CPF SA

[peppermint7]

The extra interest earned on your RA, SA and MA balances will go to the respective accounts, while the extra interest earned on your OA balances will go into your RA to enhance your retirement savings.

U mean after 55, the interest i gotten from OA will auto go into RA? That is only if i haven't meet FRS correct?

 

[Tiger9119]

U mean after 55, the interest i gotten from OA will auto go into RA? That is only if i haven't meet FRS correct?

From CPF:

You selected: 55 years old and above

You will earn an extra interest of 2% per annum on the first $30,000 and 1% per annum on the next $30,000 of the combined balances (capped at $20,000 for OA). The extra interest earned on your RA, SA and MA balances will go to the respective accounts, while the extra interest earned on your OA balances will go into your RA to enhance your retirement savings.

 

[8zaoyu]

On the contrary, if I’m CPF board, I might be worried that many of us manages to have their FRS/ERS.
This would mean that I need to find a way to commit your LIfE payout for a lifetime.

Part 1. Not many of us can reach FRS or ERS unless working decades till beyond 55 on iron rice bowl public service jobs. Now the young are having less than 3 kids. Those who have more than 4 kids, usually convinced the wife to stop working or work as home baker/market bazaar/shop sales? And older kids work as partimers? This thread started to convince folks how to earn that extra interest especially in CPF SA before 55, now has become pro or against CPF? But I kinda of convinced by you younger than 55 ,
that if we have a property pledge, can we have ALL our CPF drawn down from 55 yearly ending at 65/70 years of age. Maybe raising the Medishield Account Maximum only for paying our own medical premiums? Not forgetting that the Full Retirement Sum is increasing for every year's 55 year olds already contribute enough to the CPFB coffers.
Part 2 - Please understand why those who have irregular jobs due to poor educational levels, temper misfits such that they just can't work under anybody, they probably don't want to be on CPF scheme, just be on the cheapest public flat rental scheme and free inpatient and outpatient medical if working.Depends on public taxes for their dependent children welfare only.
Part 3 - Nowadays too many rich singles working on own time own target own retirement. Don't want to be tied down by whatever govt schemes, they know how to buy insurances, investments, properties themselves.

 

[maple96]

Full of rubbish in this thread

Cannot even interprete the "simple english" of CPFB on treatment of extra interest

Only dork32 interpreted it almost correctly

 

[Andrew833]

Part 1. Not many of us can reach FRS or ERS unless working decades till beyond 55 on iron rice bowl public service jobs. Now the young are having less than 3 kids. Those who have more than 4 kids, usually convinced the wife to stop working or work as home baker/market bazaar/shop sales? And older kids work as partimers? This thread started to convince folks how to earn that extra interest especially in CPF SA before 55, now has become pro or against CPF? But I kinda of convinced by you younger than 55 ,
that if we have a property pledge, can we have ALL our CPF drawn down from 55 yearly ending at 65/70 years of age. Maybe raising the Medishield Account Maximum only for paying our own medical premiums? Not forgetting that the Full Retirement Sum is increasing for every year's 55 year olds already contribute enough to the CPFB coffers.
Part 2 - Please understand why those who have irregular jobs due to poor educational levels, temper misfits such that they just can't work under anybody, they probably don't want to be on CPF scheme, just be on the cheapest public flat rental scheme and free inpatient and outpatient medical if working.Depends on public taxes for their dependent children welfare only.
Part 3 - Nowadays too many rich singles working on own time own target own retirement. Don't want to be tied down by whatever govt schemes, they know how to buy insurances, investments, properties themselves.

Any body in middle class with average salary can reach near to FRS without any topup. This thread try to advise ppl in this group to increase the amount in SA as early as possible.
Same as this group, those that can afford to top up, this thread advise ppl to topup into SA to earn compound interest. Or topup using OA to SA.

By the way, I fall in this group, average salary with no top up. At 55, my SA may not be enough for FRS.
So growing your SA early is a advantage to that person, not the ppl in this thread.

