CPF SA Shielding hack - RIP (Obsolete)

[dork32]

Has anyone on this thread actually executed an SA shield maneuver? I know someone turning 55 this year and they expressed a lot of frustration about it. For example, if you try to use a T-bill you can’t be sure how many T-bills you will be awarded when you apply. He is considering just investing in something more simple, but relatively safe and liquid on the SGX like ES3 for just a few days until his birthday passes. Does anyone have any actual experience to share?

go read wat lorna wrote

 

[dork32]

Say, OA = 50K, SA = 200K
FRS = 186K ( 55yrs @ 2021)

Before reaching 55yrs old, do 160K SA shielding.
@ 55yrs, OA =0, RA = 50K+40K =90K

Then I Cash Top up into RA = 96K, hence final RA = 186K .


In future, if I return back the SA shielding , then SA = 160K ( assume no loss/gain), can I withdraw any amt, as and when I need the $ ?

you are right, this is the purpose of shielding. keep your sa intact

 

[celtosaxon]

Specifically a Singapore dollar bond unit trust via a zero fee platform. While it’s theoretically possible to use a T-bill, mechanically it’s too difficult and expensive.

I would assume a bond ETF isn’t advisable due to lack of liquidity? My friend was looking at unit trusts as well, but he said the fees and expenses were a big turn off, and that is why he was considering ES3. He was planning to buy it just before his birthday, then get right out afterwards, so that exposure to risk is limited and expenses are minimized.

 

[reddevil0728]

I would assume a bond ETF isn’t advisable due to lack of liquidity? My friend was looking at unit trusts as well, but he said the fees and expenses were a big turn off, and that is why he was considering ES3. He was planning to buy it just before his birthday, then get right out afterwards, so that exposure to risk is limited and expenses are minimized.

i am not sure about "exposure to risk is limited". if there is a sudden big swing in the market for even 1 day, the shielding can go very very wrong

 

[yokine3a]

I would assume a bond ETF isn’t advisable due to lack of liquidity? My friend was looking at unit trusts as well, but he said the fees and expenses were a big turn off, and that is why he was considering ES3. He was planning to buy it just before his birthday, then get right out afterwards, so that exposure to risk is limited and expenses are minimized.

Phillip poems doesn't charge any fees for its UT investment using CPF monies, did your friend approach bank instead?

 

[celtosaxon]

Phillip poems doesn't charge any fees for its UT investment using CPF monies, did your friend approach bank instead?

Yes, he checked with his bank, and I think a few others too. So for Philip there are no fees to buy or sell UT, meaning he could get in and get out a few days later without losing anything (assuming the price of the bond fund doesn’t change during that time)?

 

[yokine3a]

Yes, he checked with his bank, and I think a few others too. So for Philip there are no fees to buy or sell UT, meaning he could get in and get out a few days later without losing anything (assuming the price of the bond fund doesn’t change during that time)?

Theoretically yes, though I have not used cpf money to invest in any UT, but my cash investment in their UT is zero charge for buy & sell.

Below is what I saw from their website :
What is CPF Investment Scheme (CPFIS)?
The CPF Investment Scheme (CPFIS) allows CPF members to invest part of their CPF-OA, SA and/or SRS savings into Unit Trusts.

To invest with CPF-OA or SRS, simply open a CPF/SRS Investment Account with one of the 3 CPF agent banks (DBS/POSB, UOB, or OCBC).

Note: If you want to invest only the monies in your CPF Special Account (CPF-SA), you are not required to open a CPF Investment Account.

So from above, for SA shield, you can go to Phillip or any retailer. But OA shield must go thru bank.

 

[HWZ1973]

Theoretically yes, though I have not used cpf money to invest in any UT, but my cash investment in their UT is zero charge for buy & sell.

Below is what I saw from their website :
What is CPF Investment Scheme (CPFIS)?
The CPF Investment Scheme (CPFIS) allows CPF members to invest part of their CPF-OA, SA and/or SRS savings into Unit Trusts.

To invest with CPF-OA or SRS, simply open a CPF/SRS Investment Account with one of the 3 CPF agent banks (DBS/POSB, UOB, or OCBC).

Note: If you want to invest only the monies in your CPF Special Account (CPF-SA), you are not required to open a CPF Investment Account.

So from above, for SA shield, you can go to Phillip or any retailer. But OA shield must go thru bank.

But for Phillp account, it’s only linked to CPF Investment Account (OA).
How to do SA shield?

 

[zoneguard]

But for Phillp account, it’s only linked to CPF Investment Account (OA).
How to do SA shield?

https://unittrust.poems.com.sg/all-about-funds/fund-finder/

Click 'Advanced Criteria'

Asset Class->Fixed Income
Investment Type->CPFSAIA
Geographic->Singapore
Currency->SGD

Click 'Find'.

Choose from the list of UTs.

 

[owenowenno]

But for Phillp account, it’s only linked to CPF Investment Account (OA).
How to do SA shield?

