CPF SA Shielding hack - RIP (Obsolete)

[zoneguard]

cock up, max you lose half a year's interest if you are with tbills

There's no reason to go with T-bills when the short-term bond UT method definitely works and a bro just verified it earlier a few pages ago in this thread: https://forums.hardwarezone.com.sg/128674148-post271.html

 

[madtari]

Because there's always an uncertainty... By having 4% risk free interest, one will be less willing to take more risk for just a mere 1% additional returns... But for 2.5% OA, ppl may be more willing to take the risk and do investment for double the return... For me I won't touch my SA for investment. I will treat it as a fixed income portion of my entire portfolio.

if you can get 5% why waste time in sa and ra. go for brs. take everything out and go the 5%. it is better than sa 4%

sa is meant for people that are happy with 4%

oa is meant for people that are happy with 2.5%

 

[Froggyman]

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

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)

All THANKS to BBCWatcher Advice

Since the hack to is minimise the $ from SA to form RA but if the price of the unit trust is unknown at the time of purchase, then what is the safe buffer amount for other other charges that will be incurred to Ensure a minimum $40k in the SA after the deduction?
Taking the example of $222k for the purchase, total withdraw from the SA will be about ....??
Just thinking to leave as close at to $40k in SA only.

 

[Panerex]

I was always under the impression upon 55 yo, all the amounts in OA and SA gets combined into RA. Is it not the case?

 

[BBCWatcher]

Since the hack to is minimise the $ from SA to form RA but if the price of the unit trust is unknown at the time of purchase, then what is the safe buffer amount for other other charges that will be incurred to Ensure a minimum $40k in the SA after the deduction?
Taking the example of $222k for the purchase, total withdraw from the SA will be about ....??
Just thinking to leave as close at to $40k in SA only.

When you use a zero fee platform and a unit trust you just place an order for the exact amount that leaves $40,000 behind. There’s no buffer required.

I was always under the impression upon 55 yo, all the amounts in OA and SA gets combined into RA. Is it not the case?

SA gets drawn first, then OA if necessary. RA funding ends when the Full Retirement Sum is reached or both SA and OA are exhausted, whichever comes first.

 

[Panerex]

Thanks BBCW.


May I know if the FRS is the same for everyone at $300K?

So after setting FRS, if there’s remaining monies, they can remain in OA and SA?

 

[BBCWatcher]

May I know if the FRS is the same for everyone at $300K?

The 2020 Full Retirement Sum is $181,000.

So after setting FRS, if there’s remaining monies, they can remain in OA and SA?

Yes.

 

[Froggyman]

When you use a zero fee platform and a unit trust you just place an order for the exact amount that leaves $40,000 behind. There’s no buffer required.
.

OIC. So get from POEM should do the trick. Thanks.
Hopefully no changes to the CPF rules when times come.

 

[ooptimizer]

Hi can I ask the experts here:
When you buy say a unit trust to do shielding, there should be a 14 days free look period, right?
So can I proceed like this - 14 or 13 days before my 55 birthday, I buy some unit trusts. Then on my 55 birthday, I use the free look to cancel the purchase and the funds should go back to my SA account.

Please correct me if anything wrong with this method. Thanks

 

[henrylbh]

Bright spark.

 

[Tiger9119]

Hi can I ask the experts here:
When you buy say a unit trust to do shielding, there should be a 14 days free look period, right?
So can I proceed like this - 14 or 13 days before my 55 birthday, I buy some unit trusts. Then on my 55 birthday, I use the free look to cancel the purchase and the funds should go back to my SA account.

Please correct me if anything wrong with this method. Thanks

If the price of the unit trust had gone up during the 14 days, will you still cancel the purchase?

 

[iceblendedchoc]

Hi can I ask the experts here:
When you buy say a unit trust to do shielding, there should be a 14 days free look period, right?
So can I proceed like this - 14 or 13 days before my 55 birthday, I buy some unit trusts. Then on my 55 birthday, I use the free look to cancel the purchase and the funds should go back to my SA account.

Please correct me if anything wrong with this method. Thanks

unit trust has no free look. I think you mean ILP. ILP will only refund you for the portion of the insurance but not the investment part for the free look. If you earn money, the insurance company will absorb it, if you lose money, you suck it up yourself. That means you are still back to square one.

 

[chopra]

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.

kns why my parents nv give me a bday on 15th!!!!!!

 

[GrandJedi]

What platform to use to minimize charges?

Hi,

What is the most economical platform to use for this hack? Eg. To buy/sell Nikko AM short-term fund seems like no fees to buy and sell. But to hold for 2 months, are there holding fees?

Thanks.

 

[zoneguard]

Hi,

What is the most economical platform to use for this hack? Eg. To buy/sell Nikko AM short-term fund seems like no fees to buy and sell. But to hold for 2 months, are there holding fees?

Thanks.

Avoid FSM as it charges platform fee. POEMS has been tested working a few times in this thread while dollarDex should work too but nobody tested or reported back.

 

[iMac]

Hi,

What is the most economical platform to use for this hack? Eg. To buy/sell Nikko AM short-term fund seems like no fees to buy and sell. But to hold for 2 months, are there holding fees?

Thanks.

Expert please correct me if I am wrong.

Beside some fee $ charged by FSM/Poem/etc...

There are also fee charged by Nikko AM Short-Term Fund (1% initial sales charge, 0.3% annual fee)

So technically, you already loss 1.3% (1% + 0.3%) of your SA at the beginning?

https://secure.fundsupermart.com/fsm/admin/buy/factsheet/factsheet370332.pdf

 

[zoneguard]

No sales charges for CPFIS investments from October 1,2020.
https://www.straitstimes.com/busine...of-cpfis-fee-cuts-deferred-to-oct-1-next-year.

Looks like FSM doesn't charge platform fee for CPFIS. https://secure.fundsupermart.com/fsm/new-to-fsm/pricing-structure. So now viable alternative to POEMS for implementing the hack.

 

[cosmic]

I called FSM today and was told for CPFIS (including SA), there is no charge for Platform Fee. Only for Cash or SRS transactions.

If FSM also don't charge any fees for Buy/Sell of UT, wonder what they earn then for such transactions.

 

[kevinbox]

they earn from trailer fee

 

[chrisloh65]

When you buy through FSM, FSM get a cut on the sales fee (could be directly charging you and or reimbursed by the fund manager you bought the fund (trailer fee)).

I called FSM today and was told for CPFIS (including SA), there is no charge for Platform Fee. Only for Cash or SRS transactions.

If FSM also don't charge any fees for Buy/Sell of UT, wonder what they earn then for such transactions.