CPF after 55

[RoLanTo]

It depends a little on the payout plan chosen, but the residual for his nominee(s) is guaranteed to be at least equal to this amount: the principal (at the start of CPF LIFE) less CPF LIFE payouts. For example, if he enters CPF LIFE at age 70 with $70,000 in his CPF Retirement Account, lives for 10 years, and receives $560/month, then that's $67,200 of CPF LIFE payouts. His CPF nominee(s) are guaranteed to receive at least $2,800 ($70,000 minus $67,200) in this example. (Adjust the numbers for real numbers -- $70K is most probably substantially wrong for the payout figure you cited.) Plus remaining OA, SA, and MA balances of course.

No, the interest helps pay for the (important!) lifetime payout guarantee, subject to a little variation depending on payout plan chosen. "There's no free lunch." Of course with both the classic RSS and CPF LIFE the residual falls every month, and there's no guarantee there will be any residual from RA/CPF LIFE. If he merely lives long enough there's no residual from that source. The key difference is that CPF LIFE payouts don't end until he does, and classic RSS payouts end on a fixed date even if he doesn't.

If he's in average or better health there are rather high odds he will outlive a 17 year classic RSS payout. Singstat publishes national life tables that give some idea, although they're too conservative for forward projections since they're based on past mortality experiences.

630/mth x 17 years (RSS) equivalent is 560/mth x 19years (cpf life).
which will be 87yo and 89 yo. ignoring this longevity thingy

the clarity i need for the "remaining" if pass on earlier.
RSS: cpf balance + interests earned - disbursed amount.
Is this correct?

CPF:
cpf balance + interest earned + (cpf-life premium balance + cpf-life premium balance interest earned ) - disbursed amount ?

your response is : cpf balance + interest earned (OA/SA/RA) + (cpf-life premium balance ) - disbursed amount
Is this correct?

 

[BBCWatcher]

OA to CPFIS (agent bank) to investment, investment devest back to CPFIS (agent bank) to OA.
You can't take cash from CPFIS (agent bank).

No, that's not correct if you've set aside at least the Full Retirement Sum in your Retirement Account as the CPF Board helpfully explains here.

It does appear to be a viable withdrawal path for some OA dollars, but there are some apparent restrictions. One issue is that the whole CPF Investment Account is closed out. It doesn't seem like you can pick and choose which investments/cash in your CPF IA to transfer out. Also, while there doesn't seem to be any impediment to opening a fresh CPF Investment Account later on, you won't be able to anything unless your OA balance is above $20,000 (the minimum participation level for the CPF Investment Scheme) at that time.

 

[BBCWatcher]

630/mth x 17 years (RSS) equivalent is 560/mth x 19years (cpf life).
which will be 87yo and 89 yo. ignoring this longevity thingy
the clarity i need for the "remaining" if pass on earlier.
RSS: cpf balance + interests earned - disbursed amount.
Is this correct?

Correct. Or, more simply, it's whatever the leftover RA balance is. Interest is pushing up, but the payouts are pushing down faster. It works just like a standard/ordinary bank account with monthly even withdrawals, really. Once the balance drops to zero there's no residual and no further payouts. Very 18th century, you might say.

CPF:
cpf balance + interest earned + (cpf-life premium balance + cpf-life premium balance interest earned ) - disbursed amount ?

No. Keep it simple, because it is. The minimum CPF LIFE residual is the starting RA balance at CPF LIFE entry less the cumulative CPF LIFE payouts. (The CPF LIFE Basic Plan is more residual focused than the other payout plans, which is why I attach the word "minimum.")

For example, if your starting RA balance (including interest to that point) at CPF LIFE entry is $75,000, and if you've received 8 years of $600/month payouts before you die, that's a cumulative total of $57,600. The minimum residual paid to CPF nominee(s) from CPF LIFE is thus $17,400.