 

[Utonian]

Any body in middle class with average salary can reach near to FRS without any topup. This thread try to advise ppl in this group to increase the amount in SA as early as possible.
Same as this group, those that can afford to top up, this thread advise ppl to topup into SA to earn compound interest. Or topup using OA to SA.

By the way, I fall in this group, average salary with no top up. At 55, my SA may not be enough for FRS.
So growing your SA early is a advantage to that person, not the ppl in this thread.

maybe want to define a bit what you consider middle class/average salary and some of the perimeter assumed for the sake of discussion?

i think situation changes from person to person so have to get some defined perimeter.
before consuming any "advise" or looking at other pple's perspective, one has to know where you stand yourself financially and your own beliefs.

 

[Bizaxx]

Guys,
What’s next upon MA hitting BHS? What are my options?

 

[giraffey]

Guys,
What’s next upon MA hitting BHS? What are my options?

Build up your SA?

 

[dork32]

maybe want to define a bit what you consider middle class/average salary and some of the perimeter assumed for the sake of discussion?

i think situation changes from person to person so have to get some defined perimeter.
before consuming any "advise" or looking at other pple's perspective, one has to know where you stand yourself financially and your own beliefs.

i just want to say this. it may be more difficult to hit frs/ers in the future.

The frs value is raised every year. But the contribution rates and max salary remains constant. they have raised the max salary to 6k not too long ago. they need to raise it some more or it may be more difficult to hit it in the future.

 

[dork32]

Guys,
What’s next upon MA hitting BHS? What are my options?

my ma hit bhs when i was in my early 30s. at that time i had housing loan, car loan, expenses high, salary low. there was no option for me then.

 

[dork32]

Full of rubbish in this thread

Cannot even interprete the "simple english" of CPFB on treatment of extra interest

Only dork32 interpreted it almost correctly

i have mentioned, cpf is very complex. it is not easy to understand. that is why there are so many misinterpretation here.

am i very sure of myself? i dont think so. last time i oso ownself check ownself.

 

[dork32]

"To enhance the retirement savings of Singaporeans, the Government pays extra interest on the first $60,000 of your combined balances (capped at $20,000 for Ordinary Account (OA)). The amount of extra interest paid to you would depend on your CPF balances and age.

The sequence for the account balances used to make up the combined balances is as follows:

1st: Retirement Account (RA), including balances used to pay for the annuity premium under CPF LIFE
2nd : OA, with a cap of $20,000
3rd : Special Account (SA)
4th: MediSave Account (MA)"

please read what is extracted from the cpf site.
after 55,
1st RA. in other words, anyone that has brs will have all their bonus interest going into ra.

if you dont have brs, chances are your oa and sa is also close to 0. so all your bonus interest still go to ra.

if you dont have brs and you continue to work. your oa and sa will build up. but the sa contribution is very small after 55. and at 55 if you still cannot hit brs, it just means that your salary cannot make it. this makes the sa contribution even smaller. so much of your bonus interest will go the ra.

and if you dont have brs and have oa, might as well as transfer all the oa to ra. coz you also cannot withdraw.

this is what i meant. our scholars damn power. come up with crazy wordings and confuse everyone. actually, they can just say that all bonus interest go to ra.

 

[henrylbh]

You guys mean after 55, amount exceed 60K in MA goes into RA?

Any MediSave savings above the BHS will be transferred to your Ordinary Account, if you have met FRS or BRS with property charge.

 

[henrylbh]

The extra interest earned on your RA, SA and MA balances will go to the respective accounts, while the extra interest earned on your OA balances will go into your RA to enhance your retirement savings.

If you have joined the CPF LIFE scheme, the extra interest earned will be paid into your RA or the CPF LIFE Annuity Fund.

So second paragraph superseded the first right? Meaning all extra interest earned will be paid in RA or cpf life annuity fund. Meaning as long as other accounts combined 60k then it is still alright.

