Contribution to Parents CPF

[leo leon]

really need help and advise for cpf monthly payout for parents to get more money to survive

 

[BBCWatcher]

really need help and advise for cpf monthly payout for parents to get more money to survive

There's no magic, I'm afraid. Putting more money in their RA (cash, with a tax deduction if you qualify), and their buying more CPF LIFE annuity, is how their monthly payout can increase. CPF LIFE Standard pays more but offers less (or no) bequest.

At their age 81 you also ought to consider whether simply giving them cash directly is better. CPF should be able to tell you how much their monthly payout would increase for a given amount of RA top up. You can compare that with just giving cash to them every month.

Reducing current and future expenses has exactly the same financial impact -- one dollar of spending avoided is one less dollar of income required -- so of course it's worth looking for those opportunities.

If they have home equity they can tap then that's a potential option.

 

[henrylbh]

What about selling her flat and use proceeds to buy herself a 15y flexi flat and her son the 40y flexi flat. If she sells her flat, I don't she need to put back any money in her RA or little as the min sum for her cohort was $30k.

 

[BBCWatcher]

my grandmother is 90 year old and she would like to sell some lease back to hdb for her hdb flat, hdb has told her that she needs to put in $141,000 of the proceed into her retirement account and receive a monthly payout. She is not on cpf life.

She should ask what her CPF LIFE monthly payout would be, probably under CPF LIFE Basic. I think it's going to be a higher monthly amount. If that works, great. My understanding is that the older Retirement Sum Scheme has to be paid out over 20 years, until she's 110. CPF LIFE is a life annuity, and actuarially it should have a higher payout, if my understanding is correct.

Due to some urgent family needs, she needs to use the proceed to buy another 2-rm flexi flat 40 year lease for son, however the cash payout portion is not enough and she cannot wait for the monthly payout to accumulate.

That sounds awfully suspicious, for what it's worth. The rules are what they are in part to protect the elderly, sometimes from their own families. I can't imagine what "urgent family need" would require buying a leasehold instead of renting. Either way, there's a roof over their heads, so how does this compute? I can't figure it out.

May I know if is there any other way that she can take out a lump sum portion of the $141,000 that is going to put into her retirement after the completion of the lease buy scheme?

If she is receiving another pension or annuity, she may be able to apply for a waiver. If she is not receiving such income, potentially she could buy NTUC's private sector annuity to replace that income, then apply for a waiver. At age 90 NTUC probably wouldn't charge very much -- only part of that $141,000.

 

[henrylbh]

She should ask what her CPF LIFE monthly payout would be, probably under CPF LIFE Basic. I think it's going to be a higher monthly amount. If that works, great. My understanding is that the older Retirement Sum Scheme has to be paid out over 20 years, until she's 110. CPF LIFE is a life annuity, and actuarially it should have a higher payout, if my understanding is correct.

You sure she must or can join CPF Life. If not, with 141k in her RA, she would be receiving monthly payout of about 2,500.

 

[elnewbie]

Agreed. There's no point for a 90 year old to join CPF Life.

You sure she must or can join CPF Life. If not, with 141k in her RA, she would be receiving monthly payout of about 2,500.

 

[henrylbh]

Agreed. There's no point for a 90 year old to join CPF Life.

I understand that to be eligible to join CPF Life, one of the conditions is the members must not be more than 80yo.

 

[henrylbh]

I am wondering how could the son who is above 55 still can't afford a 40y flexi flat himself. Or why the son can't stay with the mother instead of she selling part of the lease to support her son instead of the son supporting her.

She can also will her flat to the son and most probably that's better than buying a 40y flexi flat that has no value and can't be rented out ... unless the mother is afraid that the son upon inheriting the flat ultimately will sell the flat and become homeless and penniless.

 

[elnewbie]

Exactly. Sometimes as parents, there's a limit to what a parent can do for their child. Beyond this, the parent has to put their own interest ahead.

I am wondering how could the son who is above 55 still can't afford a 40y flexi flat himself. Or why the son can't stay with the mother instead of she selling part of the lease to support her son instead of the son supporting her.

She can also will her flat to the son and most probably that's better than buying a 40y flexi flat that has no value and can't be rented out ... unless the mother is afraid that the son upon inheriting the flat ultimately will sell the flat and become homeless and penniless.

 

[BBCWatcher]

I understand that to be eligible to join CPF Life, one of the conditions is the members must not be more than 80yo.

Unfortunately, that's correct.

....There is a point in joining CPF LIFE at age 90 (if it were possible). The monthly payout would be quite large. Actuarial life expectancy at age 90 is less than at age 65. It's not 35 years less, but it's less. So the monthly payouts on a life annuity are a lot higher, roughly 2.5 times higher compared to a 20 year annuity, it looks like.

