CPF SA Shielding hack - RIP (Obsolete)

[lyndonmaxewell]

Qn: if one deploys the shield 1 year in advance (at 54yo), is the potential loss roughly the difference between SA 4%pa and the return on the 1 year investment (assume 1.5%pa) ?

Potentially yes, but the future gain instead of loss is great.

 

[lyndonmaxewell]

Losses may be more.

Are you afraid of change of CPF policy before you hit 55 in the next one year?

Things like policy changes are uncontrollable factors. That is why CPF is only one of my baskets towards retirement income/funds.

 

[lyndonmaxewell]

i am just condemning this 72 rule. it does not answer many questions.

eg how many years it will take for the my principal sum to triple.

or how much will i have when i am 65

or my kid is already 5 years old, if i deposit now, how much will he have when he is 55.

there are too many gaps in this method. it is only meant for people that does not pass maths

on the other side, we have henry. he tries calculates to the last cent of how much he has in his spread sheet.

Even for people who are not good at Maths, you can open your Excel and slowly punch in rows and columns with simple formulas to work it out. It takes time and patience but at least you know what you are doing.

Sometimes I try to use some complicated formulas but I ended up being even more unsure of what I am doing or confidence in the figures obtained.

 

[lyndonmaxewell]

Can't read the article.. asked me to login or subscribe... can you summarize the 4 ways to maximize CPF?

Sent from OnePlus ONEPLUS A5010 using GAGT

1. Maximising CPF Special Account Savings
2. Topping up to Enhanced Retirement Sum
3. Dad's CPF RA as an investment tool
4. Voluntary property refunds to CPF accounts

 

[lyndonmaxewell]

What happens if one does not have frs but execute this sa shielding?
E.g oa=0 sa=100k, frs=176k
Use 60k from sa to buy some stable fund before 55.
ra=40k at 55
Sell fund, 60k goes back to sa or go to ra because frs not met?

Fund will go back to SA after you sell funds, but in this case it is useless because you can never withdraw the monies from SA. To serve as a higher interest bearing account which is also liquid and withdrawable at any time after 55, you need to meet FRS amount in SA first (Or BRS with property pledge).

 

[dork32]

Even for people who are not good at Maths, you can open your Excel and slowly punch in rows and columns with simple formulas to work it out. It takes time and patience but at least you know what you are doing.

Sometimes I try to use some complicated formulas but I ended up being even more unsure of what I am doing or confidence in the figures obtained.

is it really that difficult to use excel? you will probably finish the calculations in less time than putting up a post on a forum.

the thing about using a formula is this. after you use it, use your excel to verify. if it is correct, you do not have to do this verification any more in the future. if it is wrong, it just means that either the formula is crab or you cannot make it.

 

[dork32]

I share the formula here. Though you will need a calculator and get your hands dirtier for a more accurate answer.


https://toc.net/2019/10/14/compounding-interest-and-rule-of-72/

your post is good.

i just want to add a few points

carry a table everywhere is troublesome. i carry my hp. it comes with a simple calculator. my compound interest formula is (1.0x)^n where x is the interest and n is the number of years.

your understanding of the rule of 72 is good. but it did not reflect how the 72 is developed.

if you look at the denominator, ln(1+r). you can do a maclaurin expansion of the term. it becomes r - 0.5r^2 + 0.17r^3.

the maclaurin expansion can be used because r is usually a small number.

r is a decimal number. eg 0.02 for 2%. to convert it to a whole number, you multiply your formula by 100 on the numerator and denominator.

100*ln2 = 69.3. this is not a very convenient number. it cannot be divided by many numbers. a slight bigger number has to be chosen becoz of the -0.5r^2. 72 is the pick because it can be divided by many numbers.

the limitation of maclaurin is that the r must be a small number. so if you are into a ponzi scheme, then the formula breaks down.

this is my personal analysis of the 72 rule. you can tear it down if you have enuf maths to do it

 

[BBCWatcher]

is it really that difficult to use excel?

Excel is a proprietary product that Microsoft sells, at least for more than basic functionality. Whether Excel is particularly difficult or not (somewhere in between I'd say), it's not free. There are free alternatives, so it's best to say "spreadsheet."

