CPF SA Shielding hack - RIP (Obsolete)

[KeytoFreedom]

do you want to establish what your objective is first?

hmm, good question...I'm not sure what my objective is yet, whether to maximise retirement income or liquidity....

can I clarify one more thing....does the CPF nomination include the amount in the RA? ie can we bequest the RA amount along with the OA and SA?

Can we bequest the CPF life amount that is subsequently formed after age 65, I suppose so?


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[reddevil0728]

hmm, good question...I'm not sure what my objective is yet, whether to maximise retirement income or liquidity....

can I clarify one more thing....does the CPF nomination include the amount in the RA? ie can we bequest the RA amount along with the OA and SA?

Can we bequest the CPF life amount that is subsequently formed after age 65, I suppose so?


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https://www.cpf.gov.sg/member/faq/r...remium-balance-will-my-beneficiaries-receive-

 

[KeytoFreedom]

https://www.cpf.gov.sg/member/faq/r...remium-balance-will-my-beneficiaries-receive-

Thanks! That means the RA amount is not "lost in the ocean"...I guess I now need to decide whether I want liquidity vs return....




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[KeytoFreedom]

another question- if I decide to top up the RA with cash to the ERS level, by when must I do so?


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[reddevil0728]

another question- if I decide to top up the RA with cash to the ERS level, by when must I do so?


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What do you mean by when? What timeline are you trying to meet?

 

[BBCWatcher]

Thanks! That means the RA amount is not "lost in the ocean"...I guess I now need to decide whether I want liquidity vs return....

Your lump sum withdrawal options are severely limited unless and until your CPF Retirement Account is funded at least to the Full Retirement Sum (or Basic Retirement Sum with property pledge/charge). So if you'd like both less liquidity and lower interest then you can get that job done by "shielding" your Ordinary Account dollars.

 

[KeytoFreedom]

What do you mean by when? What timeline are you trying to meet?

CPF life plan starts to kick off at age 65, but basically need to lock the RA account from age 55 yo 65? Say if the RA starts of with the FRS amount at 55, must I top up to ERS amount soon after that or can do so anytime before 65....does it mean that if I top up earlier to ERS, the monthly payout will be more than if I top up later?


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[reddevil0728]

CPF life plan starts to kick off at age 65, but basically need to lock the RA account from age 55 yo 65? Say if the RA starts of with the FRS amount at 55, must I top up to ERS amount soon after that or can do so anytime before 65....does it mean that if I top up earlier to ERS, the monthly payout will be more than if I top up later?


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Can top up anytime after RA created.

earlier top up of course more payout

 

[BBCWatcher]

CPF life plan starts to kick off at age 65, but basically need to lock the RA account from age 55 yo 65?

You don’t strictly need to. Life is full of choices, including some pretty terrible ones. What are you trying to accomplish?

Say if the RA starts of with the FRS amount at 55, must I top up to ERS amount soon after that or can do so anytime before 65....

Under current rules if you wish to top up your CPF Retirement Account (or transfer dollars into it) you can do so any time before you die. That could be at age 106 if for example you’re alive at age 106.

does it mean that if I top up earlier to ERS, the monthly payout will be more than if I top up later?

Yes, of course. You earn interest on CPF account balances, including your Retirement Account. Less (or no) interest earned means less to pay out.

The maximum obtainable payout stream from a CPF Retirement Account involves boosting your RA to the ERS within your 55th birthday month, boosting it to the new ERS within each and every month the ERS is raised, doing so for the rest of your life, making no lump sum withdrawals from your RA, and waiting until age 70 (the default) to start payouts.

 

[KeytoFreedom]

if I fully shield OA and SA , the RA will have only 60k....
am thinking of topping up the RA using cash, but am afraid that the system will try to deduct funds from OA/SA when I transfer the shielded funds back...CPF will not try to do another deduction from OA/SA without my approval right?


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[BBCWatcher]

if I fully shield OA and SA , the RA will have only 60k....
am thinking of topping up the RA using cash, but am afraid that the system will try to deduct funds from OA/SA when I transfer the shielded funds back...CPF will not try to do another deduction from OA/SA without my approval right?

If you fund your RA at least to the Full Retirement Sum (or Basic Retirement Sum with property pledge/charge) then the CPF Board will make no further attempts to fund your RA. (Unless you're under the FRS and sell the home with the pledge/charge. Proceeds from that home sale have to go back into your RA to get you back up to the FRS if financially possible.)

If you don't fund your RA to the Full Retirement Sum (or Basic Retirement Sum with property pledge/charge) then shortly before your CPF LIFE payouts start (shortly before age 70 by default) the CPF Board will make another attempt to fund your RA. Or if you want to withdraw funds from your SA/OA the CPF Board may need to make another attempt before allowing your withdrawal.

I don't really see the point in leaving OA dollars in OA and underfunding your RA. You don't really have any liquidity until your RA is funded, and your OA dollars earn only 2.5% instead of the 4.08% (1Q2024 rate) they could be earning in RA. Some people reserve some OA dollars because they're paying a mortgage and don't have enough CPF and other savings/income to cover all bases, so that might be a reason to hold some OA dollars back. But you don't need to "shield" OA dollars (and lose some OA interest) to do that if you're in that situation. You just tell the CPF Board (before age 55) that's what you want to do, and they'll limit their "sweep."

 

[highsulphur]

Game over. No more SA after 55 years.

 

[starlight318]

This is really bad news.. sad
Does this means all CPF members SA will be closed or only the new cohorts turning 55 next year onwards??

 

[Ghostrider]

Game over. No more SA after 55 years.

CPF changes: Closing Special Accounts
Today, CPF members aged 55 and above have a Special Account (SA) and a Retirement Account (RA).

From next year, the government will close the SA for those aged 55 and above.

These savings will be transferred to the RA up to the Full Retirement Sum, where they will continue to earn the long-term interest rate.

The remaining SA savings will be transferred to the Ordinary Account (OA), but members can voluntarily transfer their OA savings to the RA anytime, up to the Enhanced Retirement Sum to earn higher interest and receive higher retirement payouts.

meaning cannot do SA shielding?

 

[luvalist]

Can close this liao. Loophole close

 

[highsulphur]

CPF changes: Closing Special Accounts
Today, CPF members aged 55 and above have a Special Account (SA) and a Retirement Account (RA).

From next year, the government will close the SA for those aged 55 and above.

These savings will be transferred to the RA up to the Full Retirement Sum, where they will continue to earn the long-term interest rate.

The remaining SA savings will be transferred to the Ordinary Account (OA), but members can voluntarily transfer their OA savings to the RA anytime, up to the Enhanced Retirement Sum to earn higher interest and receive higher retirement payouts.

meaning cannot do SA shielding?

Seems like so. No more 4% deposit account

 

[item2sell]

No need shield liao.
Then those working also no need contribute to SA.

 

[highsulphur]

So all amount in RA has to go into CPF life? And it's capped at ERS? Anything contribution above will flow back to OA?

 

[flikmy]

So all amount in RA has to go into CPF life? And it's capped at ERS? Anything contribution above will flow back to OA?

Seems like it. My understanding so far.

ERS changed from 3x BRS to 4x.
SA account now limited as any excess above FRS/ERS at 55 years old will be transferred to OA.
4% in SA after 55 years old gone now...

 

[Froggyman]

So new policy will affect all those age 55 and above in 2025 ?? or only those that will reached age 55 at 2025