CPF at 55 Years Old

[yoongf]

That could be different. House Refund may work differently. Last year, I think CPF contribution was still not auto transferred to RA without FRS in RA.

Yes.. i agree that its really a non standard practice, hence the big confusion on CPF procedures.

Those on Minimum Sum Scheme, those born before 1958 but volunteer join CPF Life, those born after 1958 on/off CPF Life, those met FRS / not met FRS..

All seem to hv different transection periods, and rules keep changing.

Not complaining, but its really an ever evolving topic.

 

[BBCWatcher]

A few comments:

• When you see the maximum “Voluntary Housing Refund” amount in your online CPF dashboard that amount should equal what the CPF Board calls a “property charge.” You need a large enough property pledge or property charge to withdraw substantial amounts from a Retirement Account (or from other accounts if you haven’t met the Full Retirement Sum).
• The default payout start for CPF LIFE is age 70. Age 65 is the minimum payout start age.
• When considering your retirement financial plans (and whether they’re viable) foreign residence is fine, but I would only consider it as viable if you have a “durable” legal right of abode in that foreign country. In particular, if your foreign residence is contingent on a spouse agreeing to renew a visa annually then that’s not durable in my view. The spouse could separate, divorce, predecease you, or otherwise refuse to renew your visa. If you acquire an independent right of abode through marriage (permanent residence), OK, different story. To pick an example, if you move with a European Union citizen-spouse to an EU country then your right of abode in that country is conditional for 1 year then reasonably durable thereafter— with a path to permanent residence and (if desired) citizenship while being allowed to stay.
• Speaking of spouses, make sure your spouse’s retirement financial needs are well protected, too!

 

[AppleiPhone]

after 55, simplicity sake BRS = $100k

Scenario A
If member has VHR of -$100k and SA+OA has $200k. He can withdraw $100k if he pledge property for BRS

Scenario B
if same member use $100k cash to refund house loan making VHR =$0. CPF SA+OA=$200k. He no longer able to choose BRS. He can only withdraw $5k.

if the above is right. Doing housing refund seals off the BRS path.

Many financial articles are advising to do housing refunds without warning about the BRS fatality

Actually if based on your scenario B, you should have CPF=SA+OA+ (VHR return to OA) = $300K then you can withdraw $100K, not 5K.

 

[BBCWatcher]

I notice the thread starter mentioned self employment. Bear in mind that tax relief is potentially available for both SA top ups (up to $8,000 of tax relief per year) and “all three account” Voluntary Contributions (must fit within the CPF Annual Limit). If the thread starter is looking to add funds to CPF then those would be good options.

 

[item2sell]

Actually if based on your scenario B, you should have CPF=SA+OA+ (VHR return to OA) = $300K then you can withdraw $100K, not 5K.

you are right.

 

[royalmix]

Folks,

need clarification on the following...

Assuming I'm turning 55 this year, and the current cpd accounts are as follows:

OA $275
SA $147,000
MA $29,000

and I own a 3 rm hdb bought in 1978 by my parents and transferred to me on 2018.

In view that I'm unable to hit FRS, am I right to assume that:

1. $99,400 of SA will be transferred to RA for BRS
2. I can pledge my 3 rm flat for $99,400 to make up to FRS
3. I can withdraw (SA+OA)-$99,400 = $47,875
4. When payout begins at 65, I'll be receiving the payout amount for FRS?

Comments please....

Everyone can withdraw at least 5k at 55, this amount will be set aside first in your OA, then the rest of the balances in SA/OA (if below FRS) will be transferred to RA.

If you wish to withdraw your RA down to BRS, you must have qualified property to pledge/charge.

{What kind of property must you own to make the withdrawal?​

1. A Singapore property -The property you own must be in Singapore.
2. Lease which lasts you up to age 95 - The remaining lease on your property must last you up to at least age 95. }

There 2 categories or types of members with property to pledge/charge. The following is extracted from CPFB website:

{1. If you have used CPF savings for your property:

You can withdraw your savings without providing additional documents as long as the retirement sum you set aside after the withdrawal, plus the CPF savings you have used for the property including the accrued interest, is enough to make up your Full Retirement Sum (FRS).