Actual EG

A few day before my 55 birthday , i draw out 222k
Buy Nikko Am Shenton short term bonds unit trust via Poems account

28 May 20 INV 0.00 -222,000.00 0.00 0.00

and sold about a month later

26 Jun 20 INV 0.00 223,407.23 0.00 0.00

Fortunately By chance i bought during a Dip and manage to sell all UT at Higher price ( all based on my birthday timing, no TA skills)

For Poems account ,May take up to 14 days to approve account opening.
Need to link CPF funds to Poems for withdrawal
Online transaction on Poems need your Poems password
Trade is executed From Business day morning 9am to Before 3pm
Price bought and Sold is KNOWN ONLY the next day as it is Unit trust
Deduction from your Cpf is probably same day or next day
procceds from Selling is AUTO credited back to Cpf account 3- 4 days later (Official email says up to 7 days to credit to cpf)
Nikko Am is chosen Because of low expense fees approx 0.3%
The month cpf funds are withdrawn means your cpf has lower interest
Better if you Birthday is at beginning of month , less cpf interest lost as return transaction can be completed in a month instead of lossing 2 months interest
Poems quoted Buy Sell price is what u see,and what you get.
Maybe they get fees from the Unit Trust ,So no Fees charged to me by Poems

All THANKS to BBCWatcher Advice

 

[HWZ1973]

Thanks a lot! Understand perfectly!

 

[HWZ1973]

Thanks a lot finally resolved my doubts on this!

 

[rrr2015]

may i know why you sold only after a month later when you can sell once RA was formed & transfer done?

Actual EG

A few day before my 55 birthday , i draw out 222k
Buy Nikko Am Shenton short term bonds unit trust via Poems account

28 May 20 INV 0.00 -222,000.00 0.00 0.00

and sold about a month later

26 Jun 20 INV 0.00 223,407.23 0.00 0.00

 

[henrylbh]

Actual EG

A few day before my 55 birthday , i draw out 222k
Buy Nikko Am Shenton short term bonds unit trust via Poems account

Better if you Birthday is at beginning of month , less cpf interest lost as return transaction can be completed in a month instead of lossing 2 months interest

You need to invest your SA before your birthday. If your birthday is at the beginning of the month, you will certainly lose 2 months of interest and if you happen to liquidate the investment at the end of that birthday month, likely you will lose 3 months of interest.

To restrict the loss of interest to one month, you need to shield your SA before and unshield it after the birthday, all within the same month and most importantly, ensuring that the actual fund is taken from and returned to SA within the same month.

 

[JF123456]

"a few days before" .... if mine is on the 6th ( sat) , any risk to do shielding on the 1st (mon) of the birthday mth ?

 

[dork32]

Actual EG

A few day before my 55 birthday , i draw out 222k
Buy Nikko Am Shenton short term bonds unit trust via Poems account

28 May 20 INV 0.00 -222,000.00 0.00 0.00

and sold about a month later

26 Jun 20 INV 0.00 223,407.23 0.00 0.00

Fortunately By chance i bought during a Dip and manage to sell all UT at Higher price ( all based on my birthday timing, no TA skills)

For Poems account ,May take up to 14 days to approve account opening.
Need to link CPF funds to Poems for withdrawal
Online transaction on Poems need your Poems password
Trade is executed From Business day morning 9am to Before 3pm
Price bought and Sold is KNOWN ONLY the next day as it is Unit trust
Deduction from your Cpf is probably same day or next day
procceds from Selling is AUTO credited back to Cpf account 3- 4 days later (Official email says up to 7 days to credit to cpf)
Nikko Am is chosen Because of low expense fees approx 0.3%
The month cpf funds are withdrawn means your cpf has lower interest
Better if you Birthday is at beginning of month , less cpf interest lost as return transaction can be completed in a month instead of lossing 2 months interest
Poems quoted Buy Sell price is what u see,and what you get.
Maybe they get fees from the Unit Trust ,So no Fees charged to me by Poems

All THANKS to BBCWatcher Advice

poems they still charge you 0.3%. some people say fsm totally no charges

 

[zoneguard]

poems they still charge you 0.3%. some people say fsm totally no charges

Expense Ratio is priced into the fund's NAV.

FSM definitely charges platform fee for fixed income funds. Nowadays most distributors (other than banks?) don't charge sales charges. Can also consider dollarDex (Aviva) since they also have CPFIS-IA status.

 

[BBCWatcher]

"a few days before" .... if mine is on the 6th ( sat) , any risk to do shielding on the 1st (mon) of the birthday mth ?

It's a little edgy, but you can run a rehearsal by investing the minimum amount in the unit trust and see how long it takes. For example, pick the first Monday of the prior month in a week with no public holidays (assuming your 55th birthday week the following month also has no public holidays), place your minimum unit trust order at 9:30 a.m. (let's suppose), then see how long it takes for the funds to leave your CPF SA. Sure, you'll lose interest for a month on S$1,000 (for example), but I think the cost is well worth the rehearsal benefit, just to make sure everything is in working order.

 

[JF123456]

It's a little edgy, but you can run a rehearsal by investing the minimum amount in the unit trust and see how long it takes. For example, pick the first Monday of the prior month in a week with no public holidays (assuming your 55th birthday week the following month also has no public holidays), place your minimum unit trust order at 9:30 a.m. (let's suppose), then see how long it takes for the funds to leave your CPF SA. Sure, you'll lose interest for a month on S$1,000 (for example), but I think the cost is well worth the rehearsal benefit, just to make sure everything is in working order.

OK, will do this. Good to do a trial run; goodness know what may 'screw up ' at the last min.

 

[henrylbh]

OK, will do this. Good to do a trial run; goodness know what may 'screw up ' at the last min.

If you have thought of what to buy, make sure there is enough to fill your order on the same day or the next.