CPF SA Shielding hack - RIP (Obsolete)

[BBCWatcher]

I guess you could look at U.S. Ivy League universities' endowments and their annualized 20 year performance figures. From what I can tell they're around 10% to 11% per year in nominal U.S. dollars over that same 2003-2023 period. It depends on the university you pick, but it's typically in that range. So they generated better performance figures after removing U.S. dollar inflation. But is that a fair comparison? The core thinking is similar, that these institutions (like governments) assume there's no existential or operating end date. That they can afford to take reasonable risks in furtherance of long-term gains, and that they're trying to support a reasonable contribution to ongoing operations and capital investments. But in other ways they're different.

 

[elvintay07]

I think GIC also have to follow a certain mandate…..overall portfolio must be diversified globally….(not just equities…..must be diversified across many different asset classes)

Some may say why not js 100% into msci world index funds? Can easily beat their mediocre returns liao? Whahahaha

To me, min need to on par with Wall Street la

 

[DevilPlate]

To me, min need to on par with Wall Street la

Temasek returns
https://www.temasek.com.sg/en/our-f...r Singapore dollar one-year,-year TSR was 12%.

https://ask.gov.sg/mof/questions/clgotv5xv005xi908hzxc5m2z

 

[Nofear40]

now all the YouTubers are encouraging investing using OA…
property agents say buy property… FA says buy US stock
is risky if you have a shorter time horizon and still have elderly and schooling kids to take care…

 

[royalmix]

Not an exploitation. Due to gov itself policy ofmaking it tough for people to maximise their lifelong savings. If gov implemented OA closure after 55 and only SA maintain after 55, people wont need do this shielding. Afterall SA is for retirement but why close after 55 when we not even retired yet..gov shud close OA and all go to SA.

There are many ways to solve the problem/loophole they created. But, to me, they will never admit it is their mistake, it is a loophole they created.

So the best way to solve the problem is to tell Singapore: it is a loophole they are patching without telling you it is a loophole being patched, close SA!

 

[micheritan]

There are many ways to solve the problem/loophole they created. But, to me, they will never admit it is their mistake, it is a loophole they created.

So the best way to solve the problem is to tell Singapore: it is a loophole they are patching without telling you it is a loophole being patched, close SA!

A caring gov will not exploit the people especially when we have contibuted our life slogging out and near retiring, or retired and suddenly this big spanner thrown in. I standby SA for retirement, RA is for retirement. OA is not. What should be closed is OA when people hit 55. Gov is exploiting the sandwiched group who also happened to be a majority contibutor to the economy. Those not near this age, dont gloat cos it is OUR loss. Mebbe next time gov chg policy. SA close at 40 year old since SA not even serving purpose as a Retirement account anymore like they now close at 55 and all transfered to to make up RA early at 40 to lock in your money forever in RA. What you going say if at 40 u only have RA and OA?

 

[royalmix]

A caring gov will not exploit the people especially when we have contibuted our life slogging out and near retiring, or retired and suddenly this big spanner thrown in. I standby SA for retirement, RA is for retirement. OA is not. What should be closed is OA when people hit 55. Gov is exploiting the sandwiched group who also happened to be a majority contibutor to the economy. Those not near this age, dont gloat cos it is OUR loss. Mebbe next time gov chg policy. SA close at 40 year old since SA not even serving purpose as a Retirement account anymore like they now close at 55 and all transfered to to make up RA early at 40 to lock in your money forever in RA. What you going say if at 40 u only have RA and OA?

I am sharing my view, so are u!

Whatever you think might happen in future, I disagree!

U can always write in to complain!

 

[vsvs24]

Spot on! They should show gratitude cos the Govt did not claw back all the extra interest they received after shielding SA. Govt admitted their mistake, not your exploitation of a loophole, punished themselves for losing so much money from GIC Income by changing the rule publicly now to stop the continued bleeding from GIC! A discriminating old policy to benefit the rich, not the population of CPF members!

Like most people, you don't understand the implication of closing SA on population of CPF members above 55.

Brainwashed into thinking that the loss is for the 2% who shielded SA.

Just like my friend. Say she did not shield and not affected. Say only the rich affected no difference to her. But when I explained to her the implication then she realized it also affects her.

She turn 55 about 4 years ago. Not enough SA and OA to form RA with FRS and she was still servicing loan for her HDB. So she pledge her property and RA funded to BRS with all her SA and balance from OA.

Now she has fully paid up her loan. As she continued to work for 4 years after 55, her SA balance slowly built up to about $12000 now. But in future this $12000 in SA and subsequent CPF contribution will not earn 4% but 2.5%.

I also gave her the bad news that she is age 60 next year, there would be a cut on Employer CPF. Total CPF contribution cut from 32.5% to 23.5%.

https://www.cpf.gov.sg/employer/faq...ges-to-cpf-contribution-rates-from-1-jan-2025.

The other bad news I broke to her was on CPF allocation :

https://www.cpf.gov.sg/content/dam/...nts/CPFAllocationRatesfrom_1_January_2024.pdf

At her age now, 0.2741 of her employment CPF goes to SA earning 4%. Above age 60, 0.3636 of her employment was supposed to go to SA. So the interest she lose from closing SA is even more.

Her health has been deteriorating so she needs to set aside funds for outpatient medical expenses and in case she needs to stop work or get retrenched. So she does not wish to topup RA.

