CPF Easy Info Thread. :)

[maple96]

I have a question that I am not sure if it make sense. I have used my OA for HDB and fully paid, and the interest is building up each year. When I reach 55, and I have set side BRS without pledging my HDB. Can I withdraw my balance of OA + SA out in cash and repay my HDB loan + interest to CPFB?

This is what will happen when u reach 55:

1. CPFB will transfer all your SA then OA to RA to form FRS. Any excess balance in OA/SA can be withdrawn anytime.
2. If u only want BRS, u have to pledge your HDB property (assume it meets CPFB criteria) to withdraw 50% of FRS from RA. This 50% will be paid to your bank acct after approval.
3. What u want to do with the monies withdraw in #1 and #2 is your decision. U want to payback OA for the amts withdrawn for loan/interest so u can earn interest of 2.5% on OA, or put the monies elsewhere to grow is your own decision.

Does it answer all your questions?

Others have given u suggestions to explore the SA hack at 54+, if u dun need the excess monies in #1.

If u dun need the money in #2, consider pledging to withdraw only at 65 or if u wish to defer payout then at 70.

 

[SKenny]

I have a question that I am not sure if it make sense. I have used my OA for HDB and fully paid, and the interest is building up each year. When I reach 55, and I have set side BRS without pledging my HDB. Can I withdraw my balance of OA + SA out in cash and repay my HDB loan + interest to CPFB?

Why do you want to withdraw from CPF, only to repay your CPF "loan"?

 

[polyglob]

CPF as bond component of retirement portfolio

A retirement scenario for the pros.

Let's say my retirement portfolio is 50:50 stocks and bonds, and the bond part is fully CPF. FRS is met and not counted in the bond part.

During retirement, drawing down my portfolio every 6 months, how does rebalancing work with the bond component? Say I start with 500k stocks and 500k CPF, and I need 30k every 6 months. Now stocks bull run and my mix becomes 600k stocks 500k CPF.

Of the 100k increase in stocks, I take 30k for living expenses. Now I have 570k stocks and 500k CPF. To maintain 50:50 I trim stocks to 535k and top up CPF to 535k.

Can suka suka top up CPF like that? If not, then buy a bond fund with the 35k?

 

[SKenny]

A retirement scenario for the pros.

Let's say my retirement portfolio is 50:50 stocks and bonds, and the bond part is fully CPF. FRS is met and not counted in the bond part.

During retirement, drawing down my portfolio every 6 months, how does rebalancing work with the bond component? Say I start with 500k stocks and 500k CPF, and I need 30k every 6 months. Now stocks bull run and my mix becomes 600k stocks 500k CPF.

Of the 100k increase in stocks, I take 30k for living expenses. Now I have 570k stocks and 500k CPF. To maintain 50:50 I trim stocks to 535k and top up CPF to 535k.

Can suka suka top up CPF like that? If not, then buy a bond fund with the 35k?

You are allowed to do a VC of around $37 per year. Plus a $7.5k top-up to your RA.

 

[maple96]

A retirement scenario for the pros.

Let's say my retirement portfolio is 50:50 stocks and bonds, and the bond part is fully CPF. FRS is met and not counted in the bond part.

During retirement, drawing down my portfolio every 6 months, how does rebalancing work with the bond component? Say I start with 500k stocks and 500k CPF, and I need 30k every 6 months. Now stocks bull run and my mix becomes 600k stocks 500k CPF.

Of the 100k increase in stocks, I take 30k for living expenses. Now I have 570k stocks and 500k CPF. To maintain 50:50 I trim stocks to 535k and top up CPF to 535k.

Can suka suka top up CPF like that? If not, then buy a bond fund with the 35k?

If u have 500k in CPF, are these in OA/SA only?

If the stock market crash and your stocks become 250k for a few years, how are u going to achieve your 50:50?

 

[dork32]

If u have 500k in CPF, are these in OA/SA only?

If the stock market crash and your stocks become 250k for a few years, how are u going to achieve your 50:50?

withdraw 125k from cpf then buy stock

 

[polyglob]

If u have 500k in CPF, are these in OA/SA only?

500k in CPF excludes FRS and MA. Assume age > 55.

If the stock market crash and your stocks become 250k for a few years, how are u going to achieve your 50:50?

As another poster replied, take out from CPF and buy stocks until their ratio 50:50. But it will be a big test of nerves: 500k drop to 250k, take out money from the safe steady part and buy more of the part that dropped big in value.

Meaning also must tighten the belt, spend less!

 

[SBC]

500k in CPF excludes FRS and MA. Assume age > 55.



As another poster replied, take out from CPF and buy stocks until their ratio 50:50. But it will be a big test of nerves: 500k drop to 250k, take out money from the safe steady part and buy more of the part that dropped big in value.

Meaning also must tighten the belt, spend less!

Well done with 500k in that basket. Hope I can attain this level too in years to come.