But it's not possible, so forget that idea.

However, I think it's possible to buy a guaranteed life annuity that provides a monthly benefit at least equal to the Retirement Sum Scheme's monthly benefit, then opt out of the Retirement Sum Scheme. That should cost a lot less than $141K. (Get a quote from NTUC.) But I still don't recommend it.

Upon reflection, I can think of one "urgent" situation, but it's not genuinely urgent. If the son is approaching age 55 and doesn't have the Full Retirement Sum (FRS) in his CPF Special Account, there's going to be an automatic sweep from his Ordinary Account into his new Retirement Account. If he was counting on tapping his OA to buy a HDB leasehold, then that's not going to work.

But there's another solution to that problem, I think. What he could do, before he turns 55, is to take his Ordinary Account and allocate as much as he can to the CPF Investment Scheme, and use CPFIS to buy a Singapore Government Security (SGS). The 5 and 10 year bonds are coming up for sale within the next two months as I write this, and those would be good choices. Then, when the RA "sweep" occurs, the CPFIS funds stay put. At least, that's my understanding. Can you then tap CPFIS funds for housing? I don't know -- I'm still thinking this maneuver through. (Does anybody know if that would work here?) But no, the RA "sweep" is not "urgent." That isn't a life or death problem, and it really needs to be something dire before it makes sense to ask a 90 year old mother to raid her modest leaseholding wealth.

Of course if the son's mother leaves a bequest to the son, that bequest could support a future housing outlay. It sounds like the son is trying to get an "advance" on a bequest, and that's a no no, for many reasons.

 

[henrylbh]

Unfortunately, that's correct.

....There is a point in joining CPF LIFE at age 90 (if it were possible). The monthly payout would be quite large. Actuarial life expectancy at age 90 is less than at age 65. It's not 35 years less, but it's less. So the monthly payouts on a life annuity are a lot higher, roughly 2.5 times higher compared to a 20 year annuity, it looks like.

But it's not possible, so forget that idea.

However, I think it's possible to buy a guaranteed life annuity that provides a monthly benefit at least equal to the Retirement Sum Scheme's monthly benefit, then opt out of the Retirement Sum Scheme. That should cost a lot less than $141K. (Get a quote from NTUC.) But I still don't recommend it.

Upon reflection, I can think of one "urgent" situation, but it's not genuinely urgent. If the son is approaching age 55 and doesn't have the Full Retirement Sum (FRS) in his CPF Special Account, there's going to be an automatic sweep from his Ordinary Account into his new Retirement Account. If he was counting on tapping his OA to buy a HDB leasehold, then that's not going to work.

But there's another solution to that problem, I think. What he could do, before he turns 55, is to take his Ordinary Account and allocate as much as he can to the CPF Investment Scheme, and use CPFIS to buy a Singapore Government Security (SGS). The 5 and 10 year bonds are coming up for sale within the next two months as I write this, and those would be good choices. Then, when the RA "sweep" occurs, the CPFIS funds stay put. At least, that's my understanding. Can you then tap CPFIS funds for housing? I don't know -- I'm still thinking this maneuver through. (Does anybody know if that would work here?) But no, the RA "sweep" is not "urgent." That isn't a life or death problem, and it really needs to be something dire before it makes sense to ask a 90 year old mother to raid her modest leaseholding wealth.

Of course if the son's mother leaves a bequest to the son, that bequest could support a future housing outlay. It sounds like the son is trying to get an "advance" on a bequest, and that's a no no, for many reasons.

No need to say so much. It's almost certain the son is above 55 if not well above. It appears the son is dependant on his 91yo mother to consider those points you brought up. During her era, most gave birth at a very young age. If she had given birth to him at age 18, the son would be above 70yo

 

[BBCWatcher]

Apologies i should explain further that her son, my uncle, is aged 55 single, no or not much cpf, unemployed with mental illness as i understand is depression and also in and out jail every now and then. He has been living with my grandmother for years until recently that he caused major threat and damage to her house. That is why he needs to be housed in another place and he has try renting a room, but his state and character has caused problems there as well.

OK, understood so far. That's a tough situation.

My grandmother is not eligible for cpf life and indeed the monthly payout is about $2500 given given her age. But we wish to house him asap in 1to2months time when he is out of jail. The cash proceeds may not be in enough to buy 2rm flexi 40year lease.