She is Just a ordinary person. Not rich. Did not shield SA. Don't even have enough in RA to form FRS. Every bit of extra interest from SA helps. But she was also affected by the closing of SA. The cut in employer CPF beyond 55 used to be mitigated by SA interest.

So stop saying only the rich benefits from SA after 55. Every CPF member who continues to work beyond 55 benefits.

The increase in ERS is an even bigger benefit to the rich. Lower and middle income need to worry about liquidity so dare not topup too much RA and have to accept OA at 2.5%. The rich can topup to the max ERS and earn 4%. The rich are also talking about top up SA for their babies so that their SA has a huge balance by 55.

 

[royalmix]

Like most people, you don't understand the implication of closing SA on population of CPF members above 55.

Brainwashed into thinking that the loss is for the 2% who shielded SA.

You are making sweeping assumptions just to defend or protect your personal interest!

Go write in to CPFB to complain, instead of doing personal attacks here!

 

[vsvs24]

You are making sweeping assumptions just to defend or protect your personal interest!

Go write in to CPFB to complain, instead of doing personal attacks here!

I am correcting your assumption that only the rich benefits from SA after 55.

 

[sglandscape]

I am correcting your assumption that only the rich benefits from SA after 55.

My view is the middle class which are more risk averse benefit the most from SA.

 

[royalmix]

I am correcting your assumption that only the rich benefits from SA after 55.

You are doing personal attacks and making sweeping assumptions! You can always sharing your opinion without attacking me! How many times have you been attacking me!


"A discriminating old policy to benefit the rich, not the population of CPF members!"

You dun even understand what this statement meant which you decided to quote and bold in red only now!

 

[vsvs24]

My view is the middle class which are more risk averse benefit the most from SA.

Middle class can be quite wide.

There is the sandwich generation. Many of those currently above age 55 are sandwich generation. The age where they still have a few children not like now. This is also the age where they have to support their parents who are pioneer generation with hardly any CPF or funds for retirement.

Whenever I bring my 91 yo father to hospital, I see mostly those in 50s and 60s caregivers for the 70s to 90s.

 

[vsvs24]

You are doing personal attacks and making sweeping assumptions! You can always sharing your opinion without attacking me! How many times have you been attacking me!


"A discriminating old policy to benefit the rich, not the population of CPF members!"

You dun even understand what this statement meant which you decided to quote and bold in red only now!

You said the policy benefit the rich. Not the population of CPF members. No ?

You admit the not rich also benefit if SA not closed ?

 

[vsvs24]

I will wait for admin to take action.

You reporting me ?

What did I say wrong ? I gave facts to show those not rich also benefit from SA after 55, not just the rich.

 

[royalmix]

"A discriminating old policy to benefit the rich, not the population of CPF members!"

A policy with loopholes which only those who know can benefit and especially those with funds in SA and cash can exploit to hide their SA to prevent it (SA) from being transferred to RA.

Is this is not discriminatory, what is!

 

[vsvs24]

A policy with loopholes which only those who know can benefit and especially those with funds in SA and cash can exploit to hide their SA to prevent it (SA) from being transferred to RA.

Is this is not discriminatory, what is!

Based on the example I gave, did my friend exploit this loophole ? Did she not get affected ?

 

[twosix]

Why argue? Its a fact g is cutting their outlays and singaporeans r losing out, whether poor or rich. No need to defend or curse. We all live on this tiny island. We should be united as one so the g will not anyhow change the rulea against us.

 

[micheritan]

A caring gov will not exploit the people especially when we have contibuted our life slogging out and near retiring, or retired and suddenly this big spanner thrown in. I standby SA for retirement, RA is for retirement. OA is not. What should be closed is OA when people hit 55. Gov is exploiting the sandwiched group who also happened to be a majority contibutor to the economy. Those not near this age, dont gloat cos it is OUR loss. Mebbe next time gov chg policy. SA close at 40 year old since SA not even serving purpose as a Retirement account anymore like they now close at 55 and all transfered to to make up RA early at 40 to lock in your money forever in RA. What you going say if at 40 u only have RA and OA?

 

[BBCWatcher]

I don't see how there's any loss for CPF members who are 55+, working, and haven't yet met the Full Retirement Sum (or Basic Retirement Sum with property pledge/charge). The portion of compulsory contributions that currently flows into SA will instead flow into RA from early 2025. SA and RA interest rates are equal, and you only get additional liquidity once your RA is "adequately" funded.

There are other CPF-related enhancements announced in Budget 2024 that are unambiguous improvements even for those who've met the FRS (or BRS with property pledge/charge). These include the Earn and Save Bonus and the MediSave Bonus. Also the increase in the income cap from $4,000 to $8,000 when topping up a spouse's or sibling's SA, MA, or RA to qualify for tax relief is helpful. For example, a CPF member age 55+ who's met the FRS will have liquid OA dollars. Some of these dollars can be withdrawn (no SA to "block" OA withdrawals) then immediately redeposited as cash in a spouse's or sibling's SA, MA, or RA. If the spouse or sibling receives $8,000 or less of total global income (2025 cap) then the donor will qualify for tax relief of up to $8,000 in cash top ups. (There's an additional condition that the RA has to be below the FRS if the top up is directed there.)