CPF Easy Info Thread. :)

[dork32]

He will use his spare money for gambling

buy some 4D, buy some vegetable, and buy some beer that his life

so if you are going to put money in such that your dad have more for 4D and beer, do you think this is a good decision?

your case is different from henry. both of you want to optimize. but henry's dad allows him full control of the cpf. Additional payouts due to topups are reinvested. your dad waste additional payout.

 

[dork32]

yes, become my father is very stupid and he just drag the housing loan

still 7.5 years to go man

i also drag my housing loan. at the rate i am going, i can only finish paying when i am 76. i never once tot that i am stupid.

 

[dork32]

guys

if my father OA is about 4k

but his MA is about 49k

if the housing loan finish up all his OA

what will happen? do he have to pay in cash? can withdraw from MA?

cannot use ma for house. cannot withdraw ma. must use cash

 

[BBCWatcher]

What I'm hearing is this.
Let's say you have some preexisting condition and don't expect to live very long. Maybe until 75yo.
What should a person do then?

If you feel you can reliably do better than about 3.2% p.a. interest, then you'd consider alternatives. Otherwise, and assuming you maintain sufficient liquidity, top up your Retirement Account to the Enhanced Retirement Sum, defer CPF LIFE payouts to age 70, choose the Basic Plan, and have a CPF nomination in place.

CPF life sounds great for someone expecting to live a long life. What if they don't expect to live a long life?

They (and their nominees) still do quite well compared to currently available alternatives.

if my father OA is about 4k
but his MA is about 49k
if the housing loan finish up all his OA
what will happen? do he have to pay in cash?

If he exhausts his Ordinary Account and still has an outstanding home loan (mortgage) then there are three possible choices:

1. If someone else also has title to the property, that person can use his/her Ordinary Account to service the mortgage.

2. Cash works, from whatever legal source.

3. Sell the home, possibly through the HDB Lease Buyback Scheme or Silver Support Scheme if he qualifies, as applicable.

can withdraw from MA?

No. MediSave is reserved for qualified medical expenses in Singapore, MediShield Life premiums, and base Integrated Shield plan premiums.

 

[dork32]

guys

if my father OA is about 4k

but his MA is about 49k

if the housing loan finish up all his OA

what will happen? do he have to pay in cash? can withdraw from MA?

i estimated his ra to be 50k to 60k. you can use the payout from this to pay the house loan.

 

[candy crush]

i estimated his ra to be 50k to 60k. you can use the payout from this to pay the house loan.

Hi guys

this is my father CPF

basically this is all the info I have

dun ask where he spend his money

most likely all on the house

 

[henrylbh]

i estimated his ra to be 50k to 60k. you can use the payout from this to pay the house loan.

you know why your estimate is completely out. He has zero RA.

$395 is the amount of housing instalment paid by OA.

 

[henrylbh]

Hi guys

this is my father CPF

basically this is all the info I have

dun ask where he spend his money

most likely all on the house

Find out from CPFB whether he would automatically re-commence payout if you top up his RA. If not auto, agree with your dad that he will not touch his RA if you top up his RA and you are his sole nominee.

 

[dork32]

Hi guys

this is my father CPF

basically this is all the info I have

dun ask where he spend his money

most likely all on the house

this is exactly wat i meant. good advice cannot be given based on half info.

people have to guess wat the other situation are. you will see very lousy advice being posted.

 

[dork32]

the other question is who will pay for the house when the oa runs out?
if your dad has some money stashed somewhere, you can put money into ra to earn better returns.
if you are the one that is paying, the payout by the ra may not be enough for the monthly installment.

more questions. if you are the one paying, are you using hdb or private loan.
if private loan, i will top up his oa and let the oa slowly pay for the loan
if hdb loan, i will use cash and pay up the loan immediately.

another question. do you have enough cash to pay it up completely if it is hdb loan.

like i say, my actions will be very different if the situation just changes slightly.

 

[BBCWatcher]

if private loan, i will top up his oa and let the oa slowly pay for the loan
if hdb loan, i will use cash and pay up the loan immediately.

Whoa, hold on there. More information required. One important background fact is that property equity, and particularly HDB leasehold equity, is highly illiquid. There are huge numbers of people, especially here in Singapore with the way HDB works, that end up with cashflow problems even though they are “property rich.” A 2.6% interest HDB loan is not an emergency, not by itself anyway.

another question. do you have enough cash to pay it up completely if it is hdb loan.

No, that’s not nearly enough even if it were a good idea. Better questions: Would you have enough liquid wealth, and are you adequately insured, so that you could cope with practically any family emergency after paying off this (low interest) mortgage? And is paying off a 2.6% interest loan the best use of discretionary dollars? The latter question seems like a definite no when 5% (yes, 5% at these levels) interest RA is available.

Another basic question is whether it’s time to sell this particular HDB leasehold and trade down (or rent), or whether to rent out a room, to generate cashflow. The Silver Support Scheme may be available to help.

 

[candy crush]

Find out from CPFB whether he would automatically re-commence payout if you top up his RA. If not auto, agree with your dad that he will not touch his RA if you top up his RA and you are his sole nominee.

can I choose which account I want to top up in CPF?

like can I choose to top up OA only instead of RA and OA?

