A portion of “all 3 account” Voluntary Contributions (“VC3A”) will also flow into your Special Account.

 

[evildoer]

Thank you, so much to prepare for..

less than 100 months to go to reach 55.. only do my research on CPF recently.. and find out i need to do cash top up to reach FRS which i am monthly doing .

I am Single have a flat that is currently rent out (Whole unit) but it's approaching 50 years... i see i have to return close to 300k back to CPF. if i sold my flat after i am 55 and if i have FRS using Special account. i can use the money to next flat or withdraw the sale proceed. the returning to CPF after 55 is like pointless right ?

 

[BBCWatcher]

if i sold my flat after i am 55 and if i have FRS using Special account. i can use the money to next flat or withdraw the sale proceed. the returning to CPF after 55 is like pointless right ?

If you sell your flat when you're age 55+ and have met the Full Retirement Sum in your Retirement Account then it's up to you whether you want to return funds to your CPF Ordinary Account or not. Your choice will probably chiefly depend on how attractive a 2.5% interest earning account is at that future point in time.

 

[Potent]

Yes, your OA effectively turns into an on demand savings account, albeit with (re)deposit limits. If you want to withdraw $100 on Thursday and $100 on Friday, you can.

It’s not only compulsory contributions. A portion of “all 3 account” Voluntary Contributions (“VC3A”) will also flow into your Special Account.

Given the interest rates are falling, it's. Possible to do self topup to cpf oa for 2.5% interest, after 55?

 

[reddevil0728]

Given the interest rates are falling, it's. Possible to do self topup to cpf oa for 2.5% interest, after 55?

Never directly.

even before 55.

it’s via vc3a

 

[alanchia67]

Given the interest rates are falling, it's. Possible to do self topup to cpf oa for 2.5% interest, after 55?

Wait till next year Jan to collect your CPF OA interest? Or do you prefer to start investing and collect returns sooner?

Anyway, VC3A is the only way. Not only to CPF OA.
https://www.cpf.gov.sg/service/article/can-i-voluntarily-top-up-to-my-ordinary-account-only

 

[BBCWatcher]

Given the interest rates are falling, it's. Possible to do self topup to cpf oa for 2.5% interest, after 55?

Wait till next year Jan to collect your CPF OA interest? Or do you prefer to start investing and collect returns sooner?

I wouldn't call CPF OA "investing" as such. I think of it as "savings." The difference in terminology is really whether there's any material risk to principal and (relatedly) whether the money can generate a decent or better yield at least over the long term. OA is principal guaranteed by the government but also predictably low yielding (2.5% p.a. floor rate, very unlikely to go higher).

Anyway, VC3A is the only way. Not only to CPF OA.
https://www.cpf.gov.sg/service/article/can-i-voluntarily-top-up-to-my-ordinary-account-only

An "all three account" Voluntary Contribution ("VC3A") can be a good way to get money into CPF. If you're age 55+, have funded your Retirement Account at least to the Full Retirement Sum (or at least to the Basic Retirement Sum with property pledge/charge), and your MediSave Account is pegged at the Basic Healthcare Sum, then 100% of your VC3A dollars will land in OA. If you're self-employed then you're potentially eligible for tax relief, too. VC3As must fit within the CPF Annual Limit ($37,740).

Once you've exhausted your VC3A option you may still be able to deposit funds in OA if you repay OA dollars used for housing (or for education, although that's less common and obligatory anyway).

There's yet another way to get some "extra" dollars into OA if you wish. Assuming again that your RA has reached at least the FRS (or BRS with property pledge/charge) and your MA is at the BHS, your MA interest will spill over into OA every December 31st. Also, if you're willing to keep your MA pegged at the BHS you can do this:

1. Use MA for qualified medical spending that you would otherwise pay in cash (i.e. the medical care is something you'd ordinarily do no matter how you pay for it);
2. Fill your MA back up to the BHS using a Voluntary Contribution. This "VCMA" may be eligible for tax relief.
3. File an insurance claim.
4. When your insurance carrier pays your claim, it will repay your MediSave Account. However, because your MA has reached the BHS this amount will actually spill over into your OA. The net effect is that you've kept your MA balance the same but increased your OA balance. There's a cost to do this, though: 1 month of lost MA interest on these dollars. Also, when you use MediSave for medical spending you don't collect any credit card points or rebates (which you can sometimes do if you pay cash).

Don't forget that you can always add funds to a CPF Retirement Account as long as there's any room below the current Enhanced Retirement Sum. That can be using cash and/or OA transfers (including OA transfers from qualified family members). Every time the ERS is raised there's room below the new ERS. RAs currently earn 4.0% interest, not merely 2.5%. And RA feeds into a lifetime retirement income stream.

 

[royalmix]

Given the interest rates are falling, it's. Possible to do self topup to cpf oa for 2.5% interest, after 55?

Our CPF World has changed from 2025!

