CPF life questions

Rooney3 · Apr 23, 2017

Have some enquiries hopefully people can clear it up.

1) At 55, 161k is transferred from OA and SA to RA. The yearly interest in RA cannot be withdrawn as it's earmarked for CPF Life correct?

2) If I have 100k remaining in my OA and SA after the transfer, it will continue getting the 2.5% and 4% interest correct?

apatheticme · Apr 23, 2017

From what I know, yes and yes.

BBCWatcher · Apr 23, 2017

Rooney3 said:
1) At 55, 161k is transferred from OA and SA to RA. The yearly interest in RA cannot be withdrawn as it's earmarked for CPF Life correct?

If you make a property pledge and choose the Basic Retirement Sum, that may not be correct.

2) If I have 100k remaining in my OA and SA after the transfer, it will continue getting the 2.5% and 4% interest correct?

Correct. Possibly with some bonus interest. (I can't remember whether the RA gets all the bonus interest or not.)

apatheticme · Apr 23, 2017

RA gets all the bonus interest probably.

https://www.cpf.gov.sg/Members/FAQ/schemes/other-matters/others#faq#faq17218

Rooney3 · Apr 23, 2017

Just what I thought. So if going for the default FRS, there's no interest that can be seen (and hence used for anything) in the RA. It'll be directly pumped into lifelong plan.

I had an insurance agent ask a fellow family member to continue payment of a savings plan through the RA interest gained after putting aside FRS. Sigh.

akwl88 · Apr 23, 2017

Rooney3 said:
Just what I thought. So if going for the default FRS, there's no interest that can be seen (and hence used for anything) in the RA. It'll be directly pumped into lifelong plan.

I had an insurance agent ask a fellow family member to continue payment of a savings plan through the RA interest gained after putting aside FRS. Sigh.

Insurance saving plan can beat cpf?

That's new

useless · Apr 23, 2017

If you have to rely on your CPF / insurance plan / endowment for retirement, you're most probably screwed.

Rooney3 · Apr 23, 2017

akwl88 said:
Insurance saving plan can beat cpf?

That's new

Think that's not what was meant. To be supplementary. But I had already read before that interest for FRS is set aside in RA and cannot be withdrawn to be used for anything. Today I read in CPF website you actually do not see the interest being credited (which is in fact being reinvested into their lifelong plan).

henrylbh · Apr 24, 2017

Rooney3 said:
Have some enquiries hopefully people can clear it up.

1) At 55, 161k is transferred from OA and SA to RA. The yearly interest in RA cannot be withdrawn as it's earmarked for CPF Life correct?

BBCWatcher said:
If you make a property pledge and choose the Basic Retirement Sum, that may not be correct.

Rooney3 said:
If I have 100k remaining in my OA and SA after the transfer, it will continue getting the 2.5% and 4% interest correct?

BBCWatcher said:
Correct. Possibly with some bonus interest. (I can't remember whether the RA gets all the bonus interest or not.)

The one before you already given the short answer and you complicate the matter with a long answer :s13:

When his 161k is transferred to RA at 55, it will remain there and continue to grow with prevailing interest. He has up to age 70 to decide the CPF Life plan. If he chooses, Basic, part of his RA will be deducted for LIF (and balance RA will continue to earn interest to fund payout). If he chooses Standard, his whole RA will be deducted for LIF (and in this case is no issue on interest).

At 55, whatever left after transfer to RA will continue to earn the prevailing interest (without additional interest) for the respective accounts and he can choose to withdraw all or part anytime except MA.

Rooney3 · Apr 24, 2017

henrylbh said:
The one before you already given the short answer and you complicate the matter with a long answer

When his 161k is transferred to RA at 55, it will remain there and continue to grow with prevailing interest. He has up to age 70 to decide the CPF Life plan. If he chooses, Basic, part of his RA will be deducted for LIF (and balance RA will continue to earn interest to fund payout). If he chooses Standard, his whole RA will be deducted for LIF (and in this case is no issue on interest).

At 55, whatever left after transfer to RA will continue to earn the prevailing interest (without additional interest) for the respective accounts and he can choose to withdraw all or part anytime except MA.

