CPF SA Shielding hack - RIP (Obsolete)

[BBCWatcher]

Ya la….CPFB merely js closed the loophole/hack which in fact only benefit a minority of high income earners.

I'm still waiting for my invitations to forum members' lavish, champagne-fueled 55th birthday parties as they withdraw as much as they possibly can from CPF. But nobody has invited me yet. Now with this new ruleset maybe I'll get an invitation!

Just kidding, of course. No invitations, please. I'm way too busy and don't like champagne much anyway.

 

[RedsYWNA]

That's right.

And the Enhanced Retirement Sum will increase from $308,700 (2024) to $426,000 (2025) — a ~38% increase. For those of you (like my household) who'd like even higher Retirement Account balances you'll have that option from early 2025.

From age 55 onward just find another place to park withdrawable OA dollars if you're dissatisfied with 2.5% interest. You can save or invest in anything you wish: bonds, stocks, real estate, university educations, endowment plans, cryptocurrencies, fixed deposits, more CPF RA, CPF MA, precious metals, collectible works of art...whatever you like that's legal.

By killing off SA, and not providing a LRIS scheme (which the govt had previously accepted as an
elegant solution), I wonder if govt is doing the right thing for citizens> 55.

Scammers and financial advisors will be happy.

 

[royalmix]

I'm still waiting for my invitations to forum members' lavish, champagne-fueled 55th birthday parties as they withdraw as much as they possibly can from CPF. But nobody has invited me yet. Now with this new ruleset maybe I'll get an invitation!

Just kidding, of course. No invitations, please. I'm way too busy and don't like champagne much anyway.

You quietly throw your own party at home, after shielding SA last year!

 

[henrylbh]

https://www.cpf.gov.sg/member/faq/r...awals/how-is-the-withdrawable-amount-computed

A is CPF balance at 65, so in your case should be 630.5K

His CPF balance at 65 no doubt is 630.k. But that includes top ups and or transfers to RA from FRS to ERS and interest which should be excluded.

 

[henrylbh]

If SG Govt goes to war, it needs funding, and it can easily tap into CPF by issuing war bonds and converting all CPF into temporary source of funding using the war bonds. (CPF force buy war bonds)

What talking you?

 

[twosix]

.

What talking you?

He watched too many war movies. Haha.

 

[fr33d0m]

His CPF balance at 65 no doubt is 630.k. But that includes top ups and or transfers to RA from FRS to ERS and interest which should be excluded.

Read the example again. A is balance, not excluding anything. B is topups

 

[stanlawj]

What talking you?

Don't worry, it's less than 1% probability of happening.

 

[henrylbh]

Read the example again. A is balance, not excluding anything.

A balance includes B the amount topped up as well C which is gov grants. That's why B and C need to be deducted from A to determine the amount that can be withdrawn less $5k. So in highsulphur post #1480, 20% additional withdrawal from RA should be based on FRS, similar to the example you cited.

 

[henrylbh]

Don't worry, it's less than 1% probability of happening.

Nothing to worry except that you are talking about out of this world matters in this thread.

 

[kickass22]

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.

This can certainly happen but if they backdated it to impact people who are going to get the sum soon, that will be political suicide?

 

[fr33d0m]

A balance includes B the amount topped up as well C which is gov grants. That's why B and C need to be deducted from A to determine the amount that can be withdrawn less $5k. So in highsulphur post #1480, 20% additional withdrawal from RA should be based on FRS, similar to the example you cited.

It is whole balance of CPF, not FRS. There is no further exclusion. Exclusion is B and C, no mention of interest.

 

[royalmix]

"Only less than 1 per cent of the roughly 1.4 million CPF members – or 14,000 CPF members – who are 55 and above today will not be able to transfer all the savings in their SA to their RA when their SA is closed in 2025."

A rough estimate of how much the Govt is losing in interest, assuming these 14k shielded SA and have at least 200k in SA: 42million per year, bleeding from GIC revenue!

 

[henrylbh]

"Only less than 1 per cent of the roughly 1.4 million CPF members – or 14,000 CPF members – who are 55 and above today will not be able to transfer all the savings in their SA to their RA when their SA is closed in 2025."

A rough estimate of how much the Govt is losing in interest, assuming these 14k shielded SA and have at least 200k in SA: 42million per year, bleeding from GIC revenue!

That loss excludes those above 55 with RA balances as there are many (98%?) who never shield their SA. Also henceforth, MC and VC cease to flow into SA.

The gov also saved millions by disallowing interest to be withdrawn before principal sum in SA and OA. My plan to withdraw at least $1,800 interest monthly to supplement my retirement payout but the plan was dashed from 2022.

 

[henrylbh]

It is whole balance of CPF, not FRS. There is no further exclusion. Exclusion is B and C, no mention of interest.

What that's got to do with whole balance of CPF, when we are talking about additional withdrawal from RA?

Anyway the example given is not clear or helpful in understanding the additional withdrawal from age 65.

 

[DevilPlate]

That loss excludes those above 55 with RA balances as there are many (98%?) who never shield their SA. Also henceforth, MC and VC cease to flow into SA.

The gov also saved millions by disallowing interest to be withdrawn before principal sum in SA and OA. My plan to withdraw at least $1,800 interest monthly to supplement my retirement payout but the plan was dashed from 2022.

Yr situation is not uncommon, i guess most retirees are afraid to drawdown from their funds/portfolio during retirement. They js want to spend on interest earned and keeping the capital intact. (Including myself)

*future expenses 10-20 years later is so unpredictable (yes 3% on paper hahaha)

 

[henrylbh]

Yr situation is not uncommon, i guess most retirees are afraid to drawdown from their funds/portfolio during retirement. They js want to spend on interest earned and keeping the capital intact. (Including myself)

*future expenses 10-20 years later is so unpredictable (yes 3% on paper hahaha)

My situation is NOT common as I plan to finish all my CPF by around 95 years old. Drawing on interest first would mean amortising my balances over a longer period with a higher payout. I never intend to leave assets to anyone except the flat that I hang on to. The flat would likely to be gone if I survive longer than 95

 

[royalmix]

My plan to withdraw at least $1,800 interest monthly to supplement my retirement payout but the plan was dashed from 2022.

From 2025, you can just withdraw OA interest every year!

 

[henrylbh]

From 2025, you can just withdraw OA interest every year!

appreciate that you show the link. If true, I have to revise my worksheet which I just revised to move SA to OA.

 

[henrylbh]

Yr situation is not uncommon, i guess most retirees are afraid to drawdown from their funds/portfolio during retirement. They js want to spend on interest earned and keeping the capital intact. (Including myself)

*future expenses 10-20 years later is so unpredictable (yes 3% on paper hahaha)

Future expenses most disturbing and unpredictable are medical expenses/insurance. Now paying medical insurance premium is already a hefty annual expense with or without sickness till as long as you live with or without income.