CPF SA

[maple96]

one question, can we shield ourselves out of cpf life.?

that is at 55,
i do a shield such that my sa has only 40k to be transferred to ra.
i do not top-up my ra any more
at 65 i choose the rss because i have less than 60k.

in this way, i do not have to look at cpf life.

One way to stay out of CPF LIFE if you wish is to (a) buy a private life annuity from a reliable payer that pays monthly starting no later than about age 69.8, and (b) apply to withdraw your entire CPF Retirement Account balance based on having another life annuity.

Dun be mislead by this PHD again

 

[BBCWatcher]

Dun let this PHD mislead u again

prof, can you then advise what is correct? I have never considered this path before, so i noe next to nuts about it.

Relax, Dork32. Maple96 wants to play games.

OK, let's dig into this. As CPF explains, for the cohort born between January 1, 1958, and April 30, 1961 (inclusive), there's a 55th birthday $40,000 threshold applied to decide whether CPF LIFE enrollment is automatic. I did not include the end date for that rule, and Maple96 wants to play "I've got a secret" games as usual. Dumb, but there we go....

....And it doesn't matter, because if you have $40,000 in your Retirement Account on your 55th birthday you're going to have >$60,000 in your Retirement Account by age 64. That's just math, applying 4% annual compounded interest plus even the most pessimistic bonus interest assumption (1% on RA only). And that triggers the second part of the rule, which is $60,000 at age 64 1/2 to be automatically channeled into CPF LIFE.

OK, so that's an elaboration. I forgot the $40K threshold expired with those born after April 30, 1961. Sorry about that, there you go. But it doesn't matter, because the $40K rule is redundant to the $60K at 64 1/2 rule for younger cohorts. The answer to your question is still no, you're going onto to CPF LIFE automatically when your minimum $40K from your Special Account rolls into your Retirement Account.

The answer is also still that you can opt out of CPF LIFE if you get a reasonable alternative life annuity from another supplier. But that also means you have to pull the funds out of your Retirement Account before age 70, the maximum CPF LIFE payout start age. That's what opting out of CPF LIFE means: opting out of your Retirement Account, too. It's an all or nothing deal.

Or, if you want to pull up stakes completely from Singapore (and Malaysia) -- retire in Iceland with a different passport, as one example -- then you can skip CPF LIFE. Indeed, you won't be able to start CPF LIFE payouts if they haven't already started in that scenario.

If you hate CPF LIFE, and if you don't like the options I described, then probably what you want to do is to defer payouts to age 70. At least that way you'll be equivalent to deferred classic Retirement Sum Scheme for as long as possible. Then, if you should pass away before age 70 (which is more likely than passing away before age 65), you will never have participated in CPF LIFE. (Victory?)

 

[maple96]

Relax, Dork32. Maple96 wants to play games.

OK, let's dig into this. As CPF explains, for the cohort born between January 1, 1958, and April 30, 1961 (inclusive), there's a 55th birthday $40,000 threshold applied to decide whether CPF LIFE enrollment is automatic. I did not include the end date for that rule, and Maple96 wants to play "I've got a secret" games as usual. Dumb, but there we go....

....And it doesn't matter, because if you have $40,000 in your Retirement Account on your 55th birthday you're going to have >$60,000 in your Retirement Account by age 64. That's just math, applying 4% annual compounded interest plus even the most pessimistic bonus interest assumption (1% on RA only). And that triggers the second part of the rule, which is $60,000 at age 64 1/2 to be automatically channeled into CPF LIFE.

OK, so that's an elaboration. I forgot the $40K threshold expired with those born after April 30, 1961. Sorry about that, there you go. But it doesn't matter, because the $40K rule is redundant to the $60K at 64 1/2 rule for younger cohorts. The answer to your question is still no, you're going onto to CPF LIFE automatically when your minimum $40K from your Special Account rolls into your Retirement Account.

The answer is also still that you can opt out of CPF LIFE if you get a reasonable alternative life annuity from another supplier. But that also means you have to pull the funds out of your Retirement Account before age 70, the maximum CPF LIFE payout start age. That's what opting out of CPF LIFE means: opting out of your Retirement Account, too.

Or, if you want to pull up stakes completely from Singapore (and Malaysia) -- retire in Iceland with a different passport, as one example -- then you can skip CPF LIFE. Indeed, you won't be able to start CPF LIFE payouts if they haven't already started in that scenario.

