CPF after 55

[henrylbh]

Because its all done by people who they know and trust haha. That's why they hire people to do it for them. The ones who do are not yet rich, just middle class

You reasoned or experienced yourself that they hired people? Most I know, don't bother with their CPF even when they have advisors.

One person I know. He draws 6k each from Co A and Co B and no annual bonus. Instead he declared 500k director's fee to reduce corporate tax. And his spouse draws consultant fee with no CPF contribution. Unbelievable I got nothing to say cause they are rich enough to pay and pay

Another person I know. He also draws salary for a handful of companies and never maximise his CPF.

 

[Value.Matrix]

You reasoned or experienced yourself that they hired people? Most I know, don't bother with their CPF even when they have advisors.

One person I know. He draws 6k each from Co A and Co B and no annual bonus. Instead he declared 500k director's fee to reduce corporate tax. And his spouse draws consultant fee with no CPF contribution. Unbelievable I got nothing to say cause they are rich enough to pay and pay

Another person I know. He also draws salary for a handful of companies and never maximise his CPF.

You sure he has no tax consultant and acciuntant?

I am very surprised, because I do know of much more who do optimisation. Of course they do not do it themselves, they just appoint someone to do it for them.

 

[henrylbh]

You will be surprised. They have tax consultants and accountants but more for corporate matters but not personal matters. Some leave personal matters to their accountants and you will also be surprised that not many qualified accountants are really fully familiar or don't bother with their bosses' CPF matters, not to say their own CPF

 

[Value.Matrix]

You will be surprised. They have tax consultants and accountants but more for corporate matters but not personal matters. Some leave personal matters to their accountants and you will also be surprised that not many qualified accountants are really fully familiar or don't bother with their bosses' CPF matters, not to say their own CPF

Seems like an untap market that have an undiscovered need.

 

[athulican]

To summarize:

1. Is it good to "shield" Special Account dollars across your 55th birthday? Yes, if for no other reason than your new Retirement Account will be funded more heavily from your Ordinary Account (and/or from a cash top up to RA) on your 55th birthday.

2. Is topping up your RA with cash a good deal? Yes! Starting from the moment your RA is created on your 55th birthday your RA is the second best interest rate deal that CPF offers you. (The first best in interest rate terms is your MediSave Account, although any cash you put into MediSave has to fit within both the CPF Annual Limit and Basic Healthcare Sum.)

I am highly inclined to shove as much cash as allowed into my future Retirement Account as soon and as often as allowed. Where else am I going to get a highly reliable 4.0% yield on Singapore dollars, then leading to a VERY fairly priced life annuity from age 70? Nowhere, and not even close. That's a heck of a great deal. (What I'm describing requires some degree of wealth and liquidity, but there are some who can play this game.)

3. If you care about maximizing interest earned from RA then you would be wise to start CPF LIFE monthly payouts as late as allowed: age 70. (This is the default starting payout age.) That way you get 5 more years (60 months) of 4% interest plus $900 of bonus interest per year.

Bending yourself into a pretzel to minimize your Retirement Account's funding level is generally unwise, especially in the current and similar market interest rate environment. I'm assuming of course you don't actually need to pull dollars from your RA to survive.

Hi,

Thanks for the nice summary. I'm interested in point 1 only.

Turning 54 soon, with SA > current FRS, which I intend to take up. About "Shielding", from what I read, best UT is "Nikko AM Shenton Short Term Bond SGD", lowest expense ratio and management fee. So how many months before my birthday should I buy? Do I sell immediately after RA is set up? (likely using FSM)

Last question open to anyone: has anyone done it successfully? What to look out for?

Thanks.

 

[zoneguard]

Turning 54 soon, with SA > current FRS, which I intend to take up. About "Shielding", from what I read, best UT is "Nikko AM Shenton Short Term Bond SGD", lowest expense ratio and management fee. So how many months before my birthday should I buy? Do I sell immediately after RA is set up? (likely using FSM)

https://forums.hardwarezone.com.sg/threads/cpf-sa.6308495/page-120#post-135095106
Shield was done in July this year with timing of execution all in that post. To minimize loss of interest, as close to birthday as possible.

You can do a $1K to 'test water' first the previous month before birthday month to ensure the broker linkage to CPF is working and familarize with the steps and turnaround time for monies to be drawn and returned back to SA.

 

[Okenba]

Removing money from SA to invest will impact the interest for that month as well. From that view point, would be good to get it done within the same month.

But don't miss the wood for the trees. Better to get shielding done in time rather than miss it just to earn an additional month of interest. Taking two months should also be fine.

 

[demoforce1]

Removing money from SA to invest will impact the interest for that month as well. From that view point, would be good to get it done within the same month.

But don't miss the wood for the trees. Better to get shielding done in time rather than miss it just to earn an additional month of interest. Taking two months should also be fine.

