CPF after 55

[BBCWatcher]

What are the drawback of property pledge ? In the event that he passed on ? any impact on its value ?

The main drawback is the one you already mentioned: he withdrew money that was reliably earning 4% interest and thus significantly reduced his future retirement income.

If he sells his home before his death and if he cannot make another equivalent property pledge (i.e. he's not "swapping" homes) then he's obliged to pay himself back (into CPF) from the home sale proceeds. The property pledge dissolves upon his demise.

Note that qualified family member(s) who top up his Retirement Account with cash are eligible for tax relief. Any such decisions should be made quickly, within this year (2021), and then again in January, 2022, since tax reliefs are granted (if granted) on a calendar year basis. The 2021 rule is up to $7,000 of tax relief per qualified giver. The 2022 rule is up to $8,000.

 

[dgeralds]

Hi All. I have a query:

The following ceiling have increased for 2022 and Im at 2021 ceiling now:
2022 FRS is $192000 (2021 was $182000)
2022 ERS is $288000 (2021 was $279000)
2022 BHS is $63000 (2021 was $66000)

1. Can I use CPF OA monies to transfer to SA, RA and MA? If it is not allowed,
2. Can I use cash to to-up SA, RA and MA?

Thank you.

 

[BBCWatcher]

The following ceiling have increased for 2022 and Im at 2021 ceiling now:
2022 FRS is $192000 (2021 was $182000)

Actually the 2021 Full Retirement Sum is $186,000.

2022 ERS is $288000 (2021 was $279000)
2022 BHS is $63000 (2021 was $66000)

Actually the 2021 Basic Retirement Sum is $93,000. The 2022 Basic Retirement Sum is $96,000.

1. Can I use CPF OA monies to transfer to SA, RA and MA? If it is not allowed,

You can transfer your OA dollars to any or all of these recipients:

• Self. If you are under age 55 and your Special Account is below the Full Retirement Sum, to your own Special Account.

• Loved ones. Provided you retain enough CPF savings for your own retirement needs, to your parents, parents-in-law, grandparents, grandparents-in-law, spouse, and/or siblings. For a qualified family member who is under age 55, to their Special Account (provided it's under the Full Retirement Sum). For a qualified family member who is age 55 or older, to their Retirement Account (provided the recipient has not reached the current Enhanced Retirement Sum, a limit that is based on principal only, not interest).

2. Can I use cash to to-up SA, RA and MA?

If you are below age 55, and if your Special Account is below the Full Retirement Sum, you can top up your Special Account with cash. The limit is the current Full Retirement Sum.

If you are age 55 or above you can top up your Retirement Account with cash. The limit is the current Enhanced Retirement Sum, a limit that is based on principal only, not interest.

In 2021 (i.e. this month, as I write this) you can contribute cash to your MediSave Account up to the Basic Healthcare Sum as long as your contribution also fits within the CPF Annual Limit ($37,740). In 2022 the CPF Annual Limit no longer applies for voluntary contributions to MediSave, so any cash contribution within the BHS is fine. Your Basic Healthcare Sum is the current BHS or the BHS at the level when you celebrated your 65th birthday, whichever is lower.

The same top up/VC rules apply when you trying to deposit cash into someone else's SA, RA, and/or MA. It could even be a total stranger's CPF account(s).

 

[Okenba]

Hi All. I have a query:

The following ceiling have increased for 2022 and Im at 2021 ceiling now:
2022 FRS is $192000 (2021 was $182000)
2022 ERS is $288000 (2021 was $279000)
2022 BHS is $63000 (2021 was $66000)

1. Can I use CPF OA monies to transfer to SA, RA and MA? If it is not allowed,
2. Can I use cash to to-up SA, RA and MA?

Thank you.

I believe you are abv 55? If so, I think the following apply.

1a) CPF OA to SA: Not possible. O/w everyone would do it.
1b) CPF OA to RA: Possible if RA is below FRS ERS, and SA is empty. Otherwise, the transfer will initiate from SA to RA first, and not OA to RA. This is why people shield SA at 55. But shielding every year is not practical.
1c) CPF OA to MA: I don't think this is possible at all.

However, I believe it is possible for a loved one to transfer their OA to your RA (up to ERS). This means you can use your OA to top-up your spouse's RA and vice-versa. Note that such transfers will not give you any Tax Relief.

2a) Cash top-up to SA: Only possible by VC to all 3 accounts. O/w, everyone would do it.
2b) Cash top-up to RA: Possible, with the added incentive of Tax Relief if RA is below FRS. (Up to 8k/yr as of 2022.)
2c) Cash top-up to MA: Same as 2b. Possible if below BHS, w Tax Relief of up to $8k/yr.

The Tax Relief for 2b and 2c comes from the same pool. If you want more than 8k Tax Relief, you will have to do cash top-up to a loved one's account.

Personally, I would do cash top-ups for RA and MA, use OA for CPFIS.
When fully retired, will make a decision if it is worth it to do another shield and empty OA, leaving only SA with CPF. Emptied OA will probably go into IBKR.

