CPF after 55

[henrylbh]

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

Please provide the link or copy and paste the changes here. I hate surfing the new website.

 

[zoneguard]

Please provide the link or copy and paste the changes here. I hate surfing the new website.

https://www.cpf.gov.sg/member/faq/g...ed-rule-on-the-disbursement-of-unused-top-ups

 

[henrylbh]

https://www.cpf.gov.sg/member/faq/g...ed-rule-on-the-disbursement-of-unused-top-ups

Thanks for the link.

It is NOT a simplification of rule on disbursement of unused top-ups. It is a Fundamental change in treatment of Giver's money.

The change will discourage Giver from making top-ups especially when he is not a nominee.

I transferred about $160k to my father's RA in his late eighties to ensure that he will be provided for life if I kaput, knowing that his nominee is my sister. Despite that, I did a transfer because the rule was that any unused top-ups will be returned to me or my nominee should I pre-deceased him.

 

[henrylbh]

Givers who made past top-ups which have not been fully used* by their recipients will receive a notification from CPF Board in early 2022.

Notification to Givers that what they have transferred as top-ups are gone with a stroke of a pen?

Or Notification to inform them that they are not affected by the NEW rule which CPF described as SIMPLIFICATION of rule. Thumb up or middle finger up?

 

[henrylbh]

Givers who made past top-ups which have not been fully used* by their recipients will receive a notification from CPF Board in early 2022.

Notification to Givers that what they have transferred as top-ups are gone with a stroke of a pen?

Or Notification to inform them that they are not affected by the NEW rule which CPF described as SIMPLIFICATION of rule. Thumb up or middle finger up?

Fortunately or unfortunately I got back unused top-ups of $81k before this new rules. I only lost interest from Jan to the month prior to the month in which the refund was made. The interest went to the nominee.

 

[rrr2015]

Thanks for the link.

It is NOT a simplification of rule on disbursement of unused top-ups. It is a Fundamental change in treatment of Giver's money.

The change will discourage Giver from making top-ups especially when he is not a nominee.

exactly! getting more & more disappointed

 

[andyhtc]

After RA is formed, whatever money in your OA/SA can be fully withdrawn with interest earned to previous month or partially withdrawn excluding interest.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.

I believe with more wealth taxes, the CPF bequest beyond a certain amount will be taxed in future.

 

[BBCWatcher]

I believe with more wealth taxes, the CPF bequest beyond a certain amount will be taxed in future.

I very much doubt that, as a standalone matter anyway. CPF is gated/throttled on the input side, so it's mathematically impossible for the total residual to get genuinely huge. If Singapore reintroduces estate/inheritance/gift taxes then CPF assets might be tossed into the estate for these purposes, but that's as far as it'll go. It won't be singled out.

....Well OK, maybe if the CPF assets are bequeathed to a foreigner (non-Singaporean citizen/non-SPR) special tax treatment could apply. I could imagine that, although it seems unlikely.

 

[reddevil0728]

I believe with more wealth taxes, the CPF bequest beyond a certain amount will be taxed in future.

I reckon they will tweak all the necessary CPF policies and avoid taxing CPF bequest, it might be quite fatal.

 

[andyhtc]

I reckon they will tweak all the necessary CPF policies and avoid taxing CPF bequest, it might be quite fatal.

Just shift the $0 year forward for the standard plan...

 

[dork32]

Just shift the $0 year forward for the standard plan...

wow.. what a way to phrase the reply. this guy got substance

 

[ABuNeNe]

it is advisable to inform my 70 years old dad to move his monies from his banks to his cpf to get a higher interest?

he only have few k in each of his OA, SA and RA accounts currently.

 

[BBCWatcher]

it is advisable to inform my 70 years old dad to move his monies from his banks to his cpf to get a higher interest?
he only have few k in each of his OA, SA and RA accounts currently.

Maybe, probably. Is he looking for more monthly retirement income? And would he be OK with the reduction in liquidity?

Let's suppose for example he has $30,000 sitting in bank accounts. If he takes half that amount ($15,000) and deposits it into his CPF Retirement Account, he'll earn anywhere from 4% to 6% interest on that money (depending on where he's at in terms of bonus interest). That's tremendously better interest than he's getting with his bank accounts. He would still have $15,000 available for any immediate cash needs in this example. His CPF Retirement Account would then generate monthly retirement income — either with a definite end date (classic Retirement Sum Scheme) or guaranteed for the rest of his life (CPF LIFE) depending on his choice of payout plan.

He may be eligible for some government matching funds, so that sweetens the deal. And if you deposit up to $8,000 into his CPF Retirement Account then you're eligible for tax relief (a reduction in next year's income tax bill) — even if he's handing you $8,000 in cash and then you make the $8,000 top up into his RA. Same with your siblings and other qualified family members if applicable — many/all of you may be eligible for tax relief.

 

[ABuNeNe]

Maybe, probably. Is he looking for more monthly retirement income? And would he be OK with the reduction in liquidity?

