CPF after 55

[andyhtc]

Oooh you should have shared this much earlier I see. Yes you got every right to be concerned haha. Actually why not just give the monies to her directly? It is becuz you want to enjoy the interest earned by the CPF Life scheme is it? Give direct no interest earned? But this approach you still give about 20% premium to others in exchange to get that interest. But I guess it is a trade-off.

I get some tax savings and she is quite healthy now in her 70s. I hope she can live beyond 90 years old

 

[henrylbh]

Below is the extract of the reply I got, which implies that the interest rate on RA/CPF Life premium is factored in the payout. However, it is not 100% of the 4% interest rate.

I think it is a reasonable mechanism to spread the cost of maintaining CPF payout to very old members with $0 in their balance.

The only way to gain financially from the system is to live longer than the rest

What happens to the interest earned on my CPF LIFE premium?​

You will benefit from the interest earned in two ways:

1. It is factored into your monthly payouts and you receive a higher payout from the start.
2. The interest accumulated on your CPF LIFE premium (and premiums of other CPF LIFE members) is what allows you to continue receiving payouts even after your CPF LIFE premium balance is depleted.

https://www.cpf.gov.sg/member/faq/r...my-cpf-life-premium-continue-to-earn-interest

The reply is nothing new. It is the same as what has been stated in their website.

 

[rrr2015]

memory getting bad not sure if it was in this thread but i think there was discussion on CPF OA & SA withdrawal sequences have changed. so now confirm CPF will deplete SA deposit & balance first?

i think someone was saying he going to try withdrawal in Feb, wonder what's the outcome?

 

[andyhtc]

The reply is nothing new. It is the same as what has been stated in their website.

Indeed. Just to clear up the earlier discussions as there were different interpretations.

 

[henrylbh]

memory getting bad not sure if it was in this thread but i think there was discussion on CPF OA & SA withdrawal sequences have changed. so now confirm CPF will deplete SA deposit & balance first?

i think someone was saying he going to try withdrawal in Feb, wonder what's the outcome?

According to the dubious new rules, most likely his SA balance will be deducted clearly by the withdrawal amount if the month's working contribution has not been credited yet. If the month's working contribution has been credited, he has to withdraw more than the contribution amount to know whether accrued interest is included in the withdrawal amount.

 

[a4973]

I'm the one that said I will test a small withdrawal. So previously by checking in My CPF > My Messages > Retirement from February onwards I can see an estimated withdrawal amount that is > OA+SA Principal that is reflected on the Dashboard. I've been checking this yesterday and today and the estimated withdrawal amount is = OA+SA Principal reflected on the Dashboard so I didn't test a withdrawal as it is pretty clear the change has kicked in. I've also spoken with the CPF CSO who confirmed the withdrawal amount presentation as a recent change and the total accrued interest will not be visible but will be credited to the principal on 31 Dec each year.
Of course if one wants to"show hand' and withdraw full OA+SA at any time after January then the total amount will include the accrued interests.

 

[henrylbh]

1

I'm the one that said I will test a small withdrawal. So previously by checking in My CPF > My Messages > Retirement from February onwards I can see an estimated withdrawal amount that is > OA+SA Principal that is reflected on the Dashboard. I've been checking this yesterday and today and the estimated withdrawal amount is = OA+SA Principal reflected on the Dashboard so I didn't test a withdrawal as it is pretty clear the change has kicked in. I've also spoken with the CPF CSO who confirmed the withdrawal amount presentation as a recent change and the total accrued interest will not be visible but will be credited to the principal on 31 Dec each year.
Of course if one wants to"show hand' and withdraw full OA+SA at any time after January then the total amount will include the accrued interests.

Before the change, there was no stupid Dashboard. Also before the change, under my message you could get estimated withdrawal amount from OA and/or SA. Though not specified, the estimated withdrawal amount is inclusive of accrued to the previous month.

Now the Dashboard is saying the same thing. Don't believe?

 

[rrr2015]

I'm the one that said I will test a small withdrawal. So previously by checking in My CPF > My Messages > Retirement from February onwards I can see an estimated withdrawal amount that is > OA+SA Principal that is reflected on the Dashboard. I've been checking this yesterday and today and the estimated withdrawal amount is = OA+SA Principal reflected on the Dashboard so I didn't test a withdrawal as it is pretty clear the change has kicked in. I've also spoken with the CPF CSO who confirmed the withdrawal amount presentation as a recent change and the total accrued interest will not be visible but will be credited to the principal on 31 Dec each year.
Of course if one wants to"show hand' and withdraw full OA+SA at any time after January then the total amount will include the accrued interests.

thanks for your update!
so prior to change estimate withdrawal amt will include Jan 2022 accrued interest?