If you have max your MA at BHS and RA (FRS), whatever you voluntary contribute will all go to OA, if you have the limits (max 37740 with no mandatory employment income)

( I topup $20 to OA every week to get $3 cashback! )

 

[daveteo88]

According to CPF website about the CPF life premium
“Your monthly payouts will first be paid from your CPF LIFE premiums. When your CPF LIFE premium is depleted, you will continue to receive the monthly payouts from the pooled interest that has been accumulated, no matter how long you live.”

My doubt is:
The CPF LIFE premium is the amount I deposit when purchase the CPF LIFE policy at 55 or is the amount plus interest accumulated at 65?

For example:
55 - deposit 200k
65 - with interest, 200k is become 300k

If I start receiving 1k per month after 65 for 10 years and pass away. My beneficiaries will receive the remaining 180k (*300k - 120k)?

In summary, I’m still benefit for the interest between 55 to 65. But interest earn after 65 is go to the common pools to share across the cpf members.

Your last para shd be correct. Rich ppl like you shd help poor ppl like me. The interest go to common pool is a good idea.

 

[evildoer]

i don't know about the pool interest

i think it's something to do with the 3 plans.. standard , basic and escalating..

like if u are on standard plan.. you payout remain constant all your life.. something like after cpf life kick start.. there wouldn't be interest on retirement account anymore.. like if u pass on the remaining will be bequest to your beneficiary.. but there is an age, i cant remember it's 80+ .. u will left with no cpf left to bequest. because your cpf life premium have outdrawn.

i think in basic plan.. u get lower monthly payout. but i think u still enjoy some interest in the pool.. when u pass on even at 90 , u can still have something to leave behind

 

[evildoer]

i read somewhere recently there is a changes.

Few years back , they did not close the special account. so right before they reach 55. people used to use their special account to short term investment and empty their special account. They do this so when retirement account is created.. it will force the system to take the ordinary account balance (the system will prioritize the special account first ) to fill the FRS. once it's done, the investment fund returned to special account .. so they enjoy higher interest.

 

[alanchia67]

i read somewhere recently there is a changes.

Few years back , they did not close the special account. so right before they reach 55. people used to use their special account to short term investment and empty their special account. They do this so when retirement account is created.. it will force the system to take the ordinary account balance (the system will prioritize the special account first ) to fill the FRS. once it's done, the investment fund returned to special account .. so they enjoy higher interest.

Yeah this is implemented this year.

Before that, I have both SA and RA at 4% I think. Didnt bother to invest anything until this year since SA is gone.

 

[evildoer]

Yeah this is implemented this year.

Before that, I have both SA and RA at 4% I think. Didnt bother to invest anything until this year since SA is gone.

i really hope the young can pay more attention to their special account, with the year by year increase.. maybe it's not so possible to fill to FRS without self top up, just by employment contribution.. unless u are willing to transfer from OA

 

[BBCWatcher]

i really hope the young can pay more attention to their special account, with the year by year increase.. maybe it's not so possible to fill to FRS without self top up, just by employment contribution.. unless u are willing to transfer from OA

Good point! If you make these assumptions:

• Start work on your 25th birthday;
• Starting salary of $3,000 per month ($39,000 p.a. assuming a 13th month bonus);
• 3% per year salary increases;
• Zero unemployment (i.e. 360 months of contributions);
• Basic and Full Retirement Sums increase by 3% per year;
• Only compulsory Special Account contributions (no cash top ups or OA to SA transfers);
• No "spillovers" from MediSave;

then this hypothetical worker will end up with approximately the Basic Retirement Sum in his/her Special Account just before his/her 55th birthday. That's only half the Full Retirement Sum in this scenario.

OA to SA transfers, SA top ups, and MA Voluntary Contributions (to drive "spillover" contributions into SA) can make a huge difference. The earlier, the better to win more bonus interest earlier and to allow more compounding time. Obviously higher employment income helps too, although you only have partial influence over your salary trajectory.

 

[evildoer]

Good point! If you make these assumptions:

• Start work on your 25th birthday;
• Starting salary of $3,000 per month ($39,000 p.a. assuming a 13th month bonus);
• 3% per year salary increases;
• Zero unemployment (i.e. 360 months of contributions);
• Basic and Full Retirement Sums increase by 3% per year;
• Only compulsory Special Account contributions (no cash top ups or OA to SA transfers);
• No "spillovers" from MediSave;

then this hypothetical worker will end up with approximately the Basic Retirement Sum in his/her Special Account just before his/her 55th birthday. That's only half the Full Retirement Sum in this scenario.

OA to SA transfers, SA top ups, and MA Voluntary Contributions (to drive "spillover" contributions into SA) can make a huge difference. The earlier, the better to win more bonus interest earlier and to allow more compounding time. Obviously higher employment income helps too, although you only have partial influence over your salary trajectory.

i ran a check if it's 3% annual increase .. the children born today .. their FRS by the time they reach 55 is 1.85m..

i should have know it earlier.. when young .. my dad used to complaint about CPF.. holding his money.. now he is glad

 

[BBCWatcher]

i ran a check if it's 3% annual increase .. the children born today .. their FRS by the time they reach 55 is 1.85m..
i should have know it earlier.. when young .. my dad used to complaint about CPF.. holding his money.. now he is glad

True, but if wages also go up by 3% per year (on average) then it's a wash. The future Full Retirement Sum could "feel" exactly like the current Full Retirement Sum (in wage terms).

