CPF SA Shielding hack - RIP (Obsolete)

[item2sell]

As i said earlier, there's nothing to stop MIW from re-writing the rules on withdrawal. The trust has already been broken and it's up to each individual to determine how much you want to believe their ******** going forward. For me, I'll keep my RA to FRS and find other ways of investing all my OA once I empty it when I hit 55.

I stop trusting them with the minimum sim boosheet in 2003

 

[vsvs24]

Wow, a fantastic proposal!!!!

Too bad u dont work for them

Can't you see I am making a dig at them ?

Terrible proposal, as with the closing of SA above 55.

 

[s0crates]

Well one can take SA and invest to prevent it from reaching FRS earlier before 55. But of cuz finding SA investment to beat 4% a bit hard but not zero chance. Now cannot but way before 2020 it is doable.

Just don't buy when interest rates are at all time low and the forced fixed income exposure is a drag to performance lo.

Invested in a balanced fund for less than 2 months. 2% returns Liao. Last year the fund did 9% iirc.

 

[DevilPlate]

As i said earlier, there's nothing to stop MIW from re-writing the rules on withdrawal. The trust has already been broken and it's up to each individual to determine how much you want to believe their ******** going forward. For me, I'll keep my RA to FRS and find other ways of investing all my OA once I empty it when I hit 55.

Bro Jeff, since trust is broken why u still stay vested in SG properties?
Might as well start to sell all investment properties? MIW also can anytime implement further shitty CMs?

Also like what BBC has mentioned before…..since trust is broken i think should also try to hold less SGD denominated assets moving forward.

 

[DevilPlate]

Can't you see I am making a dig at them ?

Terrible proposal, as with the closing of SA above 55.

Bestest is to follow Msia lah.
They allow citizens to withdraw their EPF during covid.

 

[elvintay07]

As i said earlier, there's nothing to stop MIW from re-writing the rules on withdrawal. The trust has already been broken and it's up to each individual to determine how much you want to believe their ******** going forward. For me, I'll keep my RA to FRS and find other ways of investing all my OA once I empty it when I hit 55.

Well said. Actually just treat this like a Ponzi scheme and we will be happier. Don’t later government say 55 cannot withdraw need to withdraw at 58 then we tulan. Also withdraw to me not good la. Money take long time to earn but only 1 day to splurge. Go meet some chio bu then suddenly $500k becomes like $50k

My initial plan is to ringfence my OA so that I can use my OA for RA (shield my SA). Now LPPL, just use OA to pay off property. I presume best way to do since now interest super high. Thanks PAP for blocking the shielding and let me use my OA. Haha

 

[Nofear40]

I have a feeling that there will be policy 'U' turn or slight adjustments to this new policy .....

Why? Because election coming?

 

[sohguanh]

Bestest is to follow Msia lah.
They allow citizens to withdraw their EPF during covid.

They also stick to their original promise to let ppl withdraw all at age 55 if they wish. They keep their promise. This is something monies cannot buy.

 

[sohguanh]

I stop trusting them with the minimum sim boosheet in 2003

If you live long enough in Spore you will know how they work. Ppl way before you and my era already kena. The only constant is change remember this can never beat them but can sneak in take advantage if possible. How ironic when all the monies inside is our own monies.

In case readers follow up and say not happy migrate lar. You can skip your breath and time typing and ignore this post. Thank you for your cooperation.

 

[bearkia]

Before this rule changes, I was careful not to do too much retirement sum top up, be it using cash or OA, with the mind that might want to do SA shielding. Now seems like better to reach FRS earlier, earn higher interest at the meantime before 55, since whatever beyond FRS at 55 will go to OA.

 

[item2sell]

Before this rule changes, I was careful not to do too much retirement sum top up, be it using cash or OA, with the mind that might want to do SA shielding. Now seems like better to reach FRS earlier, earn higher interest at the meantime before 55, since whatever beyond FRS at 55 will go to OA.

what if 5 years later they mandate 50% SA go RA to meet 4xBRS. The other 50% go OA.

would you topup then?

remember. We do not have enough opposition to vote against.

only when the day we have 30% of opposition then the government is reliable and stable

 

[Okenba]

Completely no surprise that something was done about shielding. Just whether or not people wanted to see the writing on the wall.

The funny part is that if there was no shielding (or noone bringing it to public attention via a public article on a national newspaper), we likely would still have our SA which would still give 4%pa to those with a higher than FRS figure in SA and those working beyond 55yo.

 

[jeffong]

Bro Jeff, since trust is broken why u still stay vested in SG properties?
Might as well start to sell all investment properties? MIW also can anytime implement further shitty CMs?

Also like what BBC has mentioned before…..since trust is broken i think should also try to hold less SGD denominated assets moving forward.

Aiyoh like that you are being too extreme liao lah.. Just becoz kanna screwed by MIW, doesn't mean you have to see everything in black and white mah.. I prefer to work within the 50 shades of grey instead .

