CPF Interest

[BBCWatcher]

cos some people believe CPF money is not theirs until taken out. That's why every election opposition uses this tactic to get votes, saying cpf is scam and not our money

I did ask why somebody would rationally do such a silly thing.

This is the same government printing the money, building HDB units, collecting taxes, and occasionally executing drug dealers, isn't it?

Though I am for cPF but to certain extend is not wrong...u cant even withdraw at will..can't use it during an emergency...not wrong

No, that is dead wrong when a member reaches age 55. Any surplus funds (not set aside for CPF LIFE and Medisave) are then available to the member, on demand, in any increment (and as often as desired, up to the full remaining surplus balance). Those funds are also earning at least 2.5% interest for the life of the member and a bit beyond, better than any bank account. And those funds are fully government guaranteed (not just the first $50K) and fully shielded from creditors and court judgments, something no bank offers.

It's absolutely, genuinely crazy to withdraw those funds, unless they're the lowest yielding funds available to you for immediate needs -- and then only withdraw as much as you need.

....Like I've said many times, where are my invitations to these wild, bacchanalic 55th birthday parties, with all these middle aged Singaporeans drinking as much high priced CPF-funded champagne as possible? I want to go! I'll help you spend/drink your (stupid) CPF withdrawals!

 

[havetheveryfun]

Though I am for cPF but to certain extend is not wrong...u cant even withdraw at will..can't use it during an emergency...not wrong

If is truly yours..it should be able to withdraw when u need it.

Govt like to span it like is for retirement plan and stuff...but someone who is already dying with all the medical bills I dont think still can wait till 65? Haha

Why u see a lot of ppl having no savings even when they reach 65 and unable to work anymore, you will realize how important it is

 

[kehyi4]

..but someone who is already dying with all the medical bills I dont think still can wait till 65? Haha

erm... if you are really dying, you *can* withdraw your CPF:

CPF Withdrawals on Other Grounds
Withdrawal of CPF on medical grounds
Who is eligible?
You can apply to withdraw your CPF savings on medical grounds if you:
* are physically or mentally incapacitated from ever continuing in any employment; or
* have a severely impaired life expectancy; or
* lack capacity within the meaning of Section 4 of the Mental Capacity Act (MCA) and the lack of capacity is likely to be permanent; or
* are terminally ill.

 

[frenchbriefs]

erm... if you are really dying, you *can* withdraw your CPF:

CPF Withdrawals on Other Grounds
Withdrawal of CPF on medical grounds
Who is eligible?
You can apply to withdraw your CPF savings on medical grounds if you:
* are physically or mentally incapacitated from ever continuing in any employment; or
* have a severely impaired life expectancy; or
* lack capacity within the meaning of Section 4 of the Mental Capacity Act (MCA) and the lack of capacity is likely to be permanent; or
* are terminally ill.

does unemployment for many years qualify for incapacitation from any employment?

 

[dgeralds]

No.

That is why I don't like CPF system though i benefit.

It's like you have no work now and struggling to put food on the table; but your money is locked up for retirement!

does unemployment for many years qualify for incapacitation from any employment?

 

[akwl88]

erm... if you are really dying, you *can* withdraw your CPF:

CPF Withdrawals on Other Grounds
Withdrawal of CPF on medical grounds
Who is eligible?
You can apply to withdraw your CPF savings on medical grounds if you:
* are physically or mentally incapacitated from ever continuing in any employment; or
* have a severely impaired life expectancy; or
* lack capacity within the meaning of Section 4 of the Mental Capacity Act (MCA) and the lack of capacity is likely to be permanent; or
* are terminally ill.

from which accounts?

 

[akwl88]

​

from which accounts?

If your application is approved under Condition (i) to (iii), you will be able to withdraw from your Ordinary, Special and Retirement Accounts, the higher of

Up to $5,0001; or
Savings after setting aside a reduced Retirement Sum in your Retirement Account.
You will also receive monthly payouts from the amount set aside in your Retirement Account (subject to a minimum of $450) until the balance is fully drawn.

If your application is approved under Condition (iv), you will be able to fully withdraw the savings in your CPF Ordinary, Special and Retirement Accounts.