When you sell your property, the CPF savings you used to pay for it, including accrued interest, will be refunded to your CPF account. This will restore your retirement sum and payouts.

2. If you used none to little CPF savings for your property

If you did not use CPF savings for your property or if the CPF savings used for the property amount is low, you can still make a withdrawal down to the BRS, by pledging to refund the amount withdrawn when you sell or transfer your property.

The withdrawable amount is subject to additional assessment, such as the current value of the property, the outstanding loan, and co-owners' share. To preserve your savings and safeguard your retirement, withdrawals from your Retirement Account can only be made if the sale or transfer of your property restores the retirement sum and payouts.}

Are you Cat1 (generally known as charge) or Cat2 (generally known as pledge) member with a qualified property?

{ } extracted from CPFB website

 

[royalmix]

This is another question which I'm unsure about and hopefully members here can advise..

Unless I'm mistaken, CPF LIFE is scheduled to begin payment of BRS/FRS/ERS paspor on the 65 birthday for the cpf member and is supposed to carry on with the monthly payment until the member pass on.

What happens if the cpf member pass away shortly after payout commenced? For example, with 2 years on payout commencement? Will there be some form of "refund" (I don't know if refund is the right term to use) to the cpf member's spouse (or whoever he nominated to receive his cpf)?

If you choose to start payout at 65, you have to choose a CPF Life Plan with your BRS monies in RA (assuming you succeed at BRS).

If you choose CPF Life Basic Plan, and die 2 years later, all monies in RA/OA/SA/MA will be paid to your nominated beneficiaries, including all unused CPF LIfe Premium (about 10-20% of RA at 65)

If you choose CPF Life Standard/Escalating Plan, 100% of RA balance will be transferred to CPF Life Pool as Premium. If you die 2 years later, only the unused CPF LIfe Premium (excluding interest and extra interest) and the rest of the balances in OA/SA/MA will be paid to your bene.

What happens with "new monies" added into your CPF after 55 and after 65 - meet up with CPFB to find out the latest rules!

 

[meekiatah]

Everyone can withdraw at least 5k at 55, this amount will be set aside first in your OA, then the rest of the balances in SA/OA (if below FRS) will be transferred to RA.
If you wish to withdraw your RA down to BRS, you must have qualified property to pledge/charge.
{What kind of property must you own to make the withdrawal?
1. A Singapore property -The property you own must be in Singapore.
2. Lease which lasts you up to age 95 - The remaining lease on your property must last you up to at least age 95. }
There 2 categories or types of members with property to pledge/charge. The following is extracted from CPFB website:
{1. If you have used CPF savings for your property:
You can withdraw your savings without providing additional documents as long as the retirement sum you set aside after the withdrawal, plus the CPF savings you have used for the property including the accrued interest, is enough to make up your Full Retirement Sum (FRS).
When you sell your property, the CPF savings you used to pay for it, including accrued interest, will be refunded to your CPF account. This will restore your retirement sum and payouts.
2. If you used none to little CPF savings for your property
If you did not use CPF savings for your property or if the CPF savings used for the property amount is low, you can still make a withdrawal down to the BRS, by pledging to refund the amount withdrawn when you sell or transfer your property.
The withdrawable amount is subject to additional assessment, such as the current value of the property, the outstanding loan, and co-owners' share. To preserve your savings and safeguard your retirement, withdrawals from your Retirement Account can only be made if the sale or transfer of your property restores the retirement sum and payouts.}
Are you Cat1 (generally known as charge) or Cat2 (generally known as pledge) member with a qualified property?
{ } extracted from CPFB website

Cat 2, the HDB flat is inherited, thus only minimal cpf money ($800+/-, excluding accrued interest) was used for HDB upgrading program and stamp fee. The balance lease can last me until 103 years old. There is no outstanding loan and I'm the sole owner.

