CPF for retirement planning

[Squaredot]

I think it's not so simple as 2220*17 months.

If you get 5k pm x 12 and 8 month bonus you will still not reach the max for the year.

For those in age group 55 to 60, even 12 months' bonus will not reach the max.

I am talking about myself where cpf contribution capped at 6k , some bonus no CPF deduction. HR put it simple , EE+ ER contribute cpf for 17mth * 6k

Not sure about other situation

 

[Squaredot]

If you get 5k pm x 12 and 8 month bonus you will still not reach the max for the year.

You are right. Total CPF is 37k for 5k per month + 8m bonus. Can VC $740

CPF contribution rate will be lower for age 55-60, so will much less.
Correct?

 

[athulican]

if u're 55 now, wat would u invest in?

I would rather do the opposite, invest as much as possible now so can time exit nearer to 55 then put as much to CPF SA/RA at the age or nearing 55.

Apportioned into blue chip stocks, reits, and bonds.

 

[raven.tw]

haha u chose to misled, relying on edmw threads without doing your own due diligence!

I posted all the following in another thread, since mod dun allow me to reference/link to another thread, I copy here for your reading pleasure:

wts2013 wrote:
In summary, there are 4 ways to grow your SA faster:

1. Topup SA with cash
2. Transfer from OA to SA
3. Make VC (on top of your salary/mandatory contribution if max not hit)
4. Invest your SA

U will not be able to do 1 n 2 when SA hit the minimum sum, but still can do 3 n 4 to grow your SA.

If u got the money and can afford to do it like AK, just do it, it is worth it


wts2013 wrote:
U should focus your time and energy on growing your SA instead of worrrying over something which will never happen. CPF withdrawal age will always be 55, only change is how much u can withdraw. Now the CPF Life payout is already 65 and u can choose to defer to 70.


wts2013 wrote:
I'm very happy that CPF Life payout starts at 65 and the decision to join CPF Life can be deferred to 65. My CPF monies still remain in my account to accumulate higher interest until 65, should anything happen before 65, I get all my money back, not a single cent is lost compared to if u join CPF Life at 55.

CPF withdrawal age will always be 55, I repeat 55, and I will continue to leave the money in CPF to earn higher interests, unless I need it.

CPF should not be your only source of retirement funds.


wts2013 wrote:
CPF withdrawal age is always at 55 since CPF inception, it is still 55 at SG50 and come SG100. There is no need to change it. To control how much u can withdraw, just change the minimum sum, and this has been changed in the past and already “cast in stone” till 2020.

Why waste your time and effort focusing on things which u cannot control, instead of focusing on things which u can control like growing your CPF/SA with strategies which others had kindly shared. I only found out about these strategies recently and too late for me to practise all but I have no regrets cos I already pass the goal post with hardwork not with these super short cut strategies!

This will be my last post on this topic. It is your choice, think positive and take advantage of these opportunities or be left behind

So lets say i am 21 yo, earning about 5k a month. After cpf that makes 4k. about 1k goes to equities use about 2k i would have around 1k left. So the idea is to top CPF with that remaining (minus money for rainy day) to SA. Till my SA hits the minimum sum, then i do VC.
Am i right to say that?

 

[henrylbh]

So lets say i am 21 yo, earning about 5k a month. After cpf that makes 4k. about 1k goes to equities use about 2k i would have around 1k left. So the idea is to top CPF with that remaining (minus money for rainy day) to SA. Till my SA hits the minimum sum, then i do VC.
Am i right to say that?

If you keep doing that without withdrawing your CPF for any purpose, ceteris paribus, I roughly calculated that you will have close to $3m in your CPF accounts by age 55

 

[highsulphur]

If you keep doing that without withdrawing your CPF for any purpose, ceteris paribus, I roughly calculated that you will have close to $3m in your CPF accounts by age 55

3m in cpf by 55???

 

[henrylbh]

3m in cpf by 55???

May be my rough calculation may be wrong.

I based on 12 months' mandatory contributions (no bonus), the amount would reach 777k without interest and top-up of 7k to SA till FRS amount which is assumed to grow at 3% from 161k presently. With interest and top-ups, it would be near 3m

 

[raven.tw]

What is default for withdrawal?

So, we could do this: Transfer OA to SA up to FRS before 55, every year according to increasing FRS. At 55, pledge HDB and let CPF take BRS to RA (even though OA + SA > FRS). Leftover monies all left inside OA and SA to accumulate and can withdraw any time.

By the way, does CPF take money from SA first or OA first when creating RA?

So other than topping up to SA monthly (with cash), transfer OA to SA (does OA have any use?) till SA hits minimum amount then do VC (if SA maximum amount not hi, what does it mean by "At 55, pledge HDB and let CPF take BRS to RA (even though OA + SA > FRS). '?