Wages could go up by 3% per year based on inflation (2.5% on average let's suppose) and productivity gains (0.5% on average let's suppose). Obviously the CPF Annual Limit would also have to go up at some point(s).

 

[royalmix]

i really hope the young can pay more attention to their special account, with the year by year increase.. maybe it's not so possible to fill to FRS without self top up, just by employment contribution.. unless u are willing to transfer from OA

There is no need to stress yourself, as there is always policy risks! Like many people exploited the SA loophole and bang their retirement plans based on this. Then suddenly it is all gone!

One thing good is the Govt (not CPFB) do consider feedback seriously, but after years and years of deliberation and finally took the most drastic action to close SA! Most wonderful action they took to close the loophole, which is discriminatory! Wonderful cos no more discrimination to benefit the rich, can withdraw your OA interest and OA funds anytime without being blocked by SA, plus many many other benefits!

Even if you cannot meet FRS at 55 with your CPF funds, if your other sources of funds are working hard, you can still topup at 55 to makeup your FRS. But there is no need for you to topup, cos those who cannot meet have other "privileges" given to them by the Govt!

 

[BBCWatcher]

Here's another way you can boost your CPF Special Account at least during the first part of your working career: avoid more expensive hospitalization insurance.

In 2025 the Full Retirement Sum is $213,000 and the Basic Healthcare Sum is $75,500. Before age 50 a greater share of your compulsory CPF contributions is apportioned to MediSave than to your Special Account. If there are no MediSave withdrawals (or low MediSave withdrawals), you should hit the BHS well before you hit the FRS. At that point, when your MA is pegged at the BHS, the MA portion of your compulsory contributions (and VC3As) ends up in your Special Account until it reaches the FRS.

However, you won't reach the BHS as quickly, or you won't stay at the BHS as often, if you have more and bigger MediSave withdrawals. Let's suppose for example you have Great Eastern's Integrated Shield plan, and you pay for your base plan premiums from your own MediSave Account. What happens if you choose Great Eastern's private hospital plan ("P Plus")? You pay the highest premiums, of course. Currently once you reach age 30 (age 31 next birthday) Great Eastern's P Plus Integrated Shield plan will max out what you're allowed to spend from MediSave: $300 per year until age 40 then $600 per year until age 70. In contrast, Great Eastern's public hospital B1 ward plan ("B Plus") currently costs less than $100 per year until age 39, and then it remains below the MediSave $300/$600 withdrawal limits until age 66. The premium savings between P Plus and B Plus really add up.

Of course it's up to you whether you want to spend more (in both MediSave and cash) on hospitalization insurance.

 

[evildoer]

Here's another way you can boost your CPF Special Account at least during the first part of your working career: avoid more expensive hospitalization insurance.

In 2025 the Full Retirement Sum is $213,000 and the Basic Healthcare Sum is $75,500. Before age 50 a greater share of your compulsory CPF contributions is apportioned to MediSave than to your Special Account. If there are no MediSave withdrawals (or low MediSave withdrawals), you should hit the BHS well before you hit the FRS. At that point, when your MA is pegged at the BHS, the MA portion of your compulsory contributions (and VC3As) ends up in your Special Account until it reaches the FRS.

However, you won't reach the BHS as quickly, or you won't stay at the BHS as often, if you have more and bigger MediSave withdrawals. Let's suppose for example you have Great Eastern's Integrated Shield plan, and you pay for your base plan premiums from your own MediSave Account. What happens if you choose Great Eastern's private hospital plan ("P Plus")? You pay the highest premiums, of course. Currently once you reach age 30 (age 31 next birthday) Great Eastern's P Plus Integrated Shield plan will max out what you're allowed to spend from MediSave: $300 per year until age 40 then $600 per year until age 70. In contrast, Great Eastern's public hospital B1 ward plan ("B Plus") currently costs less than $100 per year until age 39, and then it remains below the MediSave $300/$600 withdrawal limits until age 66. The premium savings between P Plus and B Plus really add up.

Of course it's up to you whether you want to spend more (in both MediSave and cash) on hospitalization insurance.

i am too late already..it's the last lap (less then 10 years left).. i am not planning to work after 55.. at least not full time.. i gonna fill up my FRS. continue to collect rental and survive with it .

 

[DevilPlate]

i ran a check if it's 3% annual increase .. the children born today .. their FRS by the time they reach 55 is 1.85m..

i should have know it earlier.. when young .. my dad used to complaint about CPF.. holding his money.. now he is glad

Thats why im setting up Bitcoin reserves for my grandchildren.

Some say actual inflation is >3% and with global massive money printing, it could be worse in future.