CPF Easy Info Thread. :)

[kehyi4]

What is the December refund for? You deposited 1k during Dec ah?

er, yes

10char

 

[culture_counter]

Ya.. when i wrote FD above, i didnt verify if there are any FD product for SA.
i run thru a quick list.. then think the most low risk n low charges approved SA product should be this fellow:

NIKKO AM SHENTON SHORTTERM BOND(S$)

i just search thru FSM and filter based on lowest charges..
take note, i didnt consider whatever performance of individual product, i just trying to find a lowest risk to the principal amount and lowest sales charge so that majority of the capital are more or less intact for the "hack"

Yes, talked to DBS, they offer this as low risk for CPFIS-SA. But service charge upfront is 3%. Let's say a hypothetical sum of 100K transfer to Nikko Bond Fund , the service charge upfront will be 3k. So in other words, you lose your shirt but could win back your pants later. Since it is a slow stable fund, the returns are very low. Let's say after a couple of fuds you decide to liquidate and channel it back to CPFIS-SA, then after 1 year you could break even and subsequently have your 100k earn 4% for a long time more. Is this a worthwhile venture?

After some calculations, found that the equation doesn't seem to balance up to any clear advantage.

 

[highsulphur]

just buy sgs la

 

[henrylbh]

just buy sgs la

My broker said there is hardly any trade in sgx.

 

[highsulphur]

My broker said there is hardly any trade in sgx.

even if you hit the bid of the market maker is still cheaper than your 3% sales charge

 

[elnewbie]

Just sign up with Dollardex. No sales charges for bonds.

3% for bonds is daylight robbery.

Yes, talked to DBS, they offer this as low risk for CPFIS-SA. But service charge upfront is 3%. Let's say a hypothetical sum of 100K transfer to Nikko Bond Fund , the service charge upfront will be 3k. So in other words, you lose your shirt but could win back your pants later. Since it is a slow stable fund, the returns are very low. Let's say after a couple of fuds you decide to liquidate and channel it back to CPFIS-SA, then after 1 year you could break even and subsequently have your 100k earn 4% for a long time more. Is this a worthwhile venture?

After some calculations, found that the equation doesn't seem to balance up to any clear advantage.

 

[culture_counter]

Just sign up with Dollardex. No sales charges for bonds.

3% for bonds is daylight robbery.

Looks like it's better to just drop the idea of hacking...too risky! The Nikko fund includes sovereign bonds of countries like China, South Korea, India, etc... So if there is an outbreak of war in Korean Peninsula, within overnight the value may just go reverse direction.

 

[crimsontactics]

Just calculated again.

I will have 78k in my SA in 2018, after including this year bonus.

With just this initial sum, I will hit my FRS when I'm 62!

Sent from OPPO F1s using GAGT

 

[henrylbh]

Just calculated again.

I will have 78k in my SA in 2018, after including this year bonus.

With just this initial sum, I will hit my FRS when I'm 62!

So what's the expected FRS will be when you are 62?

 

[henrylbh]

Thanks for the info guys.

Another question, if I would to do topup $7000 tax relief

Is this the more "beneficial" sequence?

1) SA (until total sum $40k) - earns 5%
2) MA (until BHS) - earns 4%
3) SA (until FRS) - earns 4%
4) OA (until total sum $20k) - earns 3.5%
5) OA - earns 2.5%

SRS is only meant for additional tax relief so not included in above list

Only top-ups to SA and MA get tax relief of up to 7k subject to respective limits.

1) SA (until total sum $40k) - earns 5%
Not accurate. It's 60k less OA if OA is less than 20k.

Note - if OA $50k and SA $15k and MA $15k (combined 80k), you will only get 3.5% on OA $20k and 5% on SA $15 and MA $15 (combined 50k).

 

[jackieatbtu]

If OA is 10k and SA 80k, the bonus 1% all on the first 60k in SA? Or SA 50k and OA 10k?

Only top-ups to SA and MA get tax relief of up to 7k subject to respective limits.

1) SA (until total sum $40k) - earns 5%
Not accurate. It's 60k less OA if OA is less than 20k.

Note - if OA $50k and SA $15k and MA $15k (combined 80k), you will only get 3.5% on OA $20k and 5% on SA $15 and MA $15 (combined 50k).

