CPF SA

[hmyoth]

OK, but your other option is a Retirement Account top up, right? If you still have room below the Enhanced Retirement Sum. That’s 4% interest feeding into monthly retirement income, quite attractive. If you’ve got enough liquidity already — and you probably don’t need much — then wouldn’t RA be a lot nicer than the mere sub 3% interest (close to 2.5%) an “all three” contribution gives you?

Not comfortable to put $ where I got no control over. Imagine if I top up to ERS , that is another 95k or so.Even I have the $ , imagine this amt go in... I have to wait til 65 before I can feel it, and it is a monthly payout.

 

[BBCWatcher]

Not comfortable to put $ where I got no control over.

You still have lots of control, just different control. You still decide when to start payouts (age 65, 70, or any time in between), still pick your payout plan, still name your nominees, still decide what to do with the money that comes out (could be recycled and put back in, subject to limits). And you have more money, which is what 4% versus 2.X% gets you.

Unless you’re keeping your money under a pillow (and not even then, really), you’re always yielding some control to a bank, insurance company, government, etc. And Singapore dollars themselves, even kept under a pillow, are controlled by the Monetary Authority of Singapore, the same government. The MAS could inflate them any time it wishes, and you have no control over that.

What you should be figuring out, with a sober point of view, is how much liquidity you really need, then make your wealth work as hard as it can for you consistent with your risk tolerance. And there’s certainly a lot to like about 4% interest versus 2.X%.

Imagine if I top up to ERS , that is another 95k or so.Even I have the $ , imagine this amt go in... I have to wait til 65 before I can feel it, and it is a monthly payout.

You cannot put $95,000 into an “all three account” Voluntary Contribution, not in one go. The very biggest VC you can do each year is $37,740, but in your case it’s less since you’re still working. You can put any amount you wish into your Retirement Account up to the current ERS. If you want to put $1 into your RA, you can do that. Claiming that $95K is scary is a red herring. OK, if you think $95K is scary, put $20K in. Or some other figure. That doesn’t mean zero is the best answer.

You can also withdraw from your RA with a property pledge/charge. If RA is so scary, did you do that? (What so magical about the FRS default? Answer: nothing. It’s a fairly arbitrary funding level the government chose for you, not necessarily the best choice for you.)

Is $95K scary? Well, I don’t think so, or at least it’s a lot less scary than home prices in Singapore. It’s really weird to me how so many people think buying S$1 million plus homes is nothing to worry about but putting a tiny fraction of that into CPF causes great angst. It’s bizarre, so much so I think we need more psychiatrists in Singapore.

 

[McFadden]

is there a limit to transfer from oa to sa?

 

[reddevil0728]

is there a limit to transfer from oa to sa?

Lower of FRS and your balance in ur OA

 

[Okenba]

Is $95K scary? Well, I don’t think so, or at least it’s a lot less scary than home prices in Singapore. It’s really weird to me how so many people think buying S$1 million plus homes is nothing to worry about but putting a tiny fraction of that into CPF causes great angst. It’s bizarre, so much so I think we need more psychiatrists in Singapore.

That's rather extreme. Implying that anyone disagreeing with you on this issue requires psychiatrist help.

 

[zoneguard]

You still have lots of control, just different control. You still decide when to start payouts (age 65, 70, or any time in between), still pick your payout plan, still name your nominees, still decide what to do with the money that comes out (could be recycled and put back in, subject to limits). And you have more money, which is what 4% versus 2.X% gets you.

And CPF Life (with increased payout) is a guard against longevity risk and Singaporeans' life expectancy have been rising. OP is also working and already has mandatory contributions to the 3 accounts.

What is unclear to me though is if the RA top-ups above 55 to ERS are automatically swept to become additional CPF LIFE premiums or the default is AMP or the member has a choice to exercise in this matter.

 

[BBCWatcher]

That's rather extreme. Implying that anyone disagreeing with you on this issue requires psychiatrist help.

Good grief. Did you miss the emoticon? It’s a joke!

