CPF after 55

[vsvs24]

It's a good lesson for them. If they learn it, next time they will be more careful right?
Investing journey is never smooth, there is always gain and loss.

Have more empathy. Some of them lost all their savings.

Just like the OCBC scam. Some people still make unkind remarks like why they so stupid to fall for it.

All these are uncalled for. Really pitiful.

 

[Andrew833]

Have more empathy. Some of them lost all their savings.

Just like the OCBC scam. Some people still make unkind remarks like why they so stupid to fall for it.

All these are uncalled for. Really pitiful.

I'm not saying I'm not pitiful for them, just hope that they learn the lesson to prevent become the next victim.

 

[katana71]

Can I ask the boomers, what is the difference leaving your monies in SA or throwing more into RA? Both also pay 4% rite?

 

[sohguanh]

Can I ask the boomers, what is the difference leaving your monies in SA or throwing more into RA? Both also pay 4% rite?

From what I understand RA monies is at age 65 month by month give you abit. SA is at age 55 once you form FRS go into RA the remaining can take out starting from SA then OA

So for me I prefer take at age 55 as I don't know if I can Iive until 65 to touch the RA monies.

 

[Okenba]

Can I ask the boomers, what is the difference leaving your monies in SA or throwing more into RA? Both also pay 4% rite?

You can withdraw from SA. You can't withdraw from RA.
More RA gives you more lifelong income.
More SA gives you more SA to withdraw. SA doesn't give you income.

 

[katana71]

You can withdraw from SA. You can't withdraw from RA.
More RA gives you more lifelong income.
More SA gives you more SA to withdraw. SA doesn't give you income.

Yes, but you can also transfer the monies from SA into your RA just b4 you reach 65yrs right? More flexibility instead of straightaway dumping the SA excess into RA at 55 yrs to join like the Enhanced Retirement Sum. Afterall both pay 4%.

 

[culture_counter]

Yes, but you can also transfer the monies from SA into your RA just b4 you reach 65yrs right? More flexibility instead of straightaway dumping the SA excess into RA at 55 yrs to join like the Enhanced Retirement Sum. Afterall both pay 4%.

Logical

 

[a4973]

Yes, but you can also transfer the monies from SA into your RA just b4 you reach 65yrs right? More flexibility instead of straightaway dumping the SA excess into RA at 55 yrs to join like the Enhanced Retirement Sum. Afterall both pay 4%.

Hmm, actually sounds good, keep in SA collecting 4% in case need to withdraw can do so when nearing 65 can still transfer to RA.

 

[Okenba]

Yes, but you can also transfer the monies from SA into your RA just b4 you reach 65yrs right? More flexibility instead of straightaway dumping the SA excess into RA at 55 yrs to join like the Enhanced Retirement Sum. Afterall both pay 4%.

You will need to dump more money at 65 as compared to what you dump at 55.
IE. If A dumps in 300k at 55, and B dumps in 200k at 55. B will need to dump in 100k (+4%pa compounding for 10 yrs) at 65 in order to roughly match A's CPF life payouts.

However, if A dumps in ERS at 55, and tops-up RA every year to ERS, then B will never be able to match A's payouts. B can match the capital (which is ERS at 65), but he would have lost out on the interest earned by the capital.

Summary: Your way works if you don't really intend to max out CPF life (ie. ERS and top-up to ERS every year.)
In fact, you can consider FRS and top-up FRS every year if that is enough for you, as that way would also allow you to get Tax Relief (for self, spouse, or children) for the annual top-up every year.

 

[dork32]

From what I understand RA monies is at age 65 month by month give you abit. SA is at age 55 once you form FRS go into RA the remaining can take out starting from SA then OA

So for me I prefer take at age 55 as I don't know if I can Iive until 65 to touch the RA monies.

even if i cannot live till 65, i will not take out at 55.

i will take what i need to support my lifestyle. when i run of cash, i will take some more.