This is the part I don't understand well, the immediate purchase motivation. What happens if he is institutionalized again 3 months after moving into a 40 year leasehold? Yes, I understand that it's difficult for an ex-offender to rent his own apartment, "unsupervised." The HDB Public Rental Scheme, for example, would require him to share a rental unit with another single tenant. But it still seems awfully brave to take a gamble on buying a 40 year leasehold until he can demonstrate some measure of stability, for at least 12 months.

Have you looked into Halfway Houses yet, and checked with the Yellow Ribbon Project for advice?

To be clear, I'm not recommending the NTUC annuity option. It'd probably be difficult to pull off that maneuver anyway since somebody would need to buy the annuity, first. That'll be a relatively large amount of money -- tens of thousands of dollars anyway.

Maybe somebody has more suggestions. Thanks for sharing the background.

 

[LiteHouse]

I am wondering how could the son who is above 55 still can't afford a 40y flexi flat himself. Or why the son can't stay with the mother instead of she selling part of the lease to support her son instead of the son supporting her.

She can also will her flat to the son and most probably that's better than buying a 40y flexi flat that has no value and can't be rented out ... unless the mother is afraid that the son upon inheriting the flat ultimately will sell the flat and become homeless and penniless.

My understanding is that we cannot will a HDB flat to another family member upon death. Need to change the names in the lease agreement with HDB while all the parties are alive.

 

[henrylbh]

Hi all

Apologies i should explain further that her son, my uncle, is aged 55 single, no or not much cpf, unemployed with mental illness as i understand is depression and also in and out jail every now and then. He has been living with my grandmother for years until recently that he caused major threat and damage to her house. That is why he needs to be housed in another place and he has try renting a room, but his state and character has caused problems there as well.

My grandmother is not eligible for cpf life and indeed the monthly payout is about $2500 given given her age. But we wish to house him asap in 1to2months time when he is out of jail. The cash proceeds may not be in enough to buy 2rm flexi 40year lease.

Thanks for the advice on ntuc annuity, will check out. Look forward for more kind advices thank you very much.

Don't waste time to check on ntuc annuity. Neither does seeking advice on CPF retirement account helps in such grave situation. It's not so much a financial problem.

I agree with you that your uncle should be separated from his mother for her own good and safety. Buying a flat for her son will not help. He will still come back to her as he has no means of taking care of himself. Then what happens to the son after she is gone will also be her concern.

Sadly it's difficult to offer any solution on how to deal with the son. May be your grandma should rent out or better still, sell her flat and then stay with one of her children and don't let the son to visit her. Use the proceed to give her son monthly allowance and it's up to him to live his own life. Only allow the son to visit her when it is certain that the son has changed for the better.

Calculate and keep enough savings to continue giving monthly allowance to her son till he is 65 and for herself and dump the excess into her RA and nominate it to go to her son's RA. In case she needs more, she can commence drawing on her RA on monthly basis. Else her RA will go to her son who is restrained from squandering the bequeath.

 

[BBCWatcher]

Here's what HDB says.

There are some HDB requirements if the unit is to be retained. The inheritor still needs to meet HDB eligibility rules. As a simple example, if the will provides that an Employment Pass holder inherit the unit, the leasehold must be sold with the proceeds distributed to the heir.

 

[henrylbh]

My understanding is that we cannot will a HDB flat to another family member upon death. Need to change the names in the lease agreement with HDB while all the parties are alive.

Any HDB owner can will his flat to anyone body. Only issue is whether the beneficiary is eligible to keep the flat. If not, it has to be sold and the proceed will go to the beneficiary.

I have a flat of my own and still under MOP. My father also has a flat under MOP and he has will it to me solely. If he uplorry, I need to dispose his flat and keep the proceed But HDB mentioned in writing in response to my query that it can't be sold in the open market if it's still under MOP And I can't s sell mine to take over his as mine is also under MOP My only hope is my father survive beyond my MOP which got another 2 years while his is 5 years to go.

 

[orange_sky]

I know I'm going get flamed for this but it may be worthwhile to seek help from your MP for such special circumstances

 

[lazybee]

Hi guys, it is quite urgent, but I like to ask

- can we top up to my parent's MA account and enjoy tax rebate?

My parent's MA account is depleting, and I would want to top up with cash. The MA account can be used for deductible and co-insurance which my dad may need for his treatment.

 

[LiteHouse]

Hi guys, it is quite urgent, but I like to ask

- can we top up to my parent's MA account and enjoy tax rebate?

My parent's MA account is depleting, and I would want to top up with cash. The MA account can be used for deductible and co-insurance which my dad may need for his treatment.

Short answer is no. You can't enjoy tax relief using the above method.

 

[lushiris]

How you can Pay for your Parents’ Medishield Life Premiums and Top Up your CPF Medisave for Tax Reliefs

is this relevant to you?