It's also extremely useful to sanity check an attempted spreadsheet calculation. No tool is perfect, and no tool user is perfect. Quick, external estimations are quite useful as sanity checks.

She would be able to envision retiring from early that she can spend more time working on her passion in her younger days instead of working for the sake of living life.

Wealthy people have such choices, but why not do both?

It continues to mystify me that so many people seemingly cannot imagine time spent that is both compensated (sometimes very highly compensated) and enjoyable. I understand there are many people, maybe most people, who don't presently experience that particular combination. But surely it isn't that hard to imagine there are many people who enjoy whatever they're doing while they get paid to do it.

Maybe I'm just a preternaturally happy person and lucky?

 

[dork32]

Excel is a proprietary product that Microsoft sells, at least for more than basic functionality. Whether Excel is particularly difficult or not (somewhere in between I'd say), it's not free. There are free alternatives, so it's best to say "spreadsheet."

It's also extremely useful to sanity check an attempted spreadsheet calculation. No tool is perfect, and no tool user is perfect. Quick, external estimations are quite useful as sanity checks.

I used the word spreadsheet in my previous. it is ts that use the Excel. i just played on

Excel is synonymous with spreadsheet. this is how we sg people speak.

eg i tell you i had maggy for breakfast
or i buy pampus for my kids. every sg guy will understand.

and yes, excel is easy for the vast majority of sg people. it is an essential software when working. our unemployment rate is close to 0. most of us would be able to use excel.

yes, excel is not perfect because it works best on a computer. we dont lug our laptop everywhere we go. but excel works all the time, even with the most complicated scenarios and is always accurate.

 

[dork32]

another thing to note is this.

we sg people are fantastic at mathematics. even those that claim that they are weak at it are not really lousy.

you look at henry. he claims that he cannot make it at maths. but look at his spreadsheets, it is wonderful. he still have more than enuf maths to do a great spreadsheet.

americans on the other hand are much weaker at maths.

a good comparison would be our h2 maths (last time called maths c) and their sat maths. both are taken by students prior to uni studies. you ask anyone that take h2 maths, even those that fail it, to take sat maths, all of them would come back with at least 750 points.

even our e maths is much more difficult than the sat maths.

 

[dork32]

we sg people learn maclaurin and taylor series at jc, the one i used to explain the rule of 72.

how many american grads would have heard of these terms.

 

[BBCWatcher]

This thread has now converged on pathetic.

 

[fr33d0m]

I used the word spreadsheet in my previous. it is ts that use the Excel. i just played on

Excel is synonymous with spreadsheet. this is how we sg people speak.

eg i tell you i had maggy for breakfast
or i buy pampus for my kids. every sg guy will understand.

and yes, excel is easy for the vast majority of sg people. it is an essential software when working. our unemployment rate is close to 0. most of us would be able to use excel.

yes, excel is not perfect because it works best on a computer. we dont lug our laptop everywhere we go. but excel works all the time, even with the most complicated scenarios and is always accurate.

This is non-sense unless you deal with numbers, you don't work on excel.

 

[mummy1234]

What is the maximum amt we can shield in our SA?

 

[dork32]

This thread has now converged on pathetic.

this is how the american president talk when he is cornered. not surprised other americans behave the same way.

this is how a third rate forum guy post

 

[dork32]

This is non-sense unless you deal with numbers, you don't work on excel.

this is nonsense. anyone that works in an office will have used excel. yes, there are construction workers and machine operators that do not use excel.

 

[dork32]

What is the maximum amt we can shield in our SA?

all but 40k.

 

[mummy1234]

all but 40k.

So it is good to put in as much into our SA as possible. Once it hits FRS, only CPF contributions can furthur contribute to SA?

 

[fr33d0m]

this is nonsense. anyone that works in an office will have used excel. yes, there are construction workers and machine operators that do not use excel.

not in one day in my work for more than 10 years, I am required to use excel, even once.

 

[mummy1234]

Is it better to SA top up S$7k yearly for income tax rebate or transfer OA to SA to hit FRS when in mid 40s?