CPF SA Shielding hack - RIP (Obsolete)

[a4973]

You said "Lack of liquidity only ever matters if you need it and you've run out of it. It doesn't matter otherwise".

He may have liquidity now but who can predict what happens in future especially between age 55 to 65 ?

The point is topping up RA cannot be reversed. You chase for the higher yield of 4% but lose the ability to control withdrawing the excess whenever you want.

Isn't it such that if one has > FRS in RA, one can pledge/charge ppty and thereafter withdraw 1 * BRS?

 

[BBCWatcher]

You said "Lack of liquidity only ever matters if you need it and you've run out of it. It doesn't matter otherwise".
He may have liquidity now but who can predict what happens in future especially between age 55 to 65 ?

Oh, you can often predict that much. At some point you know you have plenty of liquidity. If you can't make such a non-bold prediction then (seriously) you should never buy a house. (Also never marry and never have children.)

But per Dork32's suggestion the RA top up decision can be deferred given the current interest rate environment.

The point is topping up RA cannot be reversed. You chase for the higher yield of 4% but lose the ability to control withdrawing the excess whenever you want.

Yes, and "So what?" (a) You also must have at least a trickle of retirement income. ERS level CPF LIFE is still a small trickle. If there's any place where ERS level CPF LIFE is "too much" retirement income Singapore is definitely not that place. (b) This decision doesn't have to be made tomorrow and probably shouldn't be (given current interest rates). (c) A person with a billion dollars (as one example) of liquid assets just shouldn't worry about a $99,400 RA top up's effects on her liquidity. At some point liquidity concerns become irrational and absurd. (d) See above about buying a house, marrying, and having children. All of those life events are hugely more liquidity impactful than a $99,400 RA top up by someone with gobs of liquidity.

 

[BBCWatcher]

Isn't it such that if one has > FRS in RA, one can pledge/charge ppty and thereafter withdraw 1 * BRS?

You still can. Those lump sum withdrawal options don't change. What changes is that you'll still end up with a >FRS level CPF LIFE retirement income stream even if you max out your lump sum RA withdrawal options. That makes exercising those lump sum RA withdrawal options (in a dire emergency, presumably) more palatable and survivable. (BRS level CPF LIFE is really not fun.)

Sure, OK, evaluate your liquidity position and make sure you maintain adequate liquidity. But a S$99,400 RA top up (2023's figure to raise a RA from the FRS to the ERS) just ain't that big a deal for many people. For perspective that's much less than any new car (something that's nominally but not terrifically liquid), and you don't have to pay for fuel, insurance, parking, or maintenance. Plenty of people seem to buy cars that cost twice that just to buy, and they don't seem to agonize over liquidity when they do it.

"Don't be silly," basically. If you've got enough liquidity to buy 3 yachts then it's OK to drop your liquidity down to 2.99 yachts. Metaphorically or actually.

 

[a4973]

Is this allowed after 55 ? Where did you see this ?

I'm not sure where to find it on the CPF website but it is something that I remembered and planned for my last ditch liquidity needs. I am currently at 2022 ERS and may or may not continue chasing ERS but if come a time when I have exhausted my cash savings, SA and OA etc I at least have 1*BRS that I can withdraw from RA for truly emergency use though I hope never to need it.

 

[BBCWatcher]

Is this allowed after 55 ? Where did you see this ?

Topping up a RA does NOT reduce or increase any lump sum RA withdrawal options you already have. Check with the CPF Board (of course) if this detail concerns you.

 

[philips110104]

Turn 55 this Dec, should I apply for the 1 year Tbill on coming end Jan?

 

[BBCWatcher]

Turn 55 this Dec, should I apply for the 1 year Tbill on coming end Jan?

It might be worth nibbling, but I wouldn't bid too aggressively (too low). My hunch is the 12 month T-bill won't be attractive enough for these purposes, but you could get lucky.

Bear in mind also that you won't be able to shield any dollars arriving in your Special Account for the rest of the year using that specific T-bill. So you'll still probably want to have a second go at shielding much nearer your birthday, probably via the bond unit trust-based method.