MA 60k extra interest will still go into RA and paid out from cpf life payout right?

No the second para does not supersede the first.

But the second para is not clear to me for remote cases

When FRS or BRS starts to dwindle below 60k due to payouts, balance in OA, followed by SA and MA, if any, may start to earn extra interest.

Extra interest on OA goes into RA under basic plan is acceptable. But where do the extra under standard or escalating plan go to? If go RA and becomes minuscule AMP, then it's ok.

When MA, the last in line starts to earn the extra interest and MA balance exceeds BHS, the excess will flow to OA if FRS has been met according to the rule

 

[maple96]

rubbish never stop

 

[maple96]

Not actually. The CPF Board is describing the CPF LIFE Basic Plan rather fairly here, I think.

First of all it's important to understand what they're saying. They're saying the Basic Plan payouts will eventually sag a bit(*) if you live long enough due to the way bonus interest crediting works with that specific plan. That's absolutely true, and it's true even if you have $1 million in your OA+SA+MA in any allocation. They're not saying you won't earn maximum bonus interest, even for the rest of your life. (You very well might!) They're only describing the CPF LIFE Basic Plan's payout behaviors, exactly as they wrote.

The way this works according to current bonus interest crediting rules is that, once your Retirement Account falls below $40,000 (at the very latest), the bonus interest credited to your Retirement Account starts to fall below the maximum attainable $900/year. If you keep at least $20,000 in your Ordinary Account then you won't lose all bonus interest crediting into your RA, but you'll lose much of it from the $40,000 mark. Specifically, you'll eventually lose $500 out of the maximum possible $900 bonus interest per year.

The loss of the bonus interest at some point is why the Basic Plan has a quirky "burble," where the monthly payout goes falls a bit and stays down after a certain age. This is unavoidable with the Basic Plan because some bonus interest loss in the RA in unavoidable, assuming you live at least long enough to see it.

If your MA+SA+OA+RA is maintained at $60,000 or more, then you'll still earn maximum possible bonus interest. It's just that the bonus interest will start to "stick" in your SA and potentially also MA as well, depending on your balances. It's only OA's contribution to bonus interest that credits to RA, plus RA itself of course.

The CPF Board explains these various bonus interest crediting rules here.

(*) The payout amount won't sag quite as much if you maintain $20,000 in your OA, but it'll still sag a bit.

Who can spot all the seriously incorrect/wrong CPF Facts/Rules above?

This guy (BBCWatcher) always tell u using his fear/greed stories that u must choose Escalating Plan.

Now he writes to mislead all of u, implying that u can still earn extra interest even if u choose Escalating Plan.

He is still living in denial (hope) that he will not lose all his extra interest for life under Escalating Plan.

 

[rrr2015]

if whole of RA will be swept into CPF life under standard & escalating, i think they do the same for extra interest as well …

Extra interest on OA goes into RA under basic plan is acceptable. But where do the extra under standard or escalating plan go to? If go RA and becomes minuscule AMP, then it's ok.

 

[maple96]

From CPFB website:

How much extra interest can I earn on my CPF balances?

To enhance the retirement savings of Singaporeans, the Government pays extra interest on the first $60,000 of your combined balances (capped at $20,000 for Ordinary Account (OA)). The amount of extra interest paid to you would depend on your CPF balances and age.

The sequence for the account balances used to make up the combined balances is as follows:

1. 1st: Retirement Account (RA), including balances used to pay for the annuity premium under CPF LIFE
2. 2nd : OA, with a cap of $20,000
3. 3rd : Special Account (SA)
4. 4th: MediSave Account (MA)

You selected: 55 years old and above

You will earn an extra interest of 2% per annum on the first $30,000 and 1% per annum on the next $30,000 of the combined balances (capped at $20,000 for OA). The extra interest earned on your RA, SA and MA balances will go to the respective accounts, while the extra interest earned on your OA balances will go into your RA to enhance your retirement savings.
If you have joined the CPF LIFE scheme, the extra interest earned will be paid into your RA or the CPF LIFE Annuity Fund. Please refer to the CPF LIFE scheme for more information on CPF LIFE.