1 Excludes monies received under the Retirement Sum Topping Up Scheme

 

[BBCWatcher]

It's like you have no work now and struggling to put food on the table; but your money is locked up for retirement!

As bad as it is to be struggling to make ends meet when you're still able to earn an income, it's much, much worse if you're struggling to make ends meet when you're elderly and much less able to earn an income.

Part of CPF pushes income into your elder years, because practically everybody grows old. And for those who won't grow old -- those diagnosed with a terminal illness, for example -- exceptional withdrawals are available.

It's hard to argue with this logic -- it makes sense.

 

[LiteHouse]

I do business with many financial institutions that take a couple days (or more) to run end of year statements, including interest credits. And it’s perfectly fine. One’s relationship with CPF usually spans many decades, or even a century.

One fairly unusual aspect of CPF is that they’ve got to back out contributions that exceeded the CPF Annual Limit before they calculate and credit interest. Those contribution reversals are a bit complicated.

Contributions that exceed the Annual Limit will be flagged out in Feb/Mar of the following year. Interest refund will be initiated in the following year too. I don't think these 2 processes are done at the end of the year. I have experience in receiving the refunded interests.

 

[henrylbh]

My contribution to MA at end of Dec excceeded BHS and I got refund by Mar.

 

[JuniorLion]

Contributions that exceed the Annual Limit will be flagged out in Feb/Mar of the following year. Interest refund will be initiated in the following year too. I don't think these 2 processes are done at the end of the year. I have experience in receiving the refunded interests.

Computation of the amount to refund is only in February for the following reason:
For some companies, your December contribution may be only be provided in January (but flagged as December). In this case, then you may have accidentally went over the Annual Limit if you had topped up in December.

By Feb 1, it would be clear if your December contribution is coming in or not. Hence, the computation will take place by then.

 

[icyflame]

No.

That is why I don't like CPF system though i benefit.

It's like you have no work now and struggling to put food on the table; but your money is locked up for retirement!

It is precisely for this group of people that CPF controls are important. If everyone knows that they can withdraw from CPF as long as they are unemployed, there will be a group of people who will stay unemployed so that they can"withdraw".

What then after they reach retirement and got no money inside? Who will end up paying? Government? By raising income tax rate? Not everyone is responsible in managing their money. Some will spend whatever they have.

 

[knightdreamer]

It is precisely for this group of people that CPF controls are important. If everyone knows that they can withdraw from CPF as long as they are unemployed, there will be a group of people who will stay unemployed so that they can"withdraw".

What then after they reach retirement and got no money inside? Who will end up paying? Government? By raising income tax rate? Not everyone is responsible in managing their money. Some will spend whatever they have.

think generally people are 'fine' with CPF. but what we don't like is that they keep pushing the payout age

 

[BBCWatcher]

What then after they reach retirement and got no money inside? Who will end up paying? Government? By raising income tax rate?

Yes, exactly. The general taxpaying public would shoulder this burden otherwise. Since Singapore's overall tax system is only weakly progressive, "the general taxpaying public" really means mostly the middle class.

CPF is, mostly, society's defense against irresponsible individuals who would otherwise commit personal financial malpractice -- to prevent (to a reasonable degree) citizens from becoming taxpayer burdens. I can write "citizens" here because, in practice, it's at least much harder for Permanent Residents and foreigners to become substantial burdens on Singaporean society. PRs are possible future citizen-burdens, so they're obliged to be CPF members.

 

[Perisher]

It is precisely for this group of people that CPF controls are important. If everyone knows that they can withdraw from CPF as long as they are unemployed, there will be a group of people who will stay unemployed so that they can"withdraw".

What then after they reach retirement and got no money inside? Who will end up paying? Government? By raising income tax rate? Not everyone is responsible in managing their money. Some will spend whatever they have.

Just give $$ for unemployed for 6 month... No withdrawal after that for 3 years.

All these Tnc, can just figure out.

 

[BBCWatcher]

think generally people are 'fine' with CPF. but what we don't like is that they keep pushing the payout age

When CPF began in 1955, members were allowed to withdraw every penny as early as age 55. The Minimum Sum Scheme began in 1987, and the minimum age to start drawing down the MSS (and now CPF LIFE) was progressively raised to age 65.