Sorry, don't understand that part. Hope someone can answer me question(s).

 

[elnewbie]

It means that you pledge your property so that the amount required in your RA is only the BRS, not the FRS.

Then whatever excess above BRS can be withdrawn at age 55.

Just don't go and blow it on ATB meimeis. I've seen this happen too often, taxi drivers going to KTVs to hang $1000 flowers.

So other than topping up to SA monthly (with cash), transfer OA to SA (does OA have any use?) till SA hits minimum amount then do VC (if SA maximum amount not hi, what does it mean by "At 55, pledge HDB and let CPF take BRS to RA (even though OA + SA > FRS). '?

Sorry, don't understand that part. Hope someone can answer me question(s).

 

[RollingPig]

Hi,

Anyone enjoying tax relief by topping up yr love one cpf acc?
I understand that i can get up to 7k relief annual.

Example.

My income tax is 40k, if i top up my son SA account 7k, so i pay only 33k income tax instead?

Anyone with similar experience??

 

[highsulphur]

Hi,

Anyone enjoying tax relief by topping up yr love one cpf acc?
I understand that i can get up to 7k relief annual.

Example.

My income tax is 40k, if i top up my son SA account 7k, so i pay only 33k income tax instead?

Anyone with similar experience??

The 7k is deducted from your taxable income, not your tax payable.

 

[flikmy]

Hi,

Anyone enjoying tax relief by topping up yr love one cpf acc?
I understand that i can get up to 7k relief annual.

Example.

My income tax is 40k, if i top up my son SA account 7k, so i pay only 33k income tax instead?

Anyone with similar experience??

Also, I think you can only claim tax relief when topping up for spouse or parent's accounts. Topping up for children's account doesn't count for tax relief.

 

[RollingPig]

Also, I think you can only claim tax relief when topping up for spouse or parent's accounts. Topping up for children's account doesn't count for tax relief.

Oh damn, thanks for highlighting

The 7k is deducted from your taxable income, not your tax payable.

ooo, ok that is not very beneficial.

 

[havetheveryfun]

Oh damn, thanks for highlighting



ooo, ok that is not very beneficial.

well the average sinke probably don't pay so much.. 7k of income tax payable? u must be a really high earner

 

[elnewbie]

If your income tax is 10% bracket, 10% of $7k is $700 cold hard cash.

It's like getting a 14% ROI in your first year, followed by 4% compounded annually.

A few years ago, CPF also allowed us to pay this by credit card so we were using this to meet whatever minimum spend requirements for the various credit card promos. Eg Frank which provided 5% cash back.

I can tell you that my SA balance 10 years ago was zero. Now it's $135K. I started doing this back in 2007.

Magic of compounding.

Oh damn, thanks for highlighting



ooo, ok that is not very beneficial.

 

[tiny]

So other than topping up to SA monthly (with cash), transfer OA to SA (does OA have any use?) till SA hits minimum amount then do VC (if SA maximum amount not hi, what does it mean by "At 55, pledge HDB and let CPF take BRS to RA (even though OA + SA > FRS). '?

Sorry, don't understand that part. Hope someone can answer me question(s).

DO NOT transfer all your OA to your SA IF you have plans to buy a home in the next few years. SA and MA money cannot be used to make payment for house. Those clowns who have transferred out their entire OA and shout the power of compound interest need to have a sum of money ready to offset the computation of outstanding housing loan.

 

[hogrider88]

DO NOT transfer all your OA to your SA IF you have plans to buy a home in the next few years. SA and MA money cannot be used to make payment for house. Those clowns who have transferred out their entire OA and shout the power of compound interest need to have a sum of money ready to offset the computation of outstanding housing loan.

they are not clowns, they r cash rich!

 

[SBC]

There are many hidden dragons in SSI.
Not me, at least for now.

I have done small top up to SA, as I am hitting FRS next year.
Like the second overflow from MA allocation to OA.

Huge debts on my property, > 800k currently.

 

[elnewbie]

If you have spare cash and If you had used your CPF to pay for your property, you can do a partial Capital repayment back to your OA account.

That way, you'll get 2.5% interest on your excess funds.

There are many hidden dragons in SSI.
Not me, at least for now.

I have done small top up to SA, as I am hitting FRS next year.
Like the second overflow from MA allocation to OA.

Huge debts on my property, > 800k currently.

 

[SBC]

As my loan is only in its first year, I had just made minor adjustment to my loan. Total loan per month is 4K plus.

Just adjusted loan to charge about 1k using my cash & about 3k using CPF. CPF OA about 80k now.

With this adjustment, the intent is to have my CPF to last longer & earning the 2.5% on my outstanding.

Loan interest at 1.7% now.

Will review my cash-CPF proportion again during year end.