CPF SA Shielding hack - RIP (Obsolete)

[Value.Matrix]

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?

Current ruling (because my mum has less than FRS). Any withdrawal from OA and SA, if below FRS, will be 50% to RA and 50% to cash. (but please confirm with CPF whether it is BRS or FRS because it can be murky depending on how you do it, with property pledge or not)

If you can RSTU RA later to FRS, that SA can be 100% withdrawn as cash instead.

 

[lyndonmaxewell]

Since we still have SA after 55 years old, even if we don't shield, don't we still earn 4%?

I believe as a savvy mum, you too are forward thinking for your family financial planning. While CPF should not be your only basket of retirement (other retirement income sources), it should not deter you from planning and building this basket up. Political, economic or policies changes could affect any of your baskets in reality and I would not be overly concerned on things that have not happened.

 

[lyndonmaxewell]

Wow thanks! Does it mean we can use cash to "refund" the cpf amount used to purchase property? Can we do so even if we have not sold the property?

Sent from OnePlus ONEPLUS A5010 using GAGT

Yes we can. Which also means that instead of us paying back accrued interest, the money which we voluntary refund for buying our housing now earns back normal interests for us.

 

[lyndonmaxewell]

I thought those money from top up to SA cannot invest? If cannot invest means cannot shield right?

Transfers OA to SA and interests can. Dont let it deter on overthinking how much can shield

 

[lyndonmaxewell]

I can transfer OA to SA to hit FRS now but I then won't be able to do SA top up anymore. And problem is I don't have CPF contributions as self employed to get more into SA. Can only contribute to SRS for tax relief and buy annuities?

RSTU cash top up to SA is an open option for you.

 

[henrylbh]

I thought those money from top up to SA cannot invest? If cannot invest means cannot shield right?

Transfers OA to SA and interests can. Dont let it deter on overthinking how much can shield

Appears you are not clearing his doubt.

Any money in SA less 40k can be invested, regardless of where the money comes from.

 

[henrylbh]

I can transfer OA to SA to hit FRS now but I then won't be able to do SA top up anymore. And problem is I don't have CPF contributions as self employed to get more into SA. Can only contribute to SRS for tax relief and buy annuities?

RSTU cash top up to SA is an open option for you.

Also not clearing her doubt. She said she can transfer OA to SA to hit FRS means cannot RSTU after that until …..

 

[highsulphur]

Can someone enlighten me again?

Which voluntary contribution doesn't allow you to withdraw post 55?
Was it the one to SA?

 

[dgeralds]

Wondering if this hack will still be around in march 2021?!?

 

[ocs_woodlands]

Wondering if this hack will still be around in march 2021?!?

If you are so close to the finishing line already, just lunge forward and let your nose cross the tape....

aka

Do the shield NOW. Lose 1.5 years of 4% (thats only 6%) better than lose 30 years (based on life expectancy of 85)of additional 1.5%....


In any case, your loss may well be much lesser than 6% dependent on where it is parked.

 

[dgeralds]

Does the CPF Board usually give advance notice say like "SA cannot be used for investment with effect from xx xxx xxxx"

If advance notice is given, then it be handly to quickly invest SA money at that time...

If you are so close to the finishing line already, just lunge forward and let your nose cross the tape....

aka

Do the shield NOW. Lose 1.5 years of 4% (thats only 6%) better than lose 30 years (based on life expectancy of 85)of additional 1.5%....


In any case, your loss may well be much lesser than 6% dependent on where it is parked.

Wondering if this hack will still be around in march 2021?!?

 

[maple96]

Does the CPF Board usually give advance notice say like "SA cannot be used for investment with effect from xx xxx xxxx"

If advance notice is given, then it be handly to quickly invest SA money at that time...

They should announce any policy changes or amendment or clarification.

I would not be kiasu to take the risk of investing years or mths before 55, u never know what Mr Market will do

Unless u get an investment with guaranteed returns, like I had with almost guaranteed 4% returns.

Just wait for your 55 to hit and see what has been changed. There are other ways to make money or save money

 

[dgeralds]

Yes your comments are sensible. I just wait and keep a close watch on CPF policy changes.

Thank you.

They should announce any policy changes or amendment or clarification.

I would not be kiasu to take the risk of investing years or mths before 55, u never know what Mr Market will do

Unless u get an investment with guaranteed returns, like I had with almost guaranteed 4% returns.

Just wait for your 55 to hit and see what has been changed. There are other ways to make money or save money

 

[highsulphur]

If you are so close to the finishing line already, just lunge forward and let your nose cross the tape....

aka

Do the shieldNOW. Lose 1.5 years of 4% (thats only 6%) better than lose 30 years (based on life expectancy of 85)of additional 1.5%....


In any case, your loss may well be much lesser than 6% dependent on where it is parked.

I agree that you can consider doing it earlier. Maybe early next year

 

[henrylbh]

I agree that you can consider doing it earlier. Maybe early next year

Do earlier and then policy suddenly changed not to your favour

 

[highsulphur]

Do earlier and then policy suddenly changed not to your favour

Somehow I don't see that happening

Anyway you can always reverse if it does

 

[henrylbh]

Somehow I don't see that happening

Anyway you can always reverse if it does

Forced to reverse it (if still got chance and time) and suffer a (big) loss due change that's going to take effect (soon)

 

[maple96]

Forced to reverse it (if still got chance and time) and suffer a (big) loss due change that's going to take effect (soon)

the worst case is no change in policy at 55, lose big and cannot reverse the loss

 

[henrylbh]

Then can only suck thumb

 

[highsulphur]

the worst case is no change in policy at 55, lose big and cannot reverse the loss

You can calculate your max loss right?
Say you put in 1 year in advance
1 year x (4%- 1.7%)?
1.7 is the 1 year sgs.
How big can you lose unless you are shielding a huge sum in SA?