However, in all seriousness, $95K isn’t even the relevant number, but it is genuinely weird when much smaller sums are feared more than much larger mortgages and home prices. If you’re worried about a “big” number, shouldn’t you be even more worried about bigger numbers? One would think so.

And CPF Life (with increased payout) is a guard against longevity risk and Singaporeans' life expectancy have been rising. OP is also working and already has mandatory contributions to the 3 accounts.

What is unclear to me though is if the RA top-ups above 55 to ERS are automatically swept to become additional CPF LIFE premiums or the default is AMP or the member has a choice to exercise in this matter.

If the member is required to take CPF LIFE payouts (born in 1958 or later, with a couple exceptions), then pre-CPF LIFE payout start the RA top ups feed into CPF LIFE payouts. Post-CPF LIFE payout start the RA top ups feed into either CPF LIFE payouts or AMPs (member’s choice).

 

[Okenba]

Good grief. Did you miss the emoticon? It’s a joke!

Sorry. I didn't realise it was okay to imply someone is mentally unstable so long as you put a wink next to it.

 

[fr33d0m]

Good grief. Did you miss the emoticon? It’s a joke!

However, in all seriousness, $95K isn’t even the relevant number, but it is genuinely weird when much smaller sums are feared more than much larger mortgages and home prices. If you’re worried about a “big” number, shouldn’t you be even more worried about bigger numbers? One would think so.


If the member is required to take CPF LIFE payouts (born in 1958 or later, with a couple exceptions), then pre-CPF LIFE payout start the RA top ups feed into CPF LIFE payouts. Post-CPF LIFE payout start the RA top ups feed into either CPF LIFE payouts or AMPs (member’s choice).

You will be surprised that house purchase decision is made instantly, but a selection of household stuff in fairprice takes more time.

 

[peacefulday]

You still have lots of control, just different control. You still decide when to start payouts (age 65, 70, or any time in between), still pick your payout plan, still name your nominees, still decide what to do with the money that comes out (could be recycled and put back in, subject to limits). And you have more money, which is what 4% versus 2.X% gets you.

Unless you’re keeping your money under a pillow (and not even then, really), you’re always yielding some control to a bank, insurance company, government, etc. And Singapore dollars themselves, even kept under a pillow, are controlled by the Monetary Authority of Singapore, the same government. The MAS could inflate them any time it wishes, and you have no control over that.

What you should be figuring out, with a sober point of view, is how much liquidity you really need, then make your wealth work as hard as it can for you consistent with your risk tolerance. And there’s certainly a lot to like about 4% interest versus 2.X%.


You cannot put $95,000 into an “all three account” Voluntary Contribution, not in one go. The very biggest VC you can do each year is $37,740, but in your case it’s less since you’re still working. You can put any amount you wish into your Retirement Account up to the current ERS. If you want to put $1 into your RA, you can do that. Claiming that $95K is scary is a red herring. OK, if you think $95K is scary, put $20K in. Or some other figure. That doesn’t mean zero is the best answer.

You can also withdraw from your RA with a property pledge/charge. If RA is so scary, did you do that? (What so magical about the FRS default? Answer: nothing. It’s a fairly arbitrary funding level the government chose for you, not necessarily the best choice for you.)

Is $95K scary? Well, I don’t think so, or at least it’s a lot less scary than home prices in Singapore. It’s really weird to me how so many people think buying S$1 million plus homes is nothing to worry about but putting a tiny fraction of that into CPF causes great angst. It’s bizarre, so much so I think we need more psychiatrists in Singapore.

Once my RA formed, and I intend to leave the OA/SA balance continue compounding interest itself via act as a Term insurance coverage and I can full control of the remain sum instead of locked them into RA ERS. Any views?

 

[doratch]

This is interesting. I wonder if SA component of VC also behave this way?

Yes, it does!

As my MA is max, VC goes to OA (81.09%) and SA (18.91%).

 

[BBCWatcher]

Sorry. I didn't realise it was okay to imply someone is mentally unstable so long as you put a wink next to it.

Someone? Who? And what’s wrong with psychiatry?