Given the hand being dealt, just need to work out what to do with my OA warchest instead lor. Perhaps that D15 property in Jln Tembusu? Moreover my properties are not for flipping and meant for long term assets which I can use for passive income and to pass on to next gen. As long as I'm not overleveraged, can always ride out any CM that MIW throws in.

 

[Guojing88]

At my age of 51 this year, if I want to view this change positively, it makes it easier for me to make the decision at 55 to put ERS into my RA.

Prior to the change, putting that amount would incur a higher opportunity cost. I could have left more in my SA and it will give me the same risk free return, with a much higher liquidity.

Now, with the SA being closed at 55, that opportunity cost is now only 2.5, almost halved.

Furthermore, I am now allowed to top up 4 times the BRS into my RA at 55, giving me significantly higher lifetime retirement income at 65.

This has the effect of giving me a higher income floor after 65, allowing me to more confidently draw down even more of my wealth portfolio, in the 10 years between 55 to 65, what we call the "go-go" years of retirement.

 

[royalmix]

Completely no surprise that something was done about shielding. Just whether or not people wanted to see the writing on the wall.

The funny part is that if there was no shielding (or noone bringing it to public attention via a public article on a national newspaper), we likely would still have our SA which would still give 4%pa to those with a higher than FRS figure in SA and those working beyond 55yo.

After she published in ST, her final article to make a "big impact", she did not put anything in writing on DBS website. I guess due to "peer pressure" = so many bloggers and FI's are publishing it, it slowly get into the DBS website!

Early last year, I think CPFB got her to write an article as the article was published on both CPFB and DBS website but with one para removed - she wrote about multiple streams of retirement income, one of which is the 4% pa interest from SA which she shielded at 55!

My guess CPFB took the most drastic solution, which is easiest to implement, close SA. They created the loophole, so should know the "easiest" solution to protect themselves too! This simple solution also closed another big loophole, kill 2 birds with one stone!

Ful details are already published at CPFB website! Are u still hoping for U-turn? Just move on!

 

[jeffong]

At my age of 51 this year, if I want to view this change positively, it makes it easier for me to make the decision at 55 to put ERS into my RA.

Prior to the change, putting that amount would incur a higher opportunity cost. I could have left more in my SA and it will give me the same risk free return, with a much higher liquidity.

Now, with the SA being closed at 55, that opportunity cost is now only 2.5, almost halved.

Furthermore, I am now allowed to top up 4 times the BRS into my RA at 55, giving me significantly higher lifetime retirement income at 65.

This has the effect of giving me a higher income floor after 65, allowing me to more confidently draw down even more of my wealth portfolio, in the 10 years between 55 to 65, what we call the "go-go" years of retirement.

What's to stop MIW from changing the withdrawal rate to 70 or higher or maybe scrap the basic and standard plans and only offer escalating plan. If you do really want to top up your RA to ERS levels, maybe consider to invest those OA funds outside first and only do the top-up just before you hit 65 when you are fully aware of the policy in place at that time.

 

[royalmix]

What's to stop MIW from changing the withdrawal rate to 70 or higher or maybe scrap the basic and standard plans and only offer escalating plan. If you do really want to top up your RA to ERS levels, maybe consider to invest those OA funds outside first and only do the top-up just before you hit 65 when you are fully aware of the policy in place at that time.

Yes, it is about the CPF Life Plans they are driving towards!

 

[chong18]

With the aging population and people living longer, sooner or later Basic plan will be gone so that they can keep more interest in the common pool to keep it solvent. Too risky to go for ERS, better to invest the funds yourself to achieve 4% (while also taking some risk but the CPF policy change risk is worse)

 

[polyglob]

My guess CPFB took the most drastic solution, which is easiest to implement, close SA. They created the loophole, so should know the "easiest" solution to protect themselves too! This simple solution also closed another big loophole, kill 2 birds with one stone!

Other than SA shielding, there is another SA loophole - withdrawing OA without fully withdrawing SA that is being circulated more and more here on MM. Closing SA after 55 closes this other loophole as well

 

[Okenba]

With the aging population and people living longer, sooner or later Basic plan will be gone so that they can keep more interest in the common pool to keep it solvent. Too risky to go for ERS, better to invest the funds yourself to achieve 4% (while also taking some risk but the CPF policy change risk is worse)

Knowing that our population is aging, and that people are living longer and also having better health into their later years. And the purpose of CPF is to help people fund their own retirement in old age.

I don't think I would be surprised if...
- CPF Life payout age is set at 70 for all instead of the option for 65 right now.
- CPF life plan set at Escalating or all options have an escalating portion to manage inflation as folks grow older.
- FRS increases even more over the years. It is already increasing and with this function, it is unlikely that people will be 'forced' to all have ERS. Just increase FRS instead.
- In fact, I would not be surprised if ERS is no longer a hard cap. Just slowly decrease the returns the more people put into RA and let people decide when it is worth it. They could show indicator bands. BRS-FRS how much is the payout. FRS-ERS slightly lower percentage payout. Abv ERS slightly lower again. Even at slightly lower payouts, there will be some who value the consistency of income enough to want to consider taking it up.