(end of quote from CPFB website)

My Comments:

Someone (BBCWatcher) quote the above CPFB rules, just to support his opinion/stories on why CPF Life Basic Plan payout might decrease towards to the end (mostly around 90) due to extra interest.

It is not the precise CPFB rules to quote when you talk about extra interest for CPF Life Basic Plan. It is ok to quote but he seriously misinterpreted the rules just to condemn CPF Life Basic Plan payout scheme.

U should use facts/figures to support your own opinion/conclusion, not your own imagination.

CPFB made unwritten assumptions when stating that rule, ie. that most members will have close to zero balances in OA/SA/MA around/above 90, for example.

If u are good at maths, u will be able to figure that assumption made.

 

[maple96]

From CPFB website:

How much extra interest can I earn on my CPF balances?

To enhance the retirement savings of Singaporeans, the Government pays extra interest on the first $60,000 of your combined balances (capped at $20,000 for Ordinary Account (OA)). The amount of extra interest paid to you would depend on your CPF balances and age.

The sequence for the account balances used to make up the combined balances is as follows:

1. 1st: Retirement Account (RA), including balances used to pay for the annuity premium under CPF LIFE
2. 2nd : OA, with a cap of $20,000
3. 3rd : Special Account (SA)
4. 4th: MediSave Account (MA)

You selected: 55 years old and above

You will earn an extra interest of 2% per annum on the first $30,000 and 1% per annum on the next $30,000 of the combined balances (capped at $20,000 for OA). The extra interest earned on your RA, SA and MA balances will go to the respective accounts, while the extra interest earned on your OA balances will go into your RA to enhance your retirement savings.

If you have joined the CPF LIFE scheme, the extra interest earned will be paid into your RA or the CPF LIFE Annuity Fund. Please refer to the CPF LIFE scheme for more information on CPF LIFE.

How should u read/interpet the above rules to determine where your extra interest (max 900) will be credited?

1. You must be mindful of other CPFB rules on extra interest defined in other parts of the CPFB website. Those rules are more precise on where the extra interest will be credited.

2. Your must be mindful of your life stage under CPFB rules.

3. Your must be mindful whether you are under RSS or CPF Life

 

[maple96]

From CPFB website:

How much extra interest can I earn on my CPF balances?

To enhance the retirement savings of Singaporeans, the Government pays extra interest on the first $60,000 of your combined balances (capped at $20,000 for Ordinary Account (OA)). The amount of extra interest paid to you would depend on your CPF balances and age.

The sequence for the account balances used to make up the combined balances is as follows:

1. 1st: Retirement Account (RA), including balances used to pay for the annuity premium under CPF LIFE
2. 2nd : OA, with a cap of $20,000
3. 3rd : Special Account (SA)
4. 4th: MediSave Account (MA)

You selected: 55 years old and above

You will earn an extra interest of 2% per annum on the first $30,000 and 1% per annum on the next $30,000 of the combined balances (capped at $20,000 for OA). The extra interest earned on your RA, SA and MA balances will go to the respective accounts, while the extra interest earned on your OA balances will go into your RA to enhance your retirement savings.

If you have joined the CPF LIFE scheme, the extra interest earned will be paid into your RA or the CPF LIFE Annuity Fund. Please refer to the CPF LIFE scheme for more information on CPF LIFE.

If u already joined CPF Life or going to join CPF Life between 65 to 70, where will your extra interest be credited after joining?

1. Under CPF Life Basic Plan, all extra interest will be credited to RA, forever!
2. Under CPF Life Standard Plan and Escalating Plan, all extra interest will go into the Pool, forever.

(focus on the applicable rule at this Life Stage in BOLD RED above)