CPF chats

[henrylbh]

if I dont need to depend on CPF life monthly payment and I foresee I will pass at around 70 yo (family history), does it make sense for me to opt for BRS then withdraw whatever I can and use the amount to top up my kids' CPF as pre-death asset distribution?


*I prefer not to give them cash but 'locked up' amounts coz cash they supposed to earn and save themselves.

Defer life payout and decide just before age 70.

If you are alright with freezing your bequest to beneficiaries till they are 55, then go for enhanced nomination for the time being.

 

[yoongf]

*".... You may also withdraw your Retirement Account savings (excluding top-up monies, government grants, and interest earned) above your Basic Retirement Sum if you own a property.*"

Yr example u just minus 20k. Need minus grants and interest too.

https://www.cpf.gov.sg/Members/Schemes/schemes/retirement/withdrawals-of-cpf-savings-from-55

Let say if u reach 55.

u got property.

Total SA and OA maybe 141K
not here and there.

u can only choose BRS + property is it?

Then top up SA will be lock at 55? depends how how much top up if 20k
mean 141k-90.5k-20k = remaining can withdraw?


But SA + OA not hitting FRS 181k.
But SA + OA BRS exceed 90.5k

 

[BBCWatcher]

This "top up can't withdraw" thing only applies to ppl who want to go BRS.

A better way to say this: top ups before age 55 might affect the amount you can withdraw from your Retirement Account if you were to try to reduce your Retirement Account below your age 55 Full Retirement Sum.

Of course, failure to top up with tax relief means you don’t get that tax relief or that sweet 4% interest (sometimes 5%). And that means you probably end up poorer at age 55+. Also, reducing your Retirement Account reduces your lifetime CPF LIFE retirement income stream and CPF LIFE residuals.

It’s very hard for me to comprehend why anyone would think or plan for FRS-level CPF LIFE to be “too much,” “too lavish.” We are aware this is high cost of living Singapore, right? And I’m still waiting for my invitation to a fabulous, champagne fueled CPF 55 withdrawal party.

 

[celtosaxon]

How should priorities be ranked pre-age 55 to ensure maximum CPF benefits?

For example:

#1 - achieve BHS in MA (max VC annually)
#2 - achieve FRS in SA (raise shield @55)
#3 - fund minimum in RA (RSTU if needed)

 

[mummynew]

Defer life payout and decide just before age 70.

If you are alright with freezing your bequest to beneficiaries till they are 55, then go for enhanced nomination for the time being.

I didnt know about this 'enhanced nomination' and just went to read about it. Seems to be an ideal option for me to transfer my CPF to kids' accounts upon my departure.

Individual's personal experiences have great impact in shaping decisions. I always see CPF as a good lock up to ensure having a decent old age amount to live on. I have two great kids so far but I have also seen the lives of such 'great' kids can go haywire later part in their lives (business failures, bankruptcies, char-siew type kids of own, gambling, extra martial affairs, china women, get conned, etc etc that leave some penniless at older ages despite having good starts in life).

Thanks for the useful pointer!

 

[8zaoyu]

Defer life payout and decide just before age 70.

If you are alright with freezing your bequest to beneficiaries till they are 55, then go for enhanced nomination for the time being.

Thanks for sharing, i am trying to check about "enhanced nomination", is it on the CPF website? Yes, i will defer to 70 if I my employer renew my re-employment yearly after our SG statutory retirement age at 62! And most of us who share in this forum talking point surely earn by 55 more than FRS. Some boasting they already have millions in cash n properties. But we don't know we will tell people we made losses in properties or scammed in investments!

 

[BBCWatcher]

How should priorities be ranked pre-age 55 to ensure maximum CPF benefits?
For example:
#1 - achieve BHS in MA (max VC annually)
#2 - achieve FRS in SA (raise shield @55)
#3 - fund minimum in RA (RSTU if needed)

I think that's a reasonable ordering when considering one individual (rather than a household and extended family when other considerations might apply). #2 can be achieved more quickly via SA top ups and OA to SA transfers. And then there's a #4 if desired, which is to push up RA once formed up as high as the ERS, and again up to the ERS every time it's raised.

I didnt know about this 'enhanced nomination' and just went to read about it. Seems to be an ideal option for me to transfer my CPF to kids' accounts upon my departure.

It's an option, but I'm not sure it's ideal. The Enhanced Nomination Scheme can never push anybody's CPF accounts above certain limits (e.g. the Basic Healthcare Sum). Moreover, unlike cash top ups, the ENS reduces or eliminates possible tax relief opportunities. So I'm not a huge fan of the ENS, as it happens. However, if you're justifiably worried that your nominee will be irresponsible with your CPF residuals -- your nominee is a compulsive gambler, for example -- the ENS is a way to try to protect irresponsible nominees from themselves to some extent.

 

[mummynew]

It's an option, but I'm not sure it's ideal. The Enhanced Nomination Scheme can never push anybody's CPF accounts above certain limits (e.g. the Basic Healthcare Sum). Moreover, unlike cash top ups, the ENS reduces or eliminates possible tax relief opportunities. So I'm not a huge fan of the ENS, as it happens. However, if you're justifiably worried that your nominee will be irresponsible with your CPF residuals -- your nominee is a compulsive gambler, for example -- the ENS is a way to try to protect irresponsible nominees from themselves to some extent.

Thanks for pointing out the tax part as part of my considerations.

My past experiences made it difficult for me to trust human will behave consistently throughout life.