 

[meekiatah]

I notice the thread starter mentioned self employment. Bear in mind that tax relief is potentially available for both SA top ups (up to $8,000 of tax relief per year) and “all three account” Voluntary Contributions (must fit within the CPF Annual Limit). If the thread starter is looking to add funds to CPF then those would be good options.

Thanks for the reminder. Am self employed for the past 3 years since returning from Indonesia due to covid.

Plan is to

1. apply for their family visa which would entitled me to stay for up to a year each time I enter the country, annual renewal required until the 3rd year where I can apply for 5 year family visa.

2. move over to Indonesia next April tentatively. I don't foresee myself doing voluntary CPF top up, unless required by iras for self employment medisave..

 

[royalmix]

Cat 2, the HDB flat is inherited, thus only minimal cpf money ($800+/-, excluding accrued interest) was used for HDB upgrading program and stamp fee. The balance lease can last me until 103 years old. There is no outstanding loan and I'm the sole owner.

Good, so you have the answer and know what to do?

The withdrawable amount is subject to additional assessment, such as the current value of the property, the outstanding loan, and co-owners' share. To preserve your savings and safeguard your retirement, withdrawals from your Retirement Account can only be made if the sale or transfer of your property restores the retirement sum and payouts.}

Talk to CPFB, apply to pledge and withdraw, subject to their assessment of current value of property. If you have done a valuation, you should know roughly whether you qualify.

 

[item2sell]

Good, so you have the answer and know what to do?


Talk to CPFB, apply to pledge and withdraw, subject to their assessment of current value of property. If you have done a valuation, you should know roughly whether you qualify.

@AppleiPhone

why can’t you pledge your property and withdraw RA?

is it your property cannot last till you are 95yo

 

[BBCWatcher]

Thanks for the reminder. Am self employed for the past 3 years since returning from Indonesia due to covid.
Plan is to
1. apply for their family visa which would entitled me to stay for up to a year each time I enter the country, annual renewal required until the 3rd year where I can apply for 5 year family visa.

Let’s suppose you reach the 5 year family visa stage. What would then happen if (tragically, horribly) your wife were to predecease you? If you can continue living in Indonesia then your retirement financial plan can reasonably assume continued residence in Indonesia. If you’d have to leave Indonesia then your retirement financial plan should assume residence in Singapore (presumably in the HDB flat you can no longer rent, and with presumably higher living costs).

Viable financial plans should be fairly pessimistic to be realistic.

2. move over to Indonesia next April tentatively. I don't foresee myself doing voluntary CPF top up, unless required by iras for self employment medisave..

So…why not? You mentioned upthread you’re interested in conservative and attractive investments as you approach age 55 (paraphrasing). Why would you even take money out of CPF if that’s your objective? You’re not going to find anything better than CPF near age 55 that fits that investment/savings description. Where are these tens of thousands of 4+% interest earning dollars going to go if you withdraw them? (Let’s start with that question.)

Your compulsory MediSave contributions are just that: compulsory. While you’re living in Indonesia (while you can) MediSave dollars aren’t too useful, but that part isn’t a choice. They become useful if/when they return to Singapore, and they also become useful if you should predecease your CPF nominee(s). In limited circumstances you may be able to draw from your MediSave Account while living overseas, specifically for emergency hospitalization and severe disability. In any event you should not view your compulsory contributions as in any way affecting the attractiveness of voluntary contributions. If VCs and/or top ups are the most attractive available savings options then that’s what you should do if/as able.

 

[AppleiPhone]

@AppleiPhone

why can’t you pledge your property and withdraw RA?

is it your property cannot last till you are 95yo

I'll call CPF again to verify why I can't pledge again. Few months back, few CSOs told me fill up RA to $110K+ then the rest can withdraw OA & SA. I think I'm the minority, instead of withdrawing 5K, I contributed 50K to CPF 3 accounts and RA. My RA still not reach BRS but was told must reach FRS-VHR. Nevertheless how I wish my VHR is half a million to repay back my CPF in future. I'll do the same contribution next year as there is a limit for 3 accounts contribution every year.

