CPF SA

[BBCWatcher]

After 55, is the SA minimum 40K amount still applies?

Yes.

 

[BernardWYF]

After 55, is the SA minimum 40K amount still applies?

If no, it would be great to shield the total amount each time I need to withdraw money from CPF for retirement spending. Probably do it once a year, shield and unshield quickly.

There was articles mentioning that shielding will not be allowed anymore. Careful.

 

[reddevil0728]

There was articles mentioning that shielding will not be allowed anymore. Careful.

https://www.straitstimes.com/business/invest/no-more-shielding-of-cpf-soon
this?

 

[bruiser69]

Folks, any difference between transferring your funds from SA into your RA, versus leaving your funds in your SA? Afterall they both payout 4% annually rite?

Meaning you can leave your funds in SA earning 4% and only then at 65yrs transfer your SA into RA when you want to start your Cpf Life?

 

[zoneguard]

Meaning you can leave your funds in SA earning 4% and only then at 65yrs transfer your SA into RA when you want to start your Cpf Life?

SA monies are more liquid than RA's - once FRS has been met.

You can create your own payout from SA by doing withdrawals at periodic intervals at any age after 55 - rather than wait for CPF LIFE to start. With the caveat, SA is always withdrawn before OA.

 

[bruiser69]

SA monies are more liquid than RA's - once FRS has been met.

You can create your own payout from SA by doing withdrawals at periodic intervals at any age after 55 - rather than wait for CPF LIFE to start. With the caveat, SA is always withdrawn before OA.

Aha... that's why the shielding can still come in handy, albeit the 40k sum in SA. Withdraw your OA funds b4 SA.

 

[Okenba]

Folks, any difference between transferring your funds from SA into your RA, versus leaving your funds in your SA? Afterall they both payout 4% annually rite?

Meaning you can leave your funds in SA earning 4% and only then at 65yrs transfer your SA into RA when you want to start your Cpf Life?

If you leave in SA, at 65, you can only top up to ERS, plus interest from what was in RA at 55.

If you top up to ERS every year, your interest would grow your RA beyond ERS.

Basically, as I understand it, your RA is separated into capital and interest. And capital can be raised every year to the ERS limit. If you wait to 65 to raise your capital, you lose out on the interest earned for that increase in capital from 55 to 65.
(You still get the interest in your SA, but you cannot put it into your RA.)

 

[bruiser69]

If you leave in SA, at 65, you can only top up to ERS, plus interest from what was in RA at 55.

If you top up to ERS every year, your interest would grow your RA beyond ERS.

Basically, as I understand it, your RA is separated into capital and interest. And capital can be raised every year to the ERS limit. If you wait to 65 to raise your capital, you lose out on the interest earned for that increase in capital from 55 to 65.
(You still get the interest in your SA, but you cannot put it into your RA.)

Thanks, I didn't see it from this perspective earlier.

 

[zoneguard]

If you leave in SA, at 65, you can only top up to ERS, plus interest from what was in RA at 55.

If you top up to ERS every year, your interest would grow your RA beyond ERS.

Basically, as I understand it, your RA is separated into capital and interest. And capital can be raised every year to the ERS limit. If you wait to 65 to raise your capital, you lose out on the interest earned for that increase in capital from 55 to 65.
(You still get the interest in your SA, but you cannot put it into your RA.)

Money is fungible , does it matter if the 4% is earned from SA or RA? And does it matter if the source of payout is from SA or CPF LIFE? Only if the life expectancy of the member is higher for LIFE payout until SA monies are depleted, it will then matter but you can always adjust the withdrawal duration for SA.

And from the example, when RA savings exclude the interest earned, (b) is smaller, shouldn't it mean (c) is actually larger?

 

[Okenba]

Payout is lesser

 

[karakorum1999]

Interesting discussions.
Depends on the individual’s desire - whether he/she wants to use CPF Life to maximise the life payouts (as longevity insurance), and to what extent.
A fat CPF SA after 55 is also a very good 4% account which can be withdrawn as monthly/yearly payouts (but not for life but a fixed period you can choose).
So one question is after your SA is fully drawn out (assuming you outlast that), what is the CPF life payout you would like? So very personal issue depending on other sources of funds (property, cash, investments, dependants etc.)
And of course, if you are instead able to use your cash/OA to top up your RA, and would do so, then no need to choose - you can have both fat RA and SA accounts…

 

[karakorum1999]

Payout is lesser

Agree.
In exchange for higher liquidity over the 55-65 period.

 

[zoneguard]

In exchange for higher liquidity over the 55-65 period.

If we understand time value of money, a $1000 payout at 55 is always more valuable than $1000 payout at 65. A bird in the hand is worth two in the bush.

 

[Okenba]

Payout is for life

 

[iMac]

Payout is for life

Yes...I rather take earlier than later.

But my rich boss said take later is better, got more money...best is take at 90 or 100 or dont take at all...just leave everything to his children.

He don't understand why CPFB never gave any option for ppl who dont want to take out CPFLife.

 

[bruiser69]

Yes...I rather take earlier than later.

But my rich boss said take later is better, got more money...best is take at 90 or 100 or dont take at all...just leave everything to his children.

He don't understand why CPFB never gave any option for ppl who dont want to take out CPFLife.

Maybe they feel pain pain having to keep on paying you the compounded amount @4% annually after you reach 70yrs.

While it is ok to leave a behest, I still say, don't mollycoddle your children. Else they will end up entitled and useless. Just look at the amount of bbfas in edmw.

 

[dork32]

Yes...I rather take earlier than later.

But my rich boss said take later is better, got more money...best is take at 90 or 100 or dont take at all...just leave everything to his children.

He don't understand why CPFB never gave any option for ppl who dont want to take out CPFLife.

actually, still can.

by the time you take your payout, you would be quite old. even if you still have income, the contribution will be less than 37k. he can take the payout and vc back to his own account. then his total amount in the cpf is still constant.

 

[BBCWatcher]

Generally you can also take a lump sum distribution from your RA with a property pledge/charge as long as you do it before CPF LIFE payouts start. And that lump sum withdrawal counts against the ERS top up limit. In other words, RAs are also fairly liquid between ages 55 and (as late as) just before 70.

 

[vsvs24]

https://www.straitstimes.com/business/invest/no-more-shielding-of-cpf-soon
this?

The article mention that CPF Board post warning on its website. Anyone have the link ? Thanks

 

[walsly]

Hi gurus, been studying this cpf SA-RA and CPF life for a while.. still quite noob at it - need some guidance:

Based on my own modest estimation and with the help of some web calculators floating around the internet, i should be able to hit ERS purely from my SA alone around 45 (i am in my early 30s now) and without any major cash top ups.

What i understood is that CPF life which starts at 65 (assuming it stays the same) will take the prevailing FRS/ERS amount from our RA as the "premium" right? And whatever amount left in my RA will stay in there, in which i could either opt to withdraw in full and etc. - is my understanding correct?

Let's say - at 55, the total monetary value of my OA+SA+MA less the ERS sum is around 800-900k, would it be possible for me to withdraw the monies in full?