CPF SA Shielding hack - RIP (Obsolete)

[s0crates]

Doesn’t removing SA give the members more options to take care of themselves instead of letting government take it?

everyone should rejoice.

Only if they realise what's wrong. Most people don't realise how the recent change from government is bad for them.

Not that they are directly affected, but how the government can take away options just like that.

We may live to see a day where SA/RA interest rates are lower than the annual FRS limit increase. Or CPF SA rates to be lower than 4%. Would cpf members be investment savvy enough to fend for themselves?

I doubt so

 

[kickass22]

. Regardless, imo, CPF is not doing enough to empower people totake things into their own hands, especially the investing side of things.

I find this statement funny, When you "empower" them and they have low returns they blame the govt, and when you don't "empower", they blame the govt also..... no win liao!

 

[fr33d0m]

Only if they realise what's wrong. Most people don't realise how the recent change from government is bad for them.

Not that they are directly affected, but how the government can take away options just like that.

We may live to see a day where SA/RA interest rates are lower than the annual FRS limit increase. Or CPF SA rates to be lower than 4%. Would cpf members be investment savvy enough to fend for themselves?

I doubt so

Why give cheap cheap to government? Don’t let them earn lah… withdraw everything and leave nothing in CPF

 

[RedsYWNA]

I find this statement funny, When you "empower" them and they have low returns they blame the govt, and when you don't "empower", they blame the govt also..... no win liao!

Errr. Govt "empower" citizens but at the same time, limits their choices to high cost funds only leh....

Just take a look at the terrible choices available, if not for Endowus who came in aggressively with Amundi....

 

[QinWei]

MP Foo says

‘Fairer’ to retain CPF Special Account for those already aged 55 and above: Foo Mee Har​

https://www.businesstimes.com.sg/si...utm_source=telegram&utm_medium=social-organic

 

[BBCWatcher]

MP Foo says

‘Fairer’ to retain CPF Special Account for those already aged 55 and above: Foo Mee Har​

https://www.businesstimes.com.sg/si...utm_source=telegram&utm_medium=social-organic

I think he makes a valid point.

The same logic applies to members approaching age 55 who developed their retirement financial plans based on an expectation that their SA balances above the Full Retirement Sum would stay in SA. And that a portion of compulsory contributions from age 55 onward would continue to flow into SA.

How about "grandfathering" age 55+ CPF members by allowing them to keep a certain maximum amount in their SAs (a 98th percentile sort of maximum)? Any amount above that would be transferred to their RAs (if below the Full Retirement Sum) then to their OAs. To avoid penalizing members who boosted their RAs above the Full Retirement Sum allow them to keep more SA dollars, probably on a 1 for 1 basis. And give these members a window of time to do exactly that (inject more cash into their RAs) if they want to retain more SA dollars.

For members below age 55 (or not turning 55 in 2024) it's tricky, but I think some SA transition plan for members age 45+ (born before 1980) makes sense. If you have at least 10 years of notice (i.e. you're born before 1980) that SAs won't be available from age 55 onward (2025 onward) then that should be enough time to make reasonable compensating adjustments to your retirement financial plan. But if you're within that 10 year window maybe you need a little help.

 

[dgeralds]

MP Foo says

‘Fairer’ to retain CPF Special Account for those already aged 55 and above: Foo Mee Har​

https://www.businesstimes.com.sg/si...utm_source=telegram&utm_medium=social-organic

Seems like some tweaking may come..

 

[royalmix]

Seems like some tweaking may come..

It is normal debate before things are finalised tomorrow.

Must give constructive feedback, like offer alternative solutions to address issue at hand, why your alternative solution is better at addressing the bottomline (ie. remove the loophole and stop GIC from bleeding). I dun see any!

 

[royalmix]

"Mr Leong of PSP asked the Government how much interest is now being paid in the Special Account and "how much will it save in interest payments" from the move."

This guy is smart! I already did an estimate (only the shielded), posted earlier!

Other MPs ask for OA interest formula to be revised! I hoping for this to come too!

 

[henrylbh]

I think he makes a valid point.

He or She made a valid point to you but not to me. Whatever the reason, forget about SA at 55. The right thing is that it should have been closed long ago leaving RA as the true account for retirement savings whatever the age of the member. The closure of SA at 55 threw my retirement plan out by more 190k over my retirement years.