If there are top ups/transfers into RA after CPF LIFE entry then that money doesn't disappear. It would boost both monthly payouts and residuals (for any/every age when residuals still exist). And the CPF nominee(s) are still guaranteed at least the entry principal(s) less cumulative CPF LIFE payouts. That basic guarantee doesn't change.

In both classic RSS and CPF LIFE the residual OA, SA, and MA balances are whatever they are. That part is the same.

 

[Andrew833]

No, that's not correct if you've set aside at least the Full Retirement Sum in your Retirement Account as the CPF Board helpfully explains here.

It does appear to be a viable withdrawal path for some OA dollars, but there are some apparent restrictions. One issue is that the whole CPF Investment Account is closed out. It doesn't seem like you can pick and choose which investments/cash in your CPF IA to transfer out. Also, while there doesn't seem to be any impediment to opening a fresh CPF Investment Account later on, you won't be able to anything unless your OA balance is above $20,000 (the minimum participation level for the CPF Investment Scheme) at that time.

Thanks, didn't know about it.
Take note: * Central Depository (Pte) Ltd (“CDP”) imposes a transfer fee of $10.70 (inclusive of GST) for every share counter transferred from your CPF Investment Account to your CDP Account.
$10.07 per counter is ok, not much.

I'm curious, what will happen if I have stocks and UT.

 

[Andrew833]

The simplest spreadsheet looks like this. Based on these made up numbers SA drops below 40k in 2029.

Year​	Account​	Start Bal​	Withdraw​	New Start Bal​	Interest​	End Bal​
2022​	SA​	250000.00​	0​	250000.00​	4.0%​	260000.00​
	OA​	500000.00​	0​	500000.00​	2.5%​	512500.00​
2023​	SA​	260000.00​	40000​	220000.00​	4.0%​	228800.00​
	OA​	512500.00​	0​	512500.00​	2.5%​	525312.50​

Most people can compute in their heads current SA bal / annual withdraw amount => roughly how many years SA can last. So the interesting bit is to finetune the spreadsheet based on your own circumstances, like full amount MC+VC3A injection, what if invest some more of the OA money (with attendent risk of capital loss), etc.

Basically consider overall financial picture holistically.

Under the old interest-only withdrawal sequence, CPF would've been a perpetual motion machine. Too good to last when more and more people do it, since the grease for said perpetual motion machine is external and not risk free. Too bad Singapore got no oil wells.

In your example, you withdraw SA, while keeping OA 500K left to compound 2.5% yearly. Actually you can get more than that.

 

[polyglob]

In your example, you withdraw SA, while keeping OA 500K left to compound 2.5% yearly. Actually you can get more than that.

You mean OA amount should be higher, like adding MA overflow interest? Or you mean invest OA to get more?

 

[Andrew833]

You mean OA amount should be higher, like adding MA overflow interest? Or you mean invest OA to get more?

I mean OA amount is big amount, better to withdraw and invest some where. CPF OA only 2.5%, which is very low. SA is 4% but you are going to withdraw part by part, doing this will reduce the compounding interest effect.

Example $100k in SA at 55, at 65 it's $148k If no interest is withdraw.

 

[vsvs24]

I mean OA amount is big amount, better to withdraw and invest some where. CPF OA only 2.5%, which is very low. SA is 4% but you are going to withdraw part by part, doing this will reduce the compounding interest effect.

Example $100k in SA at 55, at 65 it's $148k If no interest is withdraw.

When you are retired and not working, have to be careful about investment. Don't have long term horizon like the younger people.

 

[Andrew833]

When you are retired and not working, have to be careful about investment. Don't have long term horizon like the younger people.

True, that's why investment for passive income rather than growth.

In financial terms, passive income describes money that a one-time investment continually generates, without requiring the investor to monitor or adjust their holdings. The passive investing strategies below warrant a closer look.
3. Dividend Stocks
Dividend stocks are one of the simplest ways for investors to create passive income. As public companies generate profits, a portion of those earnings are siphoned off and funneled back to investors in the form of dividends. Investors can decide to pocket the cash or reinvest the money in additional shares.