Do you mean the same month as our birthday month?

 

[Andrew833]

Removing money from SA to invest will impact the interest for that month as well. From that view point, would be good to get it done within the same month.

But don't miss the wood for the trees. Better to get shielding done in time rather than miss it just to earn an additional month of interest. Taking two months should also be fine.

Agree, 2 months before birthday should have enough time for all the transaction process.

 

[polyglob]

Agree, 2 months before birthday should have enough time for all the transaction process.

I did $1k test run one month before my bday month to familiarize myself with both buying and selling processes. Actual shielding was executed 5 working days before my bday. I lost $50 in the round trip due to fluctuation in the value of the shielding UT. The longer you hold the UT, the more you might lose simply due to price movements.

 

[Andrew833]

I did $1k test run one month before my bday month to familiarize myself with both buying and selling processes. Actual shielding was executed 5 working days before my bday. I lost $50 in the round trip due to fluctuation in the value of the shielding UT. The longer you hold the UT, the more you might lose simply due to price movements.

Executing is about 5 working days depend on which broker.
I think UT loss is from the fees and the bid/offer spread.

 

[Froggyman]

You can certainly choose to fund your RA to the ERS, and to keep funding it to the new ERS every time the ERS is raised. Cash is usually best, and next best is if a spouse or other eligible family member transfers OA dollars to your RA (or if your SA is depleted but you have OA dollars). That's because a transfer from your own accounts draws from your SA first, and your SA is already earning 4% interests

Any condition for the giver and receiver?
Assuming that the receiver’ RA has the FRS only with some amount in SA and OA too.

Assuming that the spouse(giver) has yet reach 55 but has enough $ in SA and OA to hit FRS.
So she can just request to transfer the extra $ ( limited to min FRS) in OA to top up the spouse RA ?

If the both receiver and giver is age 55 and both has FRS in their RA, they can exchange “gift” by transfer the $ in their OA to top up each other RA?

Thanks.

 

[zoneguard]

Any condition for the giver and receiver?

Recipient: https://www.cpf.gov.sg/member/faq/g...t-is-the-maximum-amt-of-top-ups-i-can-receive

Giver (spouse): https://www.cpf.gov.sg/content/dam/...uments/ComputationOfAmts_CPFTrfrsToSpouse.pdf

Giver (other family member): https://www.cpf.gov.sg/member/faq/g...gs-can-i-transfer-to-myself-or-my-loved-ones-

 

[Froggyman]

Recipient: https://www.cpf.gov.sg/member/faq/g...t-is-the-maximum-amt-of-top-ups-i-can-receive

Giver (spouse): https://www.cpf.gov.sg/content/dam/...uments/ComputationOfAmts_CPFTrfrsToSpouse.pdf

Giver (other family member): https://www.cpf.gov.sg/member/faq/g...gs-can-i-transfer-to-myself-or-my-loved-ones-

Thank you very much.
The base line is the BRS... keep on thinking is the FRS.

 

[hwmook]

Executing is about 5 working days depend on which broker.
I think UT loss is from the fees and the bid/offer spread.

No way, FSM got no fees and UT got no spread. He must have chosen a UT which is not rock solid.

 

[Value.Matrix]

No way, FSM got no fees and UT got no spread. He must have chosen a UT which is not rock solid.

Short term bond fund also can lose money. But let's not hold that $50 loss. Because your potential 4% is much higher after that loss.

50/$200,000 = 0.025% only. Easily gotten back from the yearly interest and more.

 

[polyglob]

No way, FSM got no fees and UT got no spread. He must have chosen a UT which is not rock solid.

Nikko AM Shenton Short Term Bond Fund S$

Short term bond fund also can lose money. But let's not hold that $50 loss. Because your potential 4% is much higher after that loss.

50/$200,000 = 0.025% only. Easily gotten back from the yearly interest and more.

Yeah I treated it as a txn cost

 

[iMac]

I did $1k test run one month before my bday month to familiarize myself with both buying and selling processes. Actual shielding was executed 5 working days before my bday. I lost $50 in the round trip due to fluctuation in the value of the shielding UT. The longer you hold the UT, the more you might lose simply due to price movements.

Bro, can share which platform and UT you use for this test run?

You mentioned that for the $1K test run, you lost about $50...

if during actual run, you shield $100k...the lost will be about $5000 ?

 

[hwmook]

Nikko AM Shenton Short Term Bond Fund S$



Yeah I treated it as a txn cost

You should use Lionglobal SGD enhanced liquidity. That is rock solid.

 

[polyglob]

Bro, can share which platform and UT you use for this test run?

You mentioned that for the $1K test run, you lost about $50...

if during actual run, you shield $100k...the lost will be about $5000 ?

I used POEMS. UT is Nikko AM Shenton Short Term Bond Fund S$.

I didn't lose money in the $1k test run.

I lost $50 in the actual shielding.