 

[yoongf]

I'll call CPF again to verify why I can't pledge again. Few months back, few CSOs told me fill up RA to $110K+ then the rest can withdraw OA & SA. I think I'm the minority, instead of withdrawing 5K, I contributed 50K to CPF 3 accounts and RA. My RA still not reach BRS but was told must reach FRS-VHR.

This " pledge property" topic is only applicable when RA has min BRS. Furthermore, topups to RA cannot be withdrawn.

For you to access your OA/SA, u first need to use the CPF app to do a CPF transfer of your OA/SA to RA to reach min BRS.

The $110k mentioned is likely to include topups/grants/interest that cannot be withdrawn.

 

[yoongf]

This is the pdf provided by CPF. The examples show that "VHR" = 0 ... ie.. no CPF used for property.

Yet, with pledging, RA less BRS can be withdrawn.

This suggest that the CPF matrix does not solely use "VHR", but also use property remaining value to determine withdrawal amounts.

https://www.cpf.gov.sg/content/dam/...hat-can-be-withdrawn-with-property-pledge.pdf

 

[AppleiPhone]

This " pledge property" topic is only applicable when RA has min BRS. Furthermore, topups to RA cannot be withdrawn.

For you to access your OA/SA, u first need to use the CPF app to do a CPF transfer of your OA/SA to RA to reach min BRS.

The $110k mentioned is likely to include topups/grants/interest that cannot be withdrawn.

Yes, RA cannot withdraw but it's required by CPF to FRS.
The 110+ minimum RA is FRS-VHR. So long I self contributed RA to 110+, any amount from OA & SA can be withdrawn for now.
My plan now is to reduce to standard BRS if can pledge property.
I've no plan to move OA/SA to RA if that is your proposal. RA can always self top up without limit per year, up to maximum to ERS.

 

[royalmix]

Yes, RA cannot withdraw but it's required by CPF to FRS.
The 110+ minimum RA is FRS-VHR. So long I self contributed RA to 110+, any amount from OA & SA can be withdrawn for now.

So your RA is now 110+? Have you tried withdrawing OA/SA and allowed?

My plan now is to reduce to standard BRS if can pledge property.

Are you below BRS prior to your RA topups? RA topups cannot be withdrawn, have you confirmed with CPFB that if you pledge your property, there is money to be withdrawn from RA?

I've no plan to move OA/SA to RA if that is your proposal. RA can always self top up without limit per year, up to maximum to ERS.

Be careful, double confirm with CPFB = if you did not pledge, any additions to OA/SA and total in OA/SA can be withdrawn and will not be sweep into RA at 65 since your RA is still below FRS altho you have VHR to makeup for it. I have seen a case where CPFB continue to sweep OA/SA into RA even the member have "VHR" to makeup for it but did not apply to pledge property - exact details I do not know, just shocking to know CPFB just sweep without advance notice to the member.

 

[yoongf]

... I have seen a case where CPFB continue to sweep OA/SA into RA even the member have "VHR" to makeup for it but did not apply to pledge property - exact details I do not know, just shocking to know CPFB just sweep without advance notice to the member.

As long as RA below FRS, the automatic sweeping will occur.

Does not matter if there is housing P+AI or pledge, the first priority is RA >= FRS.

If want to retain OA for housing installment, need submit online form to CPF.

https://www.cpf.gov.sg/member/faq/h...ing-55-years-old-can-i-continue-to-use-my-cpf

 

[royalmix]

Does not matter if there is housing P+AI or pledge, the first priority is RA >= FRS.

Are you sure if you already pledge to withdraw RA down to BRS, then at 65 CPFB still sweep OA/SA to RA? I am talking about 65 not 55!

 

[item2sell]

As long as RA below FRS, the automatic sweeping will occur.

Does not matter if there is housing P+AI or pledge, the first priority is RA >= FRS.

If want to retain OA for housing installment, need submit online form to CPF.

https://www.cpf.gov.sg/member/faq/h...ing-55-years-old-can-i-continue-to-use-my-cpf

You already 55?