Dividend yields can vary significantly from one company to the next, and they can also fluctuate from year to year. Investors unsure about which dividend-paying stocks to choose should stick to the ones that fit the dividend aristocrat label, which means the company has at least a 25-year track record of paying out substantial dividends.

There is still risk.

 

[item2sell]

True, that's why investment for passive income rather than growth.

In financial terms, passive income describes money that a one-time investment continually generates, without requiring the investor to monitor or adjust their holdings. The passive investing strategies below warrant a closer look.
3. Dividend Stocks
Dividend stocks are one of the simplest ways for investors to create passive income. As public companies generate profits, a portion of those earnings are siphoned off and funneled back to investors in the form of dividends. Investors can decide to pocket the cash or reinvest the money in additional shares.

Dividend yields can vary significantly from one company to the next, and they can also fluctuate from year to year. Investors unsure about which dividend-paying stocks to choose should stick to the ones that fit the dividend aristocrat label, which means the company has at least a 25-year track record of paying out substantial dividends.

There is still risk.

many also bet on dividends by SIA. It is hard to predict what Disaster will happen and disrupt the dividend income

 

[polyglob]

I mean OA amount is big amount, better to withdraw and invest some where. CPF OA only 2.5%, which is very low. SA is 4% but you are going to withdraw part by part, doing this will reduce the compounding interest effect.

Example $100k in SA at 55, at 65 it's $148k If no interest is withdraw.

Ah ok. This is where individual circumstances come into play. My case is that I am comfortable with risk-free 2.5% for OA, while drawing SA down to zero, because my other investments already provide me with enough cash flow.

At this stage of my life, the investment mantra is minimize risk and preserve capital.

 

[dork32]

If you're trying to withdraw OA dollars ahead of SA dollars (after age 55), you might be able to convert OA dollars via the CPF Investment Scheme (OA) to cash. The CPF Board seems to allow that still. It's a bit complicated, though, but it seems to be viable. Anyone age 55+ tried it (or familiar with it)?

this is wat henry taught us. use oa to buy some stocks on the sgx and request it to be transferred to you directly

the following is what you can find on the CPF website

You can withdraw your CPFIS-OA and CPFIS-SA investments, as well as the cash balance in your Investment Account, after setting aside the Full Retirement Sum (FRS) in your Retirement Account (RA). The FRS can be set aside fully with cash, or with cash (i.e. at least the Basic Retirement Sum) and property.



Once your withdrawal application is approved, your CPFIS investments will be transferred to you. The withdrawal will not result in liquidation of your investment holdings.

 

[Andrew833]

many also bet on dividends by SIA. It is hard to predict what Disaster will happen and disrupt the dividend income

That's why pick a stable dividend stock is important.
BTW back to CPF questions

 

[dork32]

OA to CPFIS (agent bank) to investment, investment devest back to CPFIS (agent bank) to OA.
You can't take cash from CPFIS (agent bank).

this is not exactly correct

 

[fr33d0m]

Assuming you've met FRS, any VC3A that is supposed to go to MA will go to OA instead. So there is a large portion of your VC3A that will end up in OA instead of SA.
I think the effective interest rate is about 2.7% or thereabouts.

If you're trying to withdraw OA dollars ahead of SA dollars (after age 55), you might be able to convert OA dollars via the CPF Investment Scheme (OA) to cash. The CPF Board seems to allow that still. It's a bit complicated, though, but it seems to be viable. Anyone age 55+ tried it (or familiar with it)?

This one. Draw OA without touching SA.

 

[a4973]

This one. Draw OA without touching SA.

For CPFIS OA, are there investments that are also "safe" like those recommended for SA shielding?
So the flow is buy UT on a platform ie POEMS using OA > request to transfer the purchased UT to CDP > redeem the UT when it is in CDP > proceeds are deposited in the bank account linked to CDP ?
1. What are the costs involved in the whole process?
2. How many days from start to finish?
3. Is this a really viable approach from the perspective of purely withdrawing OA?