 

[mummynew]

If when I pass, my siblings are about 65 - 75 years old with minimal CPF money, can my enhanced nomination money be credited to their accounts for them to draw monthly?

 

[crimsontactics]

If when I pass, my siblings are about 65 - 75 years old with minimal CPF money, can my enhanced nomination money be credited to their accounts for them to draw monthly?

Should be possible.

Sent from . using GAGT

 

[maple96]

Thanks for pointing out the tax part as part of my considerations.

My past experiences made it difficult for me to trust human will behave consistently throughout life.

I pity u that u have to continue to live your life in misery, cannot breakout of your negative thoughts, cannot think positive to enjoy the rest of your life.

(good u deleted all your dirty linens in public)

Learn not to post negative thoughts, u posted so much in the Will thread to affect the forumer who posted her questions.

 

[vsvs24]

If when I pass, my siblings are about 65 - 75 years old with minimal CPF money, can my enhanced nomination money be credited to their accounts for them to draw monthly?

I believe it is possible to opt for enhanced nomination for your children and normal nomination (ie get cash) for your siblings. You may want to confirm this.

 

[henrylbh]

Thanks for pointing out the tax part as part of my considerations.

My past experiences made it difficult for me to trust human will behave consistently throughout life.

That tax part is nothing compare to having a full or near full FRS sitting in my CPF.

 

[maple96]

That tax part is nothing compare to having a full or near full FRS sitting in my CPF.

Precisely, waited so long for someone to post this

 

[zuppeur]

What happens in this case
Going for Brs 90.5k + pledge property

OA 40.5k
SA 90 5k which 40.5k by rstu

Weeks before age 55, shield 40.5k in my SA

After RA is formed, I liquidate my shield. 40.5k is return back to SA.
Can this 40.5k be withdraw lump sum or adhoc?

 

[Toni90]

What happens in this case
Going for Brs 90.5k + pledge property

OA 40.5k
SA 90 5k which 40.5k by rstu

Weeks before age 55, shield 40.5k in my SA

After RA is formed, I liquidate my shield. 40.5k is return back to SA.
Can this 40.5k be withdraw lump sum or adhoc?

I think 5k only. Gov not that stupid.

 

[oceanicmanta]

https://www.cpf.gov.sg/askjamie/user/uploads/Illustration_of_topup_monies_in_RA.pdf

For those top up with cash.

What happens in this case
Going for Brs 90.5k + pledge property

OA 40.5k
SA 90 5k which 40.5k by rstu

Weeks before age 55, shield 40.5k in my SA

After RA is formed, I liquidate my shield. 40.5k is return back to SA.
Can this 40.5k be withdraw lump sum or adhoc?

let me try ...

going back to CPF's illustration, this case would be Member B where BRS was not met (ie Non Top Up Money less than 90.5k)

My Answer: cannot withdraw the un-shielded 40.5k SA

but what happens after un-shielding ... I have no idea

 

[BBCWatcher]

That tax part is nothing compare to having a full or near full FRS sitting in my CPF.

A nominee can enjoy both, free: just take the cash distribution and pump it all (or as much as allowed) into CPF.

For example, if your nominee's Special Account is at $100,000, and if you have $100,000 of residual CPF funds that would go into your nominee's SA via the Enhanced Nomination Scheme (ENS), then there are two choices. You could use the ENS, in which case the nominee receives $81,000 into her SA (the 2020 Full Retirement Sum is $181,000, so that's the current limit) and the rest ($19,000) in cash. There is no tax relief this way. Or you could use a traditional nomination (all cash), in which case the nominee receives $100,000. Then the nominee can turn around and top up her SA by $81,000 (the same amount) and qualify for $7,000 of tax relief. Which is better? The latter, of course! It's the same total amount, same CPF interest, but with $7,000 more tax relief. This is free money left on the table with the ENS, a pure loss (except to the government).

If you think your nominee isn't smart enough to figure this out, then you can leave separate instructions. ("It's my wish that you do the following....")

That's why I suggest that the ENS is really mostly when you think your nominee is going to be irresponsible or at least not yet responsible enough. So you use the ENS to try to protect the nominee and his/her interests, even from him/herself. One clear example is when your nominee is a compulsive gambler, and so you highly value funding your nominee's CPF LIFE and MediSave resources. If your nominee is at least a reasonably responsible adult, then I wouldn't use the ENS.

 

[mummynew]

That tax part is nothing compare to having a full or near full FRS sitting in my CPF.

I am inferring the 'my' above is referring to my kids in the event that I do a enhanced nomination to them.

The tax part just rang a bell coz when I do donations after retirement, I use my sister's name for her to enjoy some tax incentive. Just some free tax saving for her.

Bringing in this new concept (to me) of enhanced nomination along with the issue of tax make me think the arrangement maybe better to do enhanced nomination to my siblings who have retired instead of to my kids to enhance siblings' retirement income (I am very much excited about this enhanced nomination option as I have been trying to think of ways to give my siblings' some regular income after a lump sum cash that they may not know how to manage. Will seek further clarification when I meet CPF next year.).

 

[mummynew]

A nominee can enjoy both, free: just take the cash distribution and pump it all (or as much as allowed) into CPF.

So if my intention is to build an 'annuity' with enhanced nomination for my siblings, then I will contribute some amount subject to annual max to my CPF via my kids for kids to enjoy some tax incentive while building a larger sum?

*a few of my siblings are only primary school level and so better not to give them too much hard cash.