If u made a serious mistake telling him the wrong CPF rules, just admit your mistakes. Dun write a long excuse that I am play games with u!

I am not free to play games with u!

your revised answers are still misleading

I will report u for using the WORD in red, it is not allowed in hardwarezone, it is an infraction .


Always insult, blame, scold and accuse me whenever u make mistakes with your Wall of Text

 

[BBCWatcher]

your revised answers are still misleading

If you'd like to provide any sort of useful contribution, you're welcome to explain how. Otherwise, you're just wasting everyone's time.

 

[maple96]

If you'd like to provide any sort of useful contribution, you're welcome to explain how. Otherwise, you're just wasting everyone's time.

i have reported.

 

[dork32]

Also, if you run the Retirement Account forward with $40,000 at age 55 at 4% interest and the most pessimistic bonus interest assumption (bonus interest only on RA), you'll cross the $60,000 threshold before your 64th birthday, well before the $60,000 threshold for automatic CPF LIFE enrollment at age 64 1/2.

ok i did not run through the math, my bad

One way to stay out of CPF LIFE if you wish is to (a) buy a private life annuity from a reliable payer that pays monthly starting no later than about age 69.8, and (b) apply to withdraw your entire CPF Retirement Account balance based on having another life annuity.

this is crazy. you mentioned cpf life probably the best annuity in the market. i buy a lousy annuity in the open market so as to sell away my cpf life?

having said that even if cpf life is the best in the market does mean that everyone needs it. it is like saying
A: i know the best butcher in sg. he sells the best quality meat and the lowest possible price. You must buy from him.
B: I am a vegetarian

 

[dork32]

Or, if you want to pull up stakes completely from Singapore (and Malaysia) -- retire in Iceland with a different passport, as one example -- then you can skip CPF LIFE. Indeed, you won't be able to start CPF LIFE payouts if they haven't already started in that scenario.

this again is crazy. give up your citizenship and get frozen in iceland and get burned by their volcano larva.

Just for you info run to sabah sarawak also can take out cpf

If you hate CPF LIFE, and if you don't like the options I described, then probably what you want to do is to defer payouts to age 70. At least that way you'll be equivalent to deferred classic Retirement Sum Scheme for as long as possible. Then, if you should pass away before age 70 (which is more likely than passing away before age 65), you will never have participated in CPF LIFE. (Victory?)

it is not a matter of liking or disliking cpf life. it is good to know all the options available.

 

[maple96]

one question, can we shield ourselves out of cpf life.?

that is at 55,
i do a shield such that my sa has only 40k to be transferred to ra.
i do not top-up my ra any more
at 65 i choose the rss because i have less than 60k.

in this way, i do not have to look at cpf life.

I prefer not to answer and let others think and debate on it.

To me, this question is playing devil's advocate, useless to debate cos the answer is obviously a NO.

Why? I have to make many assumptions such that your RA balance at 65 will be less than 60k :

1. Will u retire and not contribute to CPF after 55?
2. Will u not receive any free RA money from govt from 55 to 65?
3. Will CPF interest rates change from 55 to 65?
4. U have a big balance in SA? Or continue to risk holding it in CPFIS/SA until 65? CPF rules are not clear what will happen to CPFIS/SA money at 65, but is clear if u return it to SA (it will end up in RA at 65!
5. See edit below

So do u think u can shield yourself out of CPF Life?

We are talking about your case study. Someone likes to deviate from case study in point and tell stories.

Pte annuity - needless to discuss, but read the correct rules from the CPF website, what BBC wrote is wrong/misleading.

Edit: some more assumptions: U either die or kena tpd/terminal illness before 65, then Yes if u choose to but this is opting out of CPF Life, the fate of RA monies will be different.

6. Will CPFB increase the limit of 60k (due to complaints or new govt or whatever reasons)?

7.WHY OA IS ZERO? NOBODY CARE TO COMMENT? Now u know why is useless to debate?

 

[BBCWatcher]

this is crazy. you mentioned cpf life probably the best annuity in the market. i buy a lousy annuity in the open market so as to sell away my cpf life?

I agree it would be "crazy."

having said that even if cpf life is the best in the market does mean that everyone needs it.

The government disagrees about "everyone," to a first order approximation. Most governments disagree, and not just in the developed world.

this again is crazy. give up your citizenship and get frozen in iceland and get burned by their volcano larva.