 

[zoneguard]

I'm not sure where to find it on the CPF website but it is something that I remembered and planned for my last ditch liquidity needs. I am currently at 2022 ERS and may or may not continue chasing ERS but if come a time when I have exhausted my cash savings, SA and OA etc I at least have 1*BRS that I can withdraw from RA for truly emergency use though I hope never to need it.

There was some discussion but I can't find the original threads anymore.

 

[zoneguard]

3. Members turning age 65 from 2023 onwards can withdraw up to 20% of their RA savings as at age 65, in a lump sum.

https://www.cpf.gov.sg/member/faq/r...awals/how-is-the-withdrawable-amount-computed
The additional withdrawable savings from 65 is computed based on 20% of your Retirement Account savings excluding any cash top-ups, CPF transfers and government grants, less the unconditional $5,000 which you can withdraw from 55. This ensures that you do not deplete your retirement savings further, so that you will have a stream of monthly payouts for your living expenses in old age.

 

[henrylbh]

https://www.cpf.gov.sg/member/faq/r...awals/how-is-the-withdrawable-amount-computed
The additional withdrawable savings from 65 is computed based on 20% of your Retirement Account savings excluding any cash top-ups, CPF transfers and government grants, less the unconditional $5,000 which you can withdraw from 55. This ensures that you do not deplete your retirement savings further, so that you will have a stream of monthly payouts for your living expenses in old age.

Yes excluding CPF transfers. What's that? Doesn't sound good

 

[micheritan]

Now that the 6mth tbill is opened... any good numbers for comp bid ? Should i go for multiple comp bids?

 

[reddevil0728]

Now that the 6mth tbill is opened... any good numbers for comp bid ? Should i go for multiple comp bids?

depends on how you want to factor opportunity cost

 

[di_andrei]

Quick question, assuming I am reaching 55 this year, and my SA balance is 110k (of which 50k is RSTU contributions) and my OA has 200k. Can I shield the 60k in my SA, and form my FRS from my RSTU + ~150k OA funds?

After the shield drops, can I then withdraw all remaining SA (~60k) and OA (~50k) balances?

 

[a4973]

Quick question, assuming I am reaching 55 this year, and my SA balance is 110k (of which 50k is RSTU contributions) and my OA has 200k. Can I shield the 60k in my SA, and form my FRS from my RSTU + ~150k OA funds?

After the shield drops, can I then withdraw all remaining SA (~60k) and OA (~50k) balances?

Huh? Why shield if want to fully withdraw SA and OA?

 

[di_andrei]

Huh? Why shield if want to fully withdraw SA and OA?

Let's assume I want or need to fully withdraw in the future? I guess the key question I have is whether RSTU contributions can be used to make up the FRS and everything else can be withdrawn.

 

[dork32]

Turn 55 this Dec, should I apply for the 1 year Tbill on coming end Jan?

you already say end jan. end jan means likely that you lose extra 2 months of interest

 

[BBCWatcher]

Let's assume I want or need to fully withdraw in the future? I guess the key question I have is whether RSTU contributions can be used to make up the FRS and everything else can be withdrawn.

Yes, but since there's ordinarily a cost to "SA shielding" you would only do so if you plan to leave dollars in CPF for at least a "reasonable" period of time.

If you're anxious to make a substantial (but not too substantial) lump sum withdrawal then you should consider withdrawing some or all remaining OA dollars while your SA shield is still in place.

 

[KeytoFreedom]

Now that the 6mth tbill is opened... any good numbers for comp bid ? Should i go for multiple comp bids?

why you would bid competitive instead of non competitive?


Read HWZ Forum Rules!

 

[reddevil0728]

why you would bid competitive instead of non competitive?


Read HWZ Forum Rules!

Check out first 2 posts of Tbill thread

 

[micheritan]

I believe we should continue to shield the SA after 55 if we have substantial savings in SA and OA by reinvesting the SA if we want to leave the SA intact so we can eithdraw from OA else we would need to reduce our SA savings,right?