You will be surprised that house purchase decision is made instantly, but a selection of household stuff in fairprice takes more time.

That’s commonly true, yes. I’ve seen large businesses do this, too: require 6 meetings and a Vice President’s approval for a $50 purchase, but a $1 billion plus purchase might be decided over lunch and practically on a whim.

 

[BBCWatcher]

Once my RA formed, and I intend to leave the OA/SA balance continue compounding interest itself via act as a Term insurance coverage and I can full control of the remain sum instead of locked them into RA ERS. Any views?

Yes, my view is you should figure out how much liquidity you need but not over solution that part. I have no objection to maintaining adequate liquidity if you can, but if maintaining excess liquidity has a cost — in this case, it certainly does — then don’t.

 

[BBCWatcher]

By the way, on what planet is even an ERS-level CPF LIFE retirement income stream “too much” income? It’s not Planet Singapore as far as I can tell. Since I would never want to live on that low level of income if I could avoid it, why would I worry about “locking in” that level of income? I wouldn’t; I don’t. Nor should you, my fellow not poor person (I hope). Just figure out how much liquidity you genuinely need, then don’t worry otherwise about liquidity when a clearly superior offer is available.

 

[zoneguard]

Once my RA formed, and I intend to leave the OA/SA balance continue compounding interest itself via act as a Term insurance coverage and I can full control of the remain sum instead of locked them into RA ERS. Any views?

I rank in the following order of preference:
1. SA's 4% , better liquidity after 55, FRS in RA.
2. RA's 4%. Lower liquidity until CPF LIFE payout.
3. OA's 2.5%.

Hence perform SA shield to maximize option 1. Perform OA->RA transfer when SA shield raised.
Also note withdrawal sequence restriction of SA/OA which I posted earlier in the thread (or similar CPF thread)

 

[fr33d0m]

I rank in the following order of preference:
1. SA's 4% , better liquidity after 55, FRS in RA.
2. RA's 4%. Lower liquidity until CPF LIFE payout.
3. OA's 2.5%.

Hence perform SA shield to maximize option 1. Perform OA->RA transfer when SA shield raised.
Also note withdrawal sequence restriction of SA/OA which I posted earlier in the thread (or similar CPF thread)

Liquidity is something you think about after you already have enough, which CPF life is not enough, even with ERS.

What’s the point of liquidity when you need withdraw it every month?

 

[zoneguard]

Liquidity is something you think about after you already have enough, which CPF life is not enough, even with ERS.

What’s the point of liquidity when you need withdraw it every month?

Sorry, I don't get your point. Can you rephrase?

 

[reddevil0728]

That's rather extreme. Implying that anyone disagreeing with you on this issue requires psychiatrist help.

Sorry. I didn't realise it was okay to imply someone is mentally unstable so long as you put a wink next to it.

agreed. Totally uncalled for comment. So putting an emoji now at the end of everything means one can say something nasty? pretty sure that's not the case. flagging it to mods to take a look.

Is $95K scary? Well, I don’t think so, or at least it’s a lot less scary than home prices in Singapore. It’s really weird to me how so many people think buying S$1 million plus homes is nothing to worry about but putting a tiny fraction of that into CPF causes great angst. It’s bizarre, so much so I think we need more psychiatrists in Singapore.

Good grief. Did you miss the emoticon? It’s a joke!

 

[reddevil0728]

Someone? Who? And what’s wrong with psychiatry?

nothing wrong with psychiatry.

but implying that anyone disagreeing with you on this issue requires psychiatrist help, is.

 

[reddevil0728]

By the way, on what planet is even an ERS-level CPF LIFE retirement income stream “too much” income? It’s not Planet Singapore as far as I can tell. Since I would never want to live on that low level of income if I could avoid it, why would I worry about “locking in” that level of income? I wouldn’t; I don’t. Nor should you, my fellow not poor person (I hope). Just figure out how much liquidity you genuinely need, then don’t worry otherwise about liquidity when a clearly superior offer is available.

probably others, but definitely not yours.