Frozen and burned? That sounds like Singapore between indoor cinemas and outdoor parking areas.

Fun fact: Iceland is the one piece of land left on earth that, for now, has no mosquitoes. There's no ironclad guarantee that Iceland will remain mosquito free as the climate changes. There have been some mosquito "explorers" who have scouted Iceland, but no mosquitoes have settled in Iceland yet.

 

[dork32]

The government disagrees about "everyone," to a first order approximation. Most governments disagree, and not just in the developed world.

the government is not run by the smartest people around.

just look at some of the stupid social distancing rules.

you cannot sit alone on a park bench, even if there is no one around, but you can sit on a bus/mrt seat with so many people around you.

you look at some of the things other government do, i would laugh till my teeth drop

 

[dork32]

someone that says "everyone" needs a life annuity is also not very smart. this sort of sweeping statement is completely wrong.

 

[ocs_woodlands]

the government is not run by the smartest people around.

just look at some of the stupid social distancing rules.

you cannot sit alone on a park bench, even if there is no one around, but you can sit on a bus/mrt seat with so many people around you.

you look at some of the things other government do, i would laugh till my teeth drop

just look at what happened between patient 42 and 2/4.

a certain ministry cost SG $92B dollars...

 

[SKenny]

someone that says "everyone" needs a life annuity is also not very smart. this sort of sweeping statement is completely wrong.

Personally I prefer the minimum sum scheme to the CPFLife scheme which is an annuity scheme.

I will revert to the minimum sum scheme in a heartbeat if I am allowed to do so.

 

[celtosaxon]

someone that says "everyone" needs a life annuity is also not very smart. this sort of sweeping statement is completely wrong.

Here is the irony.

If someone has the financial means to not need CPF LIFE, then FRS would become so insignificant to them that it won’t even matter!

That said, even someone with significant financial means can become destitute under inexplicable circumstances.

At the end of the day, it is not a bad idea for everyone to have a small bit of immutable income to fall back on, should the worst befall them.

FRS is not exactly extravagant, it will only replace what, maybe 25% of the average salary here? No retiree should have less than 25% in safe, fixed income investments anyway. This allows you to invest more of your non-CPF portfolio in riskier assets with potentially higher returns.

 

[BBCWatcher]

I agree with your logic, Celtosaxon. It is logical.

 

[77james]

I think transfer OA to SA is one part of the RSTU scheme. Ultimately, its to eventually build up your SA, so that would have the FRS in the RA when turning 55.

I just transferred 40k to my SA, so i can meet the BRS. Then will use the 4% interest and MA overflow to slowly build up to FRS. Will take a while, but oh wells.

I read RSTU is topping up with cash.
Transfer from OA to SA is not right?

If it is. Can claim 7k relief for tax relief once I transfer 7k OA to SA?

 

[Kaypohji]

No you can’t

I read RSTU is topping up with cash.
Transfer from OA to SA is not right?

If it is. Can claim 7k relief for tax relief once I transfer 7k OA to SA?

 

[The_Davis]

Why such threads always end up with dork32, BbC and maple96 arguing?

 

[77james]

No you can’t

Ya I know it can’t if not wrong

So transferring from OA is not consider top up. Because eventually it yr RA

Top up RA I suppose is only using cash so entitle to max 7k tax relief. Purpose government encourage ppl use extra liquid cash to save for retirement.

Because OA and SA are already lock for RA so transfer will not give us tax relief.

So I think transfer doesn’t consider as a topup imo

 

[henrylbh]

Just to check , so at age 55
Got RA, OA, SA, MA

Rules for withdrawal from SA/OA is from SA first. Any minimum sum to adhere to now?? Or can withdraw down to last cent?

Generally at 55, SA followed by OA will be transferred into RA to meet FRS, the balance (SA followed by OA) can be withdrawn anytime in any amount as you like. If FRS not met, can only withdraw $5k. MA cannot touch. Any amount above BHS in MA fixed at 65 will overflow into OA or RA, if FRS was not met at 55.

Any inflow from 55 will go into OA, SA and MA (limit to prevailing BHS at 65). SA and OA can be withdrawn if FRS has been met at 55. Otherwise, shortfall in FRS at 55 need to be made good first when making withdrawal.

RA will stream out as life payout anytime (you decide) between 65 and 70.

Older cohorts may have different rules.