 

[BBCWatcher]

1b) CPF OA to RA: Possible if RA is below FRS, and SA is empty. Otherwise, the transfer will initiate from SA to RA first, and not OA to RA. This is why people shield SA at 55. But shielding every year is not practical.

I don't think the applicable limit here is the FRS. This type of transfer is really just a "convenience transaction" since you could withdraw funds (SA first, then OA) then redeposit them into RA, up to the current ERS. I believe the CPF Board has no problem handling this convenience transaction up to the ERS. But if I'm wrong you can still get it done since you have the SA/OA cash withdrawal+RA top up option (two back-to-back transactions).

 

[Okenba]

I don't think the applicable limit here is the FRS. This type of transfer is really just a "convenience transaction" since you could withdraw funds (SA first, then OA) then redeposit them into RA, up to the current ERS. I believe the CPF Board has no problem handling this convenience transaction up to the ERS. But if I'm wrong you can still get it done since you have the SA/OA cash withdrawal+RA top up option (two back-to-back transactions).

You're right. Edited.

 

[dgeralds]

Actually the 2021 Full Retirement Sum is $186,000.

Actually the 2021 Basic Retirement Sum is $93,000. The 2022 Basic Retirement Sum is $96,000.

You can transfer your OA dollars to any or all of these recipients:

• Self. If you are under age 55 and your Special Account is below the Full Retirement Sum, to your own Special Account.

• Loved ones. Provided you retain enough CPF savings for your own retirement needs, to your parents, parents-in-law, grandparents, grandparents-in-law, spouse, and/or siblings. For a qualified family member who is under age 55, to their Special Account (provided it's under the Full Retirement Sum). For a qualified family member who is age 55 or older, to their Retirement Account (provided the recipient has not reached the current Enhanced Retirement Sum, a limit that is based on principal only, not interest).

If you are below age 55, and if your Special Account is below the Full Retirement Sum, you can top up your Special Account with cash. The limit is the current Full Retirement Sum.

If you are age 55 or above you can top up your Retirement Account with cash. The limit is the current Enhanced Retirement Sum, a limit that is based on principal only, not interest.

In 2021 (i.e. this month, as I write this) you can contribute cash to your MediSave Account up to the Basic Healthcare Sum as long as your contribution also fits within the CPF Annual Limit ($37,740). In 2022 the CPF Annual Limit no longer applies for voluntary contributions to MediSave, so any cash contribution within the BHS is fine. Your Basic Healthcare Sum is the current BHS or the BHS at the level when you celebrated your 65th birthday, whichever is lower.

The same top up/VC rules apply when you trying to deposit cash into someone else's SA, RA, and/or MA. It could even be a total stranger's CPF account(s).

Thaak you very much.

 

[dgeralds]

I believe you are abv 55? If so, I think the following apply.

1a) CPF OA to SA: Not possible. O/w everyone would do it.
1b) CPF OA to RA: Possible if RA is below FRS ERS, and SA is empty. Otherwise, the transfer will initiate from SA to RA first, and not OA to RA. This is why people shield SA at 55. But shielding every year is not practical.
1c) CPF OA to MA: I don't think this is possible at all.

However, I believe it is possible for a loved one to transfer their OA to your RA (up to ERS). This means you can use your OA to top-up your spouse's RA and vice-versa. Note that such transfers will not give you any Tax Relief.

2a) Cash top-up to SA: Only possible by VC to all 3 accounts. O/w, everyone would do it.
2b) Cash top-up to RA: Possible, with the added incentive of Tax Relief if RA is below FRS. (Up to 8k/yr as of 2022.)
2c) Cash top-up to MA: Same as 2b. Possible if below BHS, w Tax Relief of up to $8k/yr.

The Tax Relief for 2b and 2c comes from the same pool. If you want more than 8k Tax Relief, you will have to do cash top-up to a loved one's account.

Personally, I would do cash top-ups for RA and MA, use OA for CPFIS.
When fully retired, will make a decision if it is worth it to do another shield and empty OA, leaving only SA with CPF. Emptied OA will probably go into IBKR.

Thank you very much. Yes im 55+

 

[tyongchi]

Hi, I understand the maximum CPF annual contribution is $37,740. Is this maximum amount the same for those after 55? My current contribution (employer + employee) is $36,700. I'm over 55 and will I get to enjoy tax relief if I do a VC of another $1,040?

 

[zoneguard]

I'm over 55 and will I get to enjoy tax relief if I do a VC of another $1,040?

No tax relief for VC unless you are self-employed. The same annual limit for everybody - except if you are employed by multiple employers.

 

[Value.Matrix]

Hi, I understand the maximum CPF annual contribution is $37,740. Is this maximum amount the same for those after 55? My current contribution (employer + employee) is $36,700. I'm over 55 and will I get to enjoy tax relief if I do a VC of another $1,040?