Let's suppose for example he has $30,000 sitting in bank accounts. If he takes half that amount ($15,000) and deposits it into his CPF Retirement Account, he'll earn anywhere from 4% to 6% interest on that money (depending on where he's at in terms of bonus interest). That's tremendously better interest than he's getting with his bank accounts. He would still have $15,000 available for any immediate cash needs in this example. His CPF Retirement Account would then generate monthly retirement income — either with a definite end date (classic Retirement Sum Scheme) or guaranteed for the rest of his life (CPF LIFE) depending on his choice of payout plan.

He may be eligible for some government matching funds, so that sweetens the deal. And if you deposit up to $8,000 into his CPF Retirement Account then you're eligible for tax relief (a reduction in next year's income tax bill) — even if he's handing you $8,000 in cash and then you make the $8,000 top up into his RA. Same with your siblings and other qualified family members if applicable — many/all of you may be eligible for tax relief.

@BBCWatcher, thanks for your reply!

He's not eligible in the matching funds.

So it is advisable for him to move this funds from the bank and also any amount in his OA to his RA to earn a higher interest and he is able to set the monthly payout as he wish under the RSS. He could even set his monthly payout to 0 if his RA is less than $30k right?

 

[qhong61]

@BBCWatcher, thanks for your reply!

He's not eligible in the matching funds.

So it is advisable for him to move this funds from the bank and also any amount in his OA to his RA to earn a higher interest and he is able to set the monthly payout as he wish under the RSS. He could even set his monthly payout to 0 if his RA is less than $30k right?

If he don't need cash, why not?

 

[BBCWatcher]

So it is advisable for him to move this funds from the bank and also any amount in his OA to his RA to earn a higher interest and he is able to set the monthly payout as he wish under the RSS. He could even set his monthly payout to 0 if his RA is less than $30k right?

He would certainly earn a much higher interest rate that way, and usually it makes very little sense to keep dollars in OA (instead of RA) if he cannot withdraw them. Cash should ideally be cycled through family members who can qualify for tax relief. (Or, better yet, the family members are making top ups into his RA for tax relief using their own cash.)

No, he cannot defer monthly payouts from his CPF Retirement Account. The CPF Board doesn't allow deferral past age 70 any more. He has a choice of classic Retirement Sum Scheme or CPF LIFE payout plans. If he's on classic RSS he can switch to CPF LIFE but not the other way around. If he doesn't switch to CPF LIFE now (or hasn't) there's a deadline to switch to CPF LIFE: a couple months before his 80th birthday.

Where are you getting/seeing that $30K figure you refer to?

 

[duhduhduh]

https://forums.hardwarezone.com.sg/threads/cpf-top-up.6742438/#post-141392914
What is the right strategy if i still got monthly contribution in my 30s? Top up cpf sa or ma first?

when is the best time to top up? dec or jan?

Hello I am curious on the above thread and many commented to top up SA instead of MA.
I was always under the impression that any voluntary top up will not able to be withdrawed from our CPF.

But then it seems that I am wrong, and that many chosed to top up SA, because this will help to fill up the SA to ERS so we can withdraw out the excess (but exclude interest earned / RSTU top up / GOVT grant) - can I say that we can still withdraw, but these will be the amounts that is monthly contributed via our monthly salary?

 

[reddevil0728]

https://forums.hardwarezone.com.sg/threads/cpf-top-up.6742438/#post-141392914
What is the right strategy if i still got monthly contribution in my 30s? Top up cpf sa or ma first?

might be worth doing MA first.

Hello I am curious on the above thread and many commented to top up SA instead of MA.
I was always under the impression that any voluntary top up will not able to be withdrawed from our CPF.

that's true

But then it seems that I am wrong, and that many chosed to top up SA, because this will help to fill up the SA to ERS so we can withdraw out the excess (but exclude interest earned / RSTU top up / GOVT grant) - can I say that we can still withdraw, but these will be the amounts that is monthly contributed via our monthly salary?

yes. money is fungible. but you will likely almost definitely going to hit BHS. so might be worth topping up MA first. then in future any overflow will go to SA and that overflow is not locked.

 

[zoneguard]

But then it seems that I am wrong, and that many chosed to top up SA, because this will help to fill up the SA to ERS so we can withdraw out the excess (but exclude interest earned / RSTU top up / GOVT grant) - can I say that we can still withdraw, but these will be the amounts that is monthly contributed via our monthly salary?

It is FRS not ERS. Excess above FRS still in SA/OA is withdrawable after 55.

 

[dork32]

Hello I am curious on the above thread and many commented to top up SA instead of MA.
I was always under the impression that any voluntary top up will not able to be withdrawed from our CPF.

But then it seems that I am wrong, and that many chosed to top up SA, because this will help to fill up the SA to ERS so we can withdraw out the excess (but exclude interest earned / RSTU top up / GOVT grant) - can I say that we can still withdraw, but these will be the amounts that is monthly contributed via our monthly salary?

It really depends. take an example of 200k frs

Case 1:
your salary contribution = 100k
your cash top up = 80k
You are right in that the 80k cannot be withdrawn

Case 2:
your salary contribution: 220k
you cash topup = 80k
Then you can withdraw 100k (300k is 100k above frs)
It is up to you to say if this 100k comes 100% your salary contribution, or
this 100k comes from top up (80k) and salary contribution (20k)

i am trying to put what zoneguard has written into simple numbers.