But there is still an age 55 withdrawal option available, usually with at least $5,000 available to withdraw. That vestige of the 1955 program construction still exists. It's really the "Don't be an idiot!" MSS of 1987 that changed the game, then bridged to lifetime income with CPF LIFE.

I haven't found exactly the right data on life expectancies, but I did find data on Singaporean life expectancies at age 65 in 1960 (8.3 years) and in 2016 (20.8). So yes, the withdrawal age rose from 55 to 65 (with some withdrawal still allowed at 55), but life expectancy at age 65 increased even more (about 12.5 years). If CPF rules had merely kept pace with life expectancies then CPF LIFE would only start paying at age 67.5. But it's 65, and the government says it's going to stay there, at least for a long time.

Now, if I were making policy, I'd probably allow CPF members to start ERS-level CPF LIFE payouts (or FRS-level with property pledge) under the CPF LIFE Escalating Plan (only) as early as age 62, assuming the math still works. For those below FRS-level it'd still have to be minimum age 65, then with a choice of payout plans. I'm perfectly OK with the idea of allowing earlier start dates as long as minimum lifetime income needs are adequately satisfied.

 

[pcmdan]

I did ask why somebody would rationally do such a silly thing.

This is the same government printing the money, building HDB units, collecting taxes, and occasionally executing drug dealers, isn't it?


No, that is dead wrong when a member reaches age 55. Any surplus funds (not set aside for CPF LIFE and Medisave) are then available to the member, on demand, in any increment (and as often as desired, up to the full remaining surplus balance). Those funds are also earning at least 2.5% interest for the life of the member and a bit beyond, better than any bank account. And those funds are fully government guaranteed (not just the first $50K) and fully shielded from creditors and court judgments, something no bank offers.

It's absolutely, genuinely crazy to withdraw those funds, unless they're the lowest yielding funds available to you for immediate needs -- and then only withdraw as much as you need.

....Like I've said many times, where are my invitations to these wild, bacchanalic 55th birthday parties, with all these middle aged Singaporeans drinking as much high priced CPF-funded champagne as possible? I want to go! I'll help you spend/drink your (stupid) CPF withdrawals!

Pls lah..when I am age 40 let's say I got no saving and stuff...or really die die need money u think I can wait till 55?

People always talk about retirement and stuff..what burden and stuff .at the point I need it is what is most impt...if I can't even survive tom...talk what about retire and govt have to pay for this group of people and what not.

Honestly...CpF if is my money...I should have a say when I wan to use it.. not set aside for retirement and stuff.

Give another e.g.
.someone with and en Bloc flat alr gotten hdb confirmation on a new BTo.

Due to the flat age...CpF will be freeze even if your cpF have 300k and you are age 30. If is your $$ why can't you use your cpf to cont servicing the old flat loan but got freezed

 

[pcmdan]

Why u see a lot of ppl having no savings even when they reach 65 and unable to work anymore, you will realize how important it is

once u see how many people die b4 65 u know how less important cpf is

 

[BBCWatcher]

Just give $$ for unemployed for 6 month...

That's unemployment insurance, and many countries have it. Singapore does not, although Singapore has also had fairly tight (or tighter) labor markets for most of its history.

Often there's a waiting period before UI claim eligibility. For example, maybe you have to wait one month after involuntary job loss, but then you can claim for up to six months (or longer if the national unemployment rate is above a certain threshold).

How about auto-enrolling CPF members in UI as soon as their first dollars flow into their Ordinary Accounts, paid annually with OA dollars? Members can opt-out when they amass and maintain at least $10,000 of Singapore Savings Bonds (SSBs)?

 

[pcmdan]

erm... if you are really dying, you *can* withdraw your CPF:

CPF Withdrawals on Other Grounds
Withdrawal of CPF on medical grounds
Who is eligible?
You can apply to withdraw your CPF savings on medical grounds if you:
* are physically or mentally incapacitated from ever continuing in any employment; or
* have a severely impaired life expectancy; or
* lack capacity within the meaning of Section 4 of the Mental Capacity Act (MCA) and the lack of capacity is likely to be permanent; or
* are terminally ill.

oh actually i know that but forgotten about it. when i was typing it. i hav given another e.g