 

[royalmix]

He or She made a valid point

MP Foo is a SHE!

 

[henrylbh]

MP Foo is a SHE!

So who is BBCWatcher referring to when he said He

 

[BBCWatcher]

MP Foo is a SHE!

So who is BBCWatcher referring to when he said He

MP Yip Hon Weng, but obviously I should've been clearer. I agree with his point: “Years of financial planning based on the SA’s higher interest rate are disrupted, leaving them with limited time to adjust.”

I agree with MP Foo Mee Har's point, too, at least in terms of the underlying problem. I think she's suggesting "grandfathering" older CPF members (age 55+). That'd work, but there may be other reasonable solutions, too.

 

[royalmix]

MP Yip Hon Weng, but obviously I should've been clearer. I agree with his point: “Years of financial planning based on the SA’s higher interest rate are disrupted, leaving them with limited time to adjust.”

I agree with MP Foo Mee Har's point, too, at least in terms of the underlying problem. I think she's suggesting "grandfathering" older CPF members (age 55+). That'd work, but there may be other reasonable solutions, too.

Never rely solely on CPF for your retirement planning , never over rely or focus your retirement planning on loopholes you can exploit!

Even if I rely on the loophole, it is an extra stream of retirement income, if gone, should not materially affect my whole retirement plan!

So learn to be savvy!

 

[BBCWatcher]

Never rely solely on CPF for your retirement planning , never over rely or focus your retirement planning on loopholes you can exploit!

"SA shielding" is a loophole, and nobody should've relied on that technique as part of a retirement plan.

But having surplus SA dollars (after setting aside the Full Retirement Sum), and having more SA dollars from compulsory contributions from age 55 onward, are not loopholes. Many CPF members expected these SA dollars, and they were/are reasonable to expect them. And if they're age 55+, or (for example) within 10 years of age 55, it can be hard for them to adjust to this particular CPF rule change. If they had known there'd be zero SA dollars from age 55 onward in many cases they would've done something different.

We don't know the exact percentage of CPF members who are materially affected by this change, but it's probably most members who are able to meet the FRS (so about 45% for that), who did not "shield" SA, and who continue working after their 55th birthdays. That's a lot of members, probably roughly 40% of members age 55+.

 

[royalmix]

"SA shielding" is a loophole, and nobody should've relied on that technique as part of a retirement plan.

But having surplus SA dollars (after setting aside the Full Retirement Sum), and having more SA dollars from compulsory contributions from age 55 onward, are not loopholes. Many CPF members expected these SA dollars, and they were/are reasonable to expect them. And if they're age 55+, or (for example) within 10 years of age 55, it can be hard for them to adjust to this particular CPF rule change. If they had known there'd be zero SA dollars from age 55 onward in many cases they would've done something different.

We don't know the exact percentage of CPF members who are materially affected by this change, but it's probably most members who are able to meet the FRS (so about 45% for that), who did not "shield" SA, and who continue working after their 55th birthdays. That's a lot of members, probably roughly 40% of members age 55+.

Too bad, their MPs dunno how to fight for them, no constructive feedback so far to address the problem at FM's heart!

If they dunno the other loophole, their SA will also be gone soon! So relying on another loophole to keep their SA intact is also over reliance in their Retirement Planning, Failed!

 

[Okenba]

MP Foo says

‘Fairer’ to retain CPF Special Account for those already aged 55 and above: Foo Mee Har​

https://www.businesstimes.com.sg/si...utm_source=telegram&utm_medium=social-organic

Anyone want to guess if she is younger or older than 55? =D

 

[royalmix]

Anyone want to guess if she is younger or older than 55? =D

Born in 1966!

 

[micheritan]

SA closure is a LOSS to every working indivuduals age 55 and above .. dont gloat that the gov did right to close and has no impact to you if you are not there yet. Ultimately you will if u continue contubuting to the economy. Closing the SA is a big loss to we working whether u shield or not shield, young or 55 above. You are laughing at own foolishness to think otherwise. Hope gov will relook and revise for those who is depending on SA as part of retirement plan. SA n RA/ cpf life should be seen as part of retirement strategy , supplementing together to our retirement nest so we retire at ease with less burden and dependent on gov . Removing SA is a bad move , crippling many retirement plans not just those who sa shield but those who are still contibuting to SA after 55.

 

[PhantomOpera]

Born in 1966!

Self entitled MP we have