Thank you.

 

[vsvs24]

this is wat henry taught us. use oa to buy some stocks on the sgx and request it to be transferred to you directly

the following is what you can find on the CPF website

You can withdraw your CPFIS-OA and CPFIS-SA investments, as well as the cash balance in your Investment Account, after setting aside the Full Retirement Sum (FRS) in your Retirement Account (RA). The FRS can be set aside fully with cash, or with cash (i.e. at least the Basic Retirement Sum) and property.



Once your withdrawal application is approved, your CPFIS investments will be transferred to you. The withdrawal will not result in liquidation of your investment holdings.

Can this be partial ie eg 3 counters out of 5 counters or need to close entire CPFIS ?

If need to close entire CPFIS, are we allowed to open another CPFIS say 1 year later ?

 

[BBCWatcher]

For CPFIS OA, are there investments that are also "safe" like those recommended for SA shielding?
So the flow is buy UT on a platform ie POEMS using OA > request to transfer the purchased UT to CDP > redeem the UT when it is in CDP > proceeds are deposited in the bank account linked to CDP ?

They would be the same sort of choices you'd use for SA shielding.

1. What are the costs involved in the whole process?

If you use a zero fee platform — POEMS, FSMOne, DollarDex, or UTRADE — then it'll probably be just the standard CPF Investment Account fees that your "Big 3" bank charges plus the CDP fee (currently S$10.70 per security per transfer).

2. How many days from start to finish?

No idea, but it doesn't particularly matter, within reason, since you'd want to kick off the process on the first business day of the calendar month for CPF interest-related reasons. And since this isn't going to be like your bank ATM or debit card even in the best of circumstances. It'll take a little while.

3. Is this a really viable approach from the perspective of purely withdrawing OA?

I think so, for "lumpy" withdrawals anyway.

Can this be partial ie eg 3 counters out of 5 counters or need to close entire CPFIS ?

It doesn't appear so. According to the CPF Board's FAQ you have to close out the whole CPF Investment Account. So this probably isn't going to work so well if you have some elaborate portfolio constructed in your CPF Investment Account. Happy to be wrong about that, though.

If need to close entire CPFIS, are we allowed to open another CPFIS say 1 year later ?

I cannot find any impediment to opening a new CPF Investment Account one day later if you want. Maybe you'd do that at another one of the "Big 3" banks that offer them, "round robin."

 

[Andrew833]

this is not exactly correct

I understand it now, as said in the earlier post. Thanks.

For CPFIS OA, are there investments that are also "safe" like those recommended for SA shielding?
So the flow is buy UT on a platform ie POEMS using OA > request to transfer the purchased UT to CDP > redeem the UT when it is in CDP > proceeds are deposited in the bank account linked to CDP ?
1. What are the costs involved in the whole process?
2. How many days from start to finish?
3. Is this a really viable approach from the perspective of purely withdrawing OA?

Thank you.

UT don't link to CDP. CDP only stocks.
I post it earlier; "I'm curious, what will happen if I have stocks and UT."

Take note: * Central Depository (Pte) Ltd (“CDP”) imposes a transfer fee of $10.70 (inclusive of GST) for every share counter transferred from your CPF Investment Account to your CDP Account.
$10.07 per counter is ok, not much.

 

[a4973]

I understand it now, as said in the earlier post. Thanks.


UT don't link to CDP. CDP only stocks.
I post it earlier; "I'm curious, what will happen if I have stocks and UT."

Take note: * Central Depository (Pte) Ltd (“CDP”) imposes a transfer fee of $10.70 (inclusive of GST) for every share counter transferred from your CPF Investment Account to your CDP Account.
$10.07 per counter is ok, not much.

Hi, so we're not sure where the UT can be transferred to post closing of the CPFIS OA account?
Are there stocks that are as safe as those UT recommended for shielding? Thank you.