CPF after 55

[vsvs24]

I don't spend a lot. Surfing the Internet for news and interesting concepts, growing some plants or taking a walk in the park in the evening makes me quite happy already.

If insurance is not factored in and assuming that I no longer drive in my 60s and 70s, I only need about $1k at most for food ($600), public transport ($100), bills ($100) and miscellaneous ($200).

Once in a while can pamper yourself. We just try to extend the money as long as possible. Not totally don't withdraw.

辛苦了大半辈子，活在当下.

 

[vsvs24]

Waiting for the inevitable complaints about CPF shifting goalposts and comparisons against other annuities / retirement plans.

But this one is withdrawal sequence. Hard to argue. Maybe govt testing water. Do this small one first and see reaction.

But it is a reminder to those who don't consider liquidity that rules can change.

 

[vsvs24]

Base on recent letter from CPF posted by @vsvs24
At or after 55, if need money from your CPF;
1) Monthly contribution from SA then OA (if you still working)
2) Ever year Jan after interest credited, SA interest then OA interest.

If money still not enough, shield your SA again to withdraw your OA but $40K from SA will have to withdraw first.
More for last choice bah. While you shielding, no interest for that month too.

You read wrongly ? The CPF letter says SA contribution then SA balance, then OA contribution then OA balance.

 

[Andrew833]

You read wrongly ? The CPF letter says SA contribution then SA balance, then OA contribution then OA balance.

I read correctly, just retype it, easier to understand. Also keep it as a reference for myself.

 

[mcmlxxvi]

Means if after 55yo now, even if say I have 300K each in OA and SA, every Jan can only withdraw interest from SA and not even the OA interest.

 

[Okenba]

Means if after 55yo now, even if say I have 300K each in OA and SA, every Jan can only withdraw interest from SA and not even the OA interest.

Makes more sense than ever to just shield and withdraw all OA and only leave SA.
But if their intention is to 'force' people into OA so they pay less interest, then it should not be too long before they also address the issue of shielding.

 

[mcmlxxvi]

Makes more sense than ever to just shield and withdraw all OA and only leave SA.
But if their intention is to 'force' people into OA so they pay less interest, then it should not be too long before they also address the issue of shielding.

SA primary function is for retirement purposes. (https://www.income.com.sg/blog/why-cpf-sa-matters)
OA is for boosting income and housing (and building coffers).

So quite clear which direction govt wants the (young) people to contribute to....

 

[jeffong]

Am I correct that the funds in OA can be used to top-up the RA every year when the ERS limit goes up? If this is allowed, then I reckon that would be one way to utilize OA funds left in there while continuing to tap on SA interests every year.

 

[reddevil0728]

I think some expert can publish an entire book on CPF at 55 and it will sell well.

We don’t need an expert. We need a layman to simplify the system.

 

[Okenba]

Am I correct that the funds in OA can be used to top-up the RA every year when the ERS limit goes up? If this is allowed, then I reckon that would be one way to utilize OA funds left in there while continuing to tap on SA interests every year.

Whether withdrawing or moving funds to RA, priority will be SA first, then OA.
The exception is when you move your OA to your spouse's RA. That is allowed as a RA top-up.

 

[Andrew833]

Means if after 55yo now, even if say I have 300K each in OA and SA, every Jan can only withdraw interest from SA and not even the OA interest.

"While interest is earned every month, it is only credited into your CPF accounts to form part of the account balances at the beginning of each year, and withdrawable from then on."
From the letter posted; after interest is credited (Jan), you can withdraw the interest from OA and SA account. Will be SA first then OA bah.

 

[jeffong]

Whether withdrawing or moving funds to RA, priority will be SA first, then OA.
The exception is when you move your OA to your spouse's RA. That is allowed as a RA top-up.

Does that mean me and my wife can cross-top up to each other's RA account using OA to circumvent this restriction. LOL!!!

 

[BBCWatcher]

Does that mean me and my wife can cross-top up to each other's RA account using OA to circumvent this restriction.