So if the person at 55 already confirms wants at least the FRS, upon the 161k transfer to RA, will the 1) RA continue to grow interest that can be seen by the individual, 2) can this interest be withdrawn without affecting the $1200 payout on turning 65.

highsulphur · Apr 24, 2017

The interest in RA stays in RA and cannot be withdrawn. The principal plus interest will ultimately be used to fund your cpf life plan

BBCWatcher · Apr 24, 2017

henrylbh said:
The one before you already given the short answer and you complicate the matter with a long answer

No, it's an important clarification. If you qualify for and choose the BRS, then you may be able to withdraw some of your RA and RA interest.

If CPF is complicated, it's complicated. There's nothing either one of us can do about that. A one sentence explanation of how CPF actually works doesn't make it any more complicated. Your longer explanation, well....

henrylbh · Apr 24, 2017

BBCWatcher said:
No, it's an important clarification. If you qualify for and choose the BRS, then you may be able to withdraw some of your RA and RA interest.

If CPF is complicated, it's complicated. There's nothing either one of us can do about that. A one sentence explanation of how CPF actually works doesn't make it any more complicated. Your longer explanation, well....

You didn't clarify but add complication or confusion by saying that with BRS he may withdraw some RA and RA interest. He is asking about interest on FRS and nothing about BRS (that was not in his mind). Now you add further confusion by repeating "some of your RA and RA interest". With BRS, one can withdraw some RA but not the interest thereon.

CPF is not complicated, but not so transparent or the website not comprehensive enough. It's people fed with wrong info or piece meal info that make matters more complicating if not confusing.

BBCWatcher · Apr 24, 2017

henrylbh said:
He is asking about interest on FRS and nothing about BRS (that was not in his mind).

Henry, I'm pretty sure neither you nor are I are mind readers. Go back to the original post. There was no "If I stick with the FRS...." condition. A BRS level CPF LIFE commitment is an option for some. I mentioned it, in one sentence. So sue me. Good grief.

henrylbh · Apr 24, 2017

Really good grief :s13:

wealth_farmer · Apr 24, 2017

Hi I'm curious about this too, specifically the property charge clause in BRS. I wasn't able to find more info on this on the CPF website but if any of you could share the link here that I missed, that'll be great too.

Basically how does property charge work? Is it for both HDB and private property? So if I pledge it to CPF, that means I no longer own it and cannot sell it or bequeath the property to my children?

antonpoh · Apr 24, 2017

Rooney3 said:
So if the person at 55 already confirms wants at least the FRS, upon the 161k transfer to RA, will the 1) RA continue to grow interest that can be seen by the individual, 2) can this interest be withdrawn without affecting the $1200 payout on turning 65.

Are you 55yo now? If not forget all about this 161k amount(actually it's now 166k). The FRS for you is not set yet.

And the $1200 payout will change too when you hit 55yo.

badsector · Apr 24, 2017

wealth_farmer said:
Hi I'm curious about this too, specifically the property charge clause in BRS. I wasn't able to find more info on this on the CPF website but if any of you could share the link here that I missed, that'll be great too.

Basically how does property charge work? Is it for both HDB and private property? So if I pledge it to CPF, that means I no longer own it and cannot sell it or bequeath the property to my children?

u still own the property. but if you sell your property, you will refund the pledged amount with interest.

kehyi4 · Apr 24, 2017

wealth_farmer said:
Hi I'm curious about this too, specifically the property charge clause in BRS. I wasn't able to find more info on this on the CPF website but if any of you could share the link here that I missed, that'll be great too.

Basically how does property charge work? Is it for both HDB and private property? So if I pledge it to CPF, that means I no longer own it and cannot sell it or bequeath the property to my children?

erm... it's all in the CPF FAQ you know:

https://www.cpf.gov.sg/Members/Schemes/schemes/retirement/retirement-sum-scheme

Basically, the property pledge allows you to opt for BRS and withdraw the rest from your RA. In return, you promise to "return" the amount you withdrew to your RA when you sell your property

That's about it. The property is still yours. And if you never sell it, you never have to "return" the money you withdrew

OngHuatHuat · Apr 24, 2017

Actually this 1200 payout has risen quite a bit, I used to remember the figure to be 1000 + a bit only.
Seems rising interest rate helps.

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