 

[zoneguard]

500k in CPF excludes FRS and MA. Assume age > 55.

FRS and BHS are both moving targets based on retirement cohort age.

Assume age > 55 and FRS met, CPFIS-OA and CPFIS-SA investments as well as the cash balance in the Investment Account can all be withdrawn or transferred to CDP if applicable (meaning the investments are securities that can be kept at CDP). https://www.cpf.gov.sg/members/FAQ/...stment Schemes&folderid=11851&ajfaqid=2186946

 

[henrylbh]

FRS and BHS are both moving targets based on retirement cohort age.

Assume age > 55 and FRS met, CPFIS-OA and CPFIS-SA investments as well as the cash balance in the Investment Account can all be withdrawn or transferred to CDP if applicable (meaning the investments are securities that can be kept at CDP). https://www.cpf.gov.sg/members/FAQ/...stment Schemes&folderid=11851&ajfaqid=2186946

From 55 upon meeting FRS, one has option to close CPFIA.

Upon closure, cash balance in CPFIA will be refunded to the member and shares will be transferred to personal CDP account (at prevailing fee).

Proceeds from disposal of shares will go directly to the person. The shares will no longer be protected from creditors and proceed cannot go back to CPF unless one has gap to make voluntary contribution.

This is one way to take out CPF money from OA without touching balance in SA, if any.

Closing and re-opening CPFIA subsequently will also reset the available stock limit.

 

[henrylbh]

As another poster replied, take out from CPF and buy stocks until their ratio 50:50

If he wants to take out money from CPF to buy stocks, he has to first empty his SA before OA. And he cannot subsequently put back the money into OA/DS unless by voluntary contribution, subject to annual limit.

If he uses OA to buy stocks to balance his shares/'bonds' holdings, the purchase of stocks is subject to available 35% stock limit.

 

[w1rbelw1nd]

If he wants to take out money from CPF to buy stocks, he has to first empty his SA before OA. And he cannot subsequently put back the money into OA/DS unless by voluntary contribution, subject to annual limit.

If he uses OA to buy stocks to balance his shares/'bonds' holdings, the purchase of stocks is subject to available 35% stock limit.

I think it makes more sense to keep the money in CPF, even if you want to invest. Just do STI ETF or unit trusts lo.

 

[henrylbh]

I think it makes more sense to keep the money in CPF, even if you want to invest. Just do STI ETF or unit trusts lo.

Provided he considers unit trust and or ETF as stocks.

 

[w1rbelw1nd]

Provided he considers unit trust and or ETF as stocks.

OK, I should have bee clear, ETFs and unit trusts with underlying equity exposure in it

 

[polyglob]

If he wants to take out money from CPF to buy stocks, he has to first empty his SA before OA. And he cannot subsequently put back the money into OA/DS unless by voluntary contribution, subject to annual limit.

If he uses OA to buy stocks to balance his shares/'bonds' holdings, the purchase of stocks is subject to available 35% stock limit.

Ok. So using purely CPF as bond component isn't straightforward during retirement draw-down phase.

Looks like need another chunk of cash to build a bond component separate from CPF.

 

[polyglob]

Provided he considers unit trust and or ETF as stocks.

I don't buy unit trusts anymore. I do buy stock ETFs and consider them part of my stock portfolio.

 

[polyglob]

I think it makes more sense to keep the money in CPF, even if you want to invest. Just do STI ETF or unit trusts lo.

In my scenario I am more concerned with adding to CPF (the bond part of my portfolio) during rebalancing. Based on replies there are various restrictions. Looks like having a separate bond holding built from cash will make the rebalancing mechanics easier.

 

[Value.Matrix]

From 55 upon meeting FRS, one has option to close CPFIA.

Upon closure, cash balance in CPFIA will be refunded to the member and shares will be transferred to personal CDP account (at prevailing fee).

Proceeds from disposal of shares will go directly to the person. The shares will no longer be protected from creditors and proceed cannot go back to CPF unless one has gap to make voluntary contribution.

This is one way to take out CPF money from OA without touching balance in SA, if any.

Closing and re-opening CPFIA subsequently will also reset the available stock limit.

Fantastic way, nice to know. But i heard to reopen the CPFIS, you need to take the sgx quiz haha.

 

[Value.Matrix]

I think it makes more sense to keep the money in CPF, even if you want to invest. Just do STI ETF or unit trusts lo.

Not really. CPF-OA has a list of restrictions for investment. Cash has unlimited (but also susceptible to scams), though most would go TD ameritrade/charles swab etc brokers to buy overseas stock instead. So cash is still king imho.

 

[maple96]

In my scenario I am more concerned with adding to CPF (the bond part of my portfolio) during rebalancing. Based on replies there are various restrictions. Looks like having a separate bond holding built from cash will make the rebalancing mechanics easier.

So finally u got your answer or still no answer?

Skenny has more than 1m in his CPF, he is above 55. I wonder how much stocks is he holding?