Yes, that "trick" still works.

 

[vsvs24]

"While interest is earned every month, it is only credited into your CPF accounts to form part of the account balances at the beginning of each year, and withdrawable from then on."
From the letter posted; after interest is credited (Jan), you can withdraw the interest from OA and SA account. Will be SA first then OA bah.

But the top part on sequence says :

As at 9 January 2022, there are several changes to the deduction sequence for CPF withdrawals in the following order:

• Contributions/refund to the SA in withdrawal month
• Remaining SA balance
• Contributions/refund to the OA in withdrawal month
• Remaining OA balance

So I interprete as must deplete SA bal first before can touch OA interest

 

[Andrew833]

Does that mean me and my wife can cross-top up to each other's RA account using OA to circumvent this restriction. LOL!!!

There are many similar "trick" but take note. Top up and contribution are different in RA acc. Top up cash is lock up till 65-70 then payout monthly.

 

[twosix]

It is quite a hassle. I will not touch my OA and SA. Between 60 and 65 years old, I will just rely on my passive income. At 65 years old, I can activate my CPF Life if needed or leave it until 70 years old.

Who knows how long one will live. I'd take it out at 65 instead of letting it earn a little bit more interest. I'd use it to dote on my family, especially if I have grand children.

 

[Andrew833]

But the top part on sequence says :

As at 9 January 2022, there are several changes to the deduction sequence for CPF withdrawals in the following order:

• Contributions/refund to the SA in withdrawal month
• Remaining SA balance
• Contributions/refund to the OA in withdrawal month
• Remaining OA balance

So I interprete as must deplete SA bal first before can touch OA interest

CPF reply on 17 Jan 2022 :

Dear XXXX

Thank you for your reply on 12 January 2022.

As at 9 January 2022, there are several changes to the deduction sequence for CPF withdrawals in the following order:

Contributions/refund to the SA in withdrawal month
Remaining SA balance
Contributions/refund to the OA in withdrawal month
Remaining OA balance
As part of the Board’s ongoing efforts to ensure our administrative practices are aligned with the market practice, we have revised our practice such that only the savings in your CPF accounts can be withdrawn. While interest is earned every month, it is only credited into your CPF accounts to form part of the account balances at the beginning of each year, and withdrawable from then on.

I think you miss this part!

 

[fr33d0m]

Makes more sense than ever to just shield and withdraw all OA and only leave SA.
But if their intention is to 'force' people into OA so they pay less interest, then it should not be too long before they also address the issue of shielding.

2.5% is not bad for a liquid deposit.

 

[vsvs24]

Who knows how long one will live. I'd take it out at 65 instead of letting it earn a little bit more interest. I'd use it to dote on my family, especially if I have grand children.

Me too. I will make the choice that gives me most liquidity, not maximum gain. So that I can draw out when needed (will still spend carefully).

So will just go for FRS and not ERS. And will start CPF life at 65, not 70. And standard plan even though people say basic plan more worth because standard plan has more going to the common pool.

Point is I want to spend on myself before I die. What's the use of getting more interest if I can't touch the money when I want to.

 

[vsvs24]

CPF reply on 17 Jan 2022 :

Dear XXXX

Thank you for your reply on 12 January 2022.

As at 9 January 2022, there are several changes to the deduction sequence for CPF withdrawals in the following order:

Contributions/refund to the SA in withdrawal month
Remaining SA balance
Contributions/refund to the OA in withdrawal month
Remaining OA balance
As part of the Board’s ongoing efforts to ensure our administrative practices are aligned with the market practice, we have revised our practice such that only the savings in your CPF accounts can be withdrawn. While interest is earned every month, it is only credited into your CPF accounts to form part of the account balances at the beginning of each year, and withdrawable from then on.

I think you miss this part!

I did not miss. The first part is the sequence. SA first then OA.

The second part is explaining why accrued interest is removed from withdrawal sequence. Not about sequence.