 

[crimsontactics]

So what's the expected FRS will be when you are 62?

It's 415k when I'm 55...

Sent from OPPO F1s using GAGT

 

[kehyi4]

If OA is 10k and SA 80k, the bonus 1% all on the first 60k in SA? Or SA 50k and OA 10k?

you know, as far as I can tell, it doesn't matter either way. Coz the extra interest goes into SA anyway, whether it comes from OA or SA balance

For ease of calculation, just use first 60k of SA, if not enough then use OA balance to make up 60k. If still not enough, the remainder will come from MA (but extra interest earned by MA stays in MA...)

---
CPF FAQ:

Q - How is my CPF interest computed and credited into my accounts?

A - CPF interest is computed monthly, then compounded and credited annually to members' respective accounts.

An extra 1% interest per annum will also be paid on the first $60,000 of their combined balances.

CPF members will also earn an additional 1% extra interest on the first $30,000 of their combined balances (with up to $20,000 from their OA), beginning from:
January 2016, if they are aged 55 and above in January 2016;
Else, the month they turn 55 years old.

The priority of the accounts that make up the $60,000 and $30,000 is as follows:
1st: *Retirement Account (RA), including balances used to pay for the annuity premium under CPF LIFE
2nd: *Ordinary Account (OA), up to $20,000
3rd: *Special Account (SA)
4th: Medisave Account (MA)

The extra interest received on the OA will go into the member's SA if he is below 55 years old or RA if he is 55 and above to enhance his retirement savings.

For a member who has joined CPF LIFE scheme, the extra interest earned will be paid into his RA or the CPF LIFE Annuity Fund.
---

 

[elnewbie]

In short, as long as the sum total across your 3 cpf accounts reach 60k, you are assured of the extra $600 bonus interest each year.

Only top-ups to SA and MA get tax relief of up to 7k subject to respective limits.

1) SA (until total sum $40k) - earns 5%
Not accurate. It's 60k less OA if OA is less than 20k.

Note - if OA $50k and SA $15k and MA $15k (combined 80k), you will only get 3.5% on OA $20k and 5% on SA $15 and MA $15 (combined 50k).

 

[henrylbh]

In short, as long as the sum total across your 3 cpf accounts reach 60k, you are assured of the extra $600 bonus interest each year.

Note - if OA $50k and SA $15k and MA $15k (combined 80k), you will only get 3.5% on OA $20k and 5% on SA $15 and MA $15 (combined 50k).

So my note above is erroneous? Additional interest on OA is only up to 20k even it has 50k.

 

[foxer77]

In short, as long as the sum total across your 3 cpf accounts reach 60k, you are assured of the extra $600 bonus interest each year.

That great !! since many still paying for HDB loan therefore SA & MA adding up likely to hit 60k chance r higher.

 

[apatheticme]

That great !! since many still paying for HDB loan therefore SA & MA adding up likely to hit 60k chance r higher.

As henry noted, the summary is inaccurate, and I am not sure what does HDB loan has to do with MA and SA hitting 60k.

 

[winstonoyy]

The right summary is, if you have 60k in SA and MA, you sure get the bonus interest.

Whether you have balances in OA not important unless your SA and MA cannot benefit from the bonus interest fully.

The loan part only comes in because most people are drawing down on OA to pay mortgages. Given HDB's rate of CPF base rate plus 0.1%, you should pay off your HDB loan as early as possible if you are drawing from OA. Bank loan lower than 2.6% is a d
separate discussion. Which means you are more likely to rely on SA and MA for bonus interest if your OA is zero most of the time.

 

[elnewbie]

I left out the part about OA as most people would have exhausted their OA for housing. But yes, OA only up to 20k will be considered.

So SA plus MA has to be at least 40k, else can't maximise this benefit.

Note - if OA $50k and SA $15k and MA $15k (combined 80k), you will only get 3.5% on OA $20k and 5% on SA $15 and MA $15 (combined 50k).

So my note above is erroneous? Additional interest on OA is only up to 20k even it has 50k.

 

[oceanicmanta]

It's 415k when I'm 55...

Sent from OPPO F1s using GAGT

am quite sure there will be tweaks along the way ... whether it amounts to shifting of goal posts is anyone's guess. just need to stay nimble & adjust accordingly