 

[katana71]

You will need to dump more money at 65 as compared to what you dump at 55.
IE. If A dumps in 300k at 55, and B dumps in 200k at 55. B will need to dump in 100k (+4%pa compounding for 10 yrs) at 65 in order to roughly match A's CPF life payouts.

However, if A dumps in ERS at 55, and tops-up RA every year to ERS, then B will never be able to match A's payouts. B can match the capital (which is ERS at 65), but he would have lost out on the interest earned by the capital.

Summary: Your way works if you don't really intend to max out CPF life (ie. ERS and top-up to ERS every year.)
In fact, you can consider FRS and top-up FRS every year if that is enough for you, as that way would also allow you to get Tax Relief (for self, spouse, or children) for the annual top-up every year.

Yes, thanks you have summarised the above well. And you are right, I don't intend to max out CPF Life in future. Just the normal ERS will suffice with flexibility to draw out funds from SA or still leave inside @4% anytime from 55 to just before 65 to transfer to RA.

 

[vsvs24]

Interesting. Would continue to keep in SA at 65 rather than transfer to RA at 65 then be better ? Because once CPF life payout start, part of RA goes to the common pool.

 

[BBCWatcher]

Would continue to keep in SA at 65 rather than transfer to RA at 65 then be better ? Because once CPF life payout start, part of RA goes to the common pool.

Better for what? Better for assuring a particular lifestyle for the rest of your life? No. High quality life annuities do that, and that's what CPF LIFE is.

What are your objectives?

 

[vsvs24]

Better for what? Better for assuring a particular lifestyle for the rest of your life? No. High quality life annuities do that, and that's what CPF LIFE is.

What are your objectives?

Liquidity.

Since some were saying prefer to keep in SA to earn 4% at 55 and consider transferring to RA at 65.

Was thinking may have to sit down and calculate based on an estimated life span, how much more can we get from monthly payout from the topup, vs the topup amount remaining in SA divided by that number of years.

Because for CPF life, part of the RA money goes to the commonpool. Whereas keeping in SA is intact.

Plus CPF Life payout for female is lower than for male. SA don't differentiate

 

[lucky_]

Plus CPF Life payout for female is lower than for male. SA don't differentiate

This is interesting, I did not know this. Any knowledge of the reasoning behind this? Is it linked to the longer average life expectancy of females compared to males?

 

[polyglob]

Because for CPF life, part of the RA money goes to the commonpool. Whereas keeping in SA is intact.

My understanding is that pooling is only on the interest generated after start of CPF Life payouts. This is no different from buying private annuity with cash - after cash is handed over to insurer, the annuity buyer loses any claim to said cash, including any interest generated by that cash based on however the insurer uses it.

Upon death, the CPF Life premium, minus payouts if any, is distributed as per nomination.

 

[katana71]

Interesting. Would continue to keep in SA at 65 rather than transfer to RA at 65 then be better ? Because once CPF life payout start, part of RA goes to the common pool.

That may be an option for me too.

 

[vsvs24]

This is interesting, I did not know this. Any knowledge of the reasoning behind this? Is it linked to the longer average life expectancy of females compared to males?

Try using the CPF Life estimator, enter same year and RA amount. Then try entering male, then try again entering female. You will see that payout is different.

As with any insurance, premium higher due to longer life expectancy of female.

 

[BBCWatcher]

Liquidity.

Plenty of vehicles offer that. The relevant question here is whether you need the incremental liquidity CPF SA offers. If you already have plenty of liquid assets, no.

If liquidity were all important you'd never buy a house. Buying a house involves sequestering a significant amount of wealth in a fairly or highly illiquid asset.

Plus CPF Life payout for female is lower than for male. SA don't differentiate

But the average risk of a female outliving her principal plus accrued interest less withdrawals is higher than it is for the average male.

 

[dork32]

This is interesting, I did not know this. Any knowledge of the reasoning behind this? Is it linked to the longer average life expectancy of females compared to males?

coz female live longer than male