 

[rrr2015]

1


Before the change, there was no stupid Dashboard. Also before the change, under my message you could get estimated withdrawal amount from OA and/or SA. Though not specified, the estimated withdrawal amount is inclusive of accrued to the previous month.

Now the Dashboard is saying the same thing. Don't believe?

but if Jan OA+SA balance same as Feb (assume no contributions) does that means accrued not included for withdrawal?

 

[henrylbh]

thanks for your update!
so prior to change estimate withdrawal amt will include Jan 2022 accrued interest?

Yes. Before the change, withdrawal amount includes interest earned to previous month.

The withdrawal statement in a simple case, before the change, would show something like this -

Withdrawal Amount on 4 Feb 2021 ..... $x
Interest earned this year ..... $y
Total Withdrawal Amount .... $z

$z is the amount you request for.
$x would be taken from SA followed by OA if interest earned this year (from SA and OA) is not enough to cover Total Withdrawal Amount.

 

[henrylbh]

but if Jan OA+SA balance same as Feb (assume no contributions) does that means accrued not included for withdrawal?

Even if Jan and Feb balance no change, the estimated Withdrawal Amount in Jan will be never be the same as Feb Withdrawal Amount includes Interest earned this year

 

[dgeralds]

Hi All

I have query. Iam above 55 and my RA is up to ERS. Also fully paid my HDB.

Can I buy shares using 100% of my CPF-OA balance? I am asking because as per my CPF account dashboard (see below), it seems like I cannot.

why?

Below is from CPF dashboard:

Amount in CPF OA 59K, SA 251K, MA 66K, RA 285K

Allowed to invest:
Professionally Managed Products: CPF OA 39K, CFP SA 210K
Stocks: CPF OA 20K, CPF SA NA
Gold: CPF OA: 6K

 

[kehyi4]

Hi All

I have query. Iam above 55 and my RA is up to ERS. Also fully paid my HDB.

Can I buy shares using 100% of my CPF-OA balance? I am asking because as per my CPF account dashboard (see below), it seems like I cannot.

why?

Below is from CPF dashboard:

Amount in CPF OA 59K, SA 251K, MA 66K, RA 285K

Allowed to invest:
Professionally Managed Products: CPF OA 39K, CFP SA 210K
Stocks: CPF OA 20K, CPF SA NA
Gold: CPF OA: 6K

why?
because it's the current CPF rules
Your RA-ERS, HDB fully paid up, whatever, doesn't affect the CPF Investment Scheme rules

source:
CPF FAQ says:
How much CPF savings you can invest
CPF Investment Scheme-Ordinary Account (CPFIS-OA)
You can invest your OA savings after setting aside $20,000 in your OA
In addition, you can only invest up to 35% and 10% of your investible savings in stocks and gold, also known as the stock and gold limits. Investible savings refers to the sum of your OA balance and the amount of CPF you have withdrawn for investment and education.

 

[dgeralds]

why?
because it's the current CPF rules
Your RA-ERS, HDB fully paid up, whatever, doesn't affect the CPF Investment Scheme rules

source:
CPF FAQ says:
How much CPF savings you can invest
CPF Investment Scheme-Ordinary Account (CPFIS-OA)
You can invest your OA savings after setting aside $20,000 in your OA
In addition, you can only invest up to 35% and 10% of your investible savings in stocks and gold, also known as the stock and gold limits. Investible savings refers to the sum of your OA balance and the amount of CPF you have withdrawn for investment and education.

Thank you very much.

 

[henrylbh]

Hi All

I have query. Iam above 55 and my RA is up to ERS. Also fully paid my HDB.

Can I buy shares using 100% of my CPF-OA balance? I am asking because as per my CPF account dashboard (see below), it seems like I cannot.

why?