Only tax relief for Employees are VC medisave (if its not maxed at 63,000 and based on your allowable $1,040) , SRS, and RSTU (if SA below FRS)

 

[BBCWatcher]

Tyongchi is over 55, so there's no SA top up. RA top ups are available (up to the current Enhanced Retirement Sum), and tax relief might be available depending on the RA balance (up to the FRS, with an annual limit).

 

[iMac]

Some question on FRS and ERS.

If at 55yr old (2021), I chose ERS (because my OA+SA got enough money for ERS).

9 yr down the road (2030) ..i need a lump sum of money urgently...can I tell CPFB i've changed my mind and wish to go back to FRS, will they refund me back the money?

 

[Value.Matrix]

Some question on FRS and ERS.

If at 55yr old (2021), I chose ERS (because my OA+SA got enough money for ERS).

9 yr down the road (2030) ..i need a lump sum of money urgently...can I tell CPFB i've changed my mind and wish to go back to FRS, will they refund me back the money?

Before withdrawal at 65-70, you are allowed a 1 time withdrawal of your RA up to 20% of amount in RA when you were age 55 (means if you got $200,000 but RA at 65 is $300,000 , you can withdraw $40,000 only as its based on $200,000 instead of $300,000).

If you need more, you can pledge your property and withdraw more (leaving BRS in RA) but this is the last resort

 

[BBCWatcher]

iMac is at the 2021 Enhanced Retirement Sum, so with a property pledge/charge it should be possible to withdraw as much as $93,000 (the 2021 BRS). In other words, in this case the minimum that has to be left in the RA is the Full Retirement Sum ($186,000) plus accrued interest. Assuming no rare exceptions apply.

 

[zoneguard]

If at 55yr old (2021), I chose ERS (because my OA+SA got enough money for ERS).

Question is how did you reach ERS? Have you ever done cash top-ups to SA? Those top-ups are earmarked for RA (and hence can only flow out as LIFE payout) and cannot be withdrawn from RA even with property pledge.

I recall somebody (2 persons actually) asking about this scenario before and ERS dropping back to FRS is only possible if no cash top-ups was ever done to SA - at least that was the conclusion. You may have to ask CPFB yourself as this is not a common scenario and rules may have changed since then.

 

[antro65]

Kindly help...
I am 56+, still working, no confidence in myself to do investing and hoping to get a better return through putting my cash in the bank or FD.
If a cash deposit of the CPF Annual Limit ($37,740) is made in January to the 3 accounts, and since I am still working and getting a CPF contribution from my employer, will the monthly contributions still be deposited into the CPF since the limited is reached? If not allowed, then, what happens to the monthly amount from the company and my salary?

 

[Okenba]

Kindly help...
I am 56+, still working, no confidence in myself to do investing and hoping to get a better return through putting my cash in the bank or FD.
If a cash deposit of the CPF Annual Limit ($37,740) is made in January to the 3 accounts, and since I am still working and getting a CPF contribution from my employer, will the monthly contributions still be deposited into the CPF since the limited is reached? If not allowed, then, what happens to the monthly amount from the company and my salary?

If I'm not wrong, CPF will wait until the end of the calendar year, calculate how much has been deposited through your job and voluntary contributions for the year, and refund you the excess.
In other words. Not a good idea.

Do you have accrued interest you can refund?
That should go into your OA and will earn 2.5%pa

Is your MA all topped up?
While you can't withdraw from MA, you can use it for medical expenses and any interest overflow will end up in OA which can be withdrawn.

Have you maxed out your RA?
While you can't withdraw from RA, topping it up will increase the payouts you receive when you hit payout age from 65-70.

 

[polyglob]

Kindly help...
I am 56+, still working, no confidence in myself to do investing and hoping to get a better return through putting my cash in the bank or FD.
If a cash deposit of the CPF Annual Limit ($37,740) is made in January to the 3 accounts, and since I am still working and getting a CPF contribution from my employer, will the monthly contributions still be deposited into the CPF since the limited is reached? If not allowed, then, what happens to the monthly amount from the company and my salary?

Mandatory contribution takes precedence. Your voluntary contribution in excess of annual limit will be returned to you without interest. That could happen at end of year or start of next year, meaning you lose entire year's interest you could earn on that 37+k

 

[BBCWatcher]

And is there a family member, such as a spouse/partner, with CPF-related deposit opportunities?

The single best "value investment" at your age is, in my view, slamming as many dollars as allowed into your CPF Retirement Account consistent with maintaining adequate liquidity. CPF Retirement Accounts are paying at least 4.0% interest that then lead to an excellent life annuity providing monthly retirement income from age 65 (earliest), age 70, or starting any time in between. You cannot beat this value in my opinion (combination of safety and performance), not when you're in your 50s and above and don't have the retirement time horizon to go into a stock index fund in a big way.

The RA top up limit is the Enhanced Retirement Sum (ERS). Every time the ERS increases you can add even more dollars to your RA. (It just increased again on January 1, 2022.)

If you're already pegging your CPF RA at the ERS (assuming you're still maintaining adequate liquidity, especially pre-age 65), great, then other ideas might apply.