 

[candy crush]

this is exactly wat i meant. good advice cannot be given based on half info.

people have to guess wat the other situation are. you will see very lousy advice being posted.

that why I jitao post this, so people have a clearer picture to give me better advice

 

[dork32]

this is wat i meant by horrible advice based on partial info.

topping ra would mean monthly payout for dad. if dad takes over ra and wow away the money, you call that good investment?

2.6% is not a disaster. wat is the point of paying 2.6% when you get only 2.5% in oa and 0% in your ra

 

[candy crush]

the other question is who will pay for the house when the oa runs out?

most likely my father will pay in cash in his bank account, eventually his account will run out too, eventually I have to pay too

if your dad has some money stashed somewhere, you can put money into ra to earn better returns.

aiya, I dk one la...even he have he also dun buy the "CPF" idea one

if you are the one that is paying, the payout by the ra may not be enough for the monthly installment.

more questions. if you are the one paying, are you using hdb or private loan.

all the while is HDB loan


if private loan, i will top up his oa and let the oa slowly pay for the loan
if hdb loan, i will use cash and pay up the loan immediately.

30 K, you want me to pay all in full, my total asset (include bond, stock, cash is about SGD50k+++...)

another question. do you have enough cash to pay it up completely if it is hdb loan.

I just start working 2 years ago....30K, my father is a gamble, he dun save in his raining days one

like i say, my actions will be very different if the situation just changes slightly.

reply everything on top

 

[candy crush]

you know why your estimate is completely out. He has zero RA.

$395 is the amount of housing instalment paid by OA.

Yes man....he used to work as a storeman

now a dementia stubborn old ppl with no saving or retirement plan in mind

Good luck for me

 

[dork32]

can I choose which account I want to top up in CPF?

like can I choose to top up OA only instead of RA and OA?

good thing to do.

yes you can top up oa instead.

your dad would have used a lot from the oa to pay for the house. paying back the withdrawal is not a problem

but wat is the point of putting oa for 2.5% while you pay hdb at 2.6%.

400 per month for 7 years is only 20+k. it is not a lot of money. many people have the ability to clear it up on the spot.

 

[dork32]

reply everything on top

well done.

actually it does not matter if dad believe in cpf or not. can he cede control of the cpf to you?

accumulating 50k with 2 years of working means you are quite zai. you are more than capable to handle the 30k loan. the most important thing is that you can top up the ra, get an payout of less than 395 a month and yet able to handle the loan comfortably. putting money into the ra is a wise choice, provided you can prevent dad from wasting the money. this is probably the best choice.

with 50k liquid asset and 30k loan, paying off the loan is very painful. you will suddenly feel very poor.

i will use some money maybe 5 to 10k to top up the oa if dad does not want to give you the ra payout. and i will clear up the loan with the dad's oa and my liquid cash the moment i feel comfortable with the cash on hand

 

[BBCWatcher]

this is wat i meant by horrible advice based on partial info.

topping ra would mean monthly payout for dad. if dad takes over ra and wow away the money, you call that good investment?

Yes. The problem of poor household expense management is its own problem to address and is not at all helped if (when) there’s a cashflow crisis.

2.6% is not a disaster. wat is the point of paying 2.6% when you get only 2.5% in oa and 0% in your ra

Liquidity! You cannot eat HDB leasehold equity. But I’m not the one recommending an OA redeposit. Or even necessarily keeping the current HDB leasehold.

What’s supposed to happen after the low interest loan is paid off? Who’s paying the electric bill? He’s flat broke, except for his HDB leasehold equity and medical bills (MediSave). At least with RA he gets a higher interest rate and a steady monthly income. If he mismanages his monthly income, OK, but no one necessarily has the obligation to bail him out. But he would have a monthly income and could keep himself afloat.

Also, topping up OA means he could withdraw every OA dollar the next day and head to the dog track. So I’m not a fan of that idea, even with a bank loan. Topping up RA, no. He’d have to make his dog track trips in small, monthly amounts. That’s some progress.

now a dementia stubborn old ppl with no saving or retirement plan in mind

OK, new information again. If he is legally incompetent then you should attempt to take over financial stewardship.

400 per month for 7 years is only 20+k. it is not a lot of money. many people have the ability to clear it up on the spot.

Again, that’s not enough. Candy Crush would still need adequate liquidity to cope with any family emergency — including a father with dementia — and have no better outlet for discretionary dollars than paying off a 2.6% interest loan. These are not givens.

 

[dork32]

one more important thing.

many people dont believe in cpf. i do not blame you if you dont. it probably feels that it took the whole eternity for you to reach this age. you have to wait for another eternity to see the cpf money. along the way there will be many changes to the rules.

but for your dad is different. he may not be well educated. he will be easily influence by rumours and fake news flying around. but whatever cpf rules there is, is real to him. he is old enuf to benefit from it. eg putting money into ra will result in a payout the next month. his oa and sa is live and can be withdrawn any time. there is one problem, he may not have the ability to enjoy the benefits.

but you are different. you are young working adult. you have financial power of a young person and the availability of a old person cpf account and you are the only child. to me this is the perfect combination.

it is up to you to convince him that it works.