Below is from CPF dashboard:

Amount in CPF OA 59K, SA 251K, MA 66K, RA 285K

Allowed to invest:
Professionally Managed Products: CPF OA 39K, CFP SA 210K
Stocks: CPF OA 20K, CPF SA NA
Gold: CPF OA: 6K

My OA now about 600k. I am left with 5k for stocks

 

[iMac]

why?
because it's the current CPF rules
Your RA-ERS, HDB fully paid up, whatever, doesn't affect the CPF Investment Scheme rules

source:
CPF FAQ says:
How much CPF savings you can invest
CPF Investment Scheme-Ordinary Account (CPFIS-OA)
You can invest your OA savings after setting aside $20,000 in your OA
In addition, you can only invest up to 35% and 10% of your investible savings in stocks and gold, also known as the stock and gold limits. Investible savings refers to the sum of your OA balance and the amount of CPF you have withdrawn for investment and education.

dgeralds, you are over 55yr old and your RA account already created.

How come you still need to "set aside $20,000 in OA" ?

 

[sohguanh]

Hi All

I have query. Iam above 55 and my RA is up to ERS. Also fully paid my HDB.

Can I buy shares using 100% of my CPF-OA balance? I am asking because as per my CPF account dashboard (see below), it seems like I cannot.

why?

Below is from CPF dashboard:

Amount in CPF OA 59K, SA 251K, MA 66K, RA 285K

Allowed to invest:
Professionally Managed Products: CPF OA 39K, CFP SA 210K
Stocks: CPF OA 20K, CPF SA NA
Gold: CPF OA: 6K

Above age 55 and RA is formed means can withdraw all remaining CPF monies out correct? If can then can withdraw out and buy stocks but then will the stocks profits give more than OA 2.5% and SA 4%? OA and SA they say is guaranteed 2.5% and 4% so outside investment must beat then it is worthwhile to take out.

If I am you I would withdraw NOT ALL but some out the rest leave it inside earn govt interest. How much is that "some" is up to each individual.

 

[BBCWatcher]

dgeralds, you are over 55yr old and your RA account already created.
How come you still need to "set aside $20,000 in OA" ?

Because "that's the rule."

Above age 55 and RA is formed means can withdraw all remaining CPF monies out correct?

If the RA is funded to the Full Retirement Sum (or Basic Retirement Sum with property pledge/charge), then the remaining SA and OA dollars (in that order) can be withdrawn, yes.

If can then can withdraw out and buy stocks but then will the stocks profits give more than OA 2.5% and SA 4%?

There's no guarantee they will.

OA and SA they say is guaranteed 2.5% and 4% so outside investment must beat then it is worthwhile to take out.

Well, technically CPF interest rates are not guaranteed into the future. But those floor interest rates have been very reliable in practice. If those interest rates ever were to change then presumably you could revisit such a decision.

If I am you I would withdraw NOT ALL but some out the rest leave it inside earn govt interest. How much is that "some" is up to each individual.

Well, unfortunately you have to withdraw at least $40,000 from SA (or all of SA if it's less than that) before you get to any of the OA dollars. And the $40,000 figure is based on "SA shielding," which is not free to do because you lose a month of SA interest on the shielded amount.

 

[henrylbh]

Above age 55 and RA is formed means can withdraw all remaining CPF monies out correct? If can then can withdraw out and buy stocks but then will the stocks profits give more than OA 2.5% and SA 4%? OA and SA they say is guaranteed 2.5% and 4% so outside investment must beat then it is worthwhile to take out.

If I am you I would withdraw NOT ALL but some out the rest leave it inside earn govt interest. How much is that "some" is up to each individual.

After RA is formed, whatever money in your OA/SA can be fully withdrawn with interest earned to previous month or partially withdrawn excluding interest. The amount withdrawn cannot be put back into CPF unless you follow the prevailing rules of contribution and topping up which have annual limits.

But you if choose to leave the money in OA/SA, they will continue to earning CPF interest and the money is protected from creditors.

You can also choose to invest the money in OA/SA in any eligible instruments including real estate.

If you use them for investments, you need to follow the prevailing investment rules, regardless of whether you are above 55 with FRS. And the proceeds , whether gain or loss, must go back to the respective OA/SA. OA/SA used for investments are not covered by CPF Nomination, including any money outside the CPF accounts. You can close the investment account any time but the investments and money will not go back to CPF.

 

[rrr2015]

Even if Jan and Feb balance no change, the estimated Withdrawal Amount in Jan will be never be the same as Feb Withdrawal Amount includes Interest earned this year

yeah as long as withdrawal amount increasing monthly means accrued interest included. but what isn't clear is the sequences have changed … SA accrued > OA accrued etc

also they made changes to distribution of unused top, so now all (cash & cpf) fall under nomination or intestacy