CPF SA

[ocs_woodlands]

How many more years to reach 55 ocs?

getting closer. another 8 years..

that day I told my boss that I plan to retire at 57/58... she was shocked cos she is already 57...... I told her that there are other meaningful things I want to do in life

 

[ocs_woodlands]

why need the hassle to do?
just take out everything and help kids topup their CPF lar

I am counting on the SA & MA interest as a part of the retirement income stream..... so it matters...

in 8 years' time, there should be in excess of 40k annual interests into these accounts for me and spouse. That will form about 50% of the retirement income flows.....

 

[henrylbh]

why need the hassle to do?
just take out everything and help kids topup their CPF lar

I don't have much. I plan to finish everything, including CPF, that I have by around 90. Only asset left will my 5rm flat for the time being. If I live too long, the hdb will be sold and I move into old age home CPF planning is important to get the max of out it to fund my retirement needs such that if I should loose all my other assets, CPF would be enough for my old age needs.

 

[hwmook]

Why would the shielding be stopped? CPF’s main mantra is to have the FRS when one turns 55. Doesn’t matter where the monies come from.

Similar when taking HDB loan, there was lots of people “shielding” the OA so that HDB won’t wipe out the OA.

That's what i did 4 years ago when i buy my BTO. It still work and CPF even revise their rules so that your OA doesn't have to be fully wiped clean when you take HDB loan now.

 

[Polar Bear King]

I don't have much. I plan to finish everything, including CPF, that I have by around 90. Only asset left will my 5rm flat for the time being. If I live too long, the hdb will be sold and I move into old age home CPF planning is important to get the max of out it to fund my retirement needs such that if I should loose all my other assets, CPF would be enough for my old age needs.

can sell off HDB to your kids also cash out
don't need to worry at all
our gov has excellent retirement planning for all sinkies

 

[dork32]

why need the hassle to do?
just take out everything and help kids topup their CPF lar

i feel topping up kids cpf with own cpf is a very lousy decision.

both the kids and parents cpf earn the same interest. there is no incentive to transferring to the kids cpf.

however,parents cpf are a lot more liquid. after 55, the parent can continue to earn interest in the cpf/ or can withdraw cpf for whatever purpose. for the kids, they can only use the oa for property/ shares.

top up parents cpf is a decision than top up kid's cpf

 

[dork32]

Why would the shielding be stopped? CPF’s main mantra is to have the FRS when one turns 55. Doesn’t matter where the monies come from.

Similar when taking HDB loan, there was lots of people “shielding” the OA so that HDB won’t wipe out the OA.

lets say i have 200k in oa and 200k in sa.

i shield, i will have 0 in oa and 40k in sa.

at 55, my ra will have 40k

i decide not to convert the money shielded back to cpf. my ra will not have frs. this is not what the garmen wants. so they may stop this.

 

[Polar Bear King]

i feel topping up kids cpf with own cpf is a very lousy decision.

both the kids and parents cpf earn the same interest. there is no incentive to transferring to the kids cpf.

however,parents cpf are a lot more liquid. after 55, the parent can continue to earn interest in the cpf/ or can withdraw cpf for whatever purpose. for the kids, they can only use the oa for property/ shares.

top up parents cpf is a decision than top up kid's cpf

I'm saying what's the point of shielding? just take everything out to top up kids CPF SA lor if you want to earn 4%pa interests. you guys all so short of cash meh?

 

[henrylbh]

lets say i have 200k in oa and 200k in sa.

i shield, i will have 0 in oa and 40k in sa.

at 55, my ra will have 40k

i decide not to convert the money shielded back to cpf. my ra will not have frs. this is not what the garmen wants. so they may stop this.

No use thinking what the gov wants. Just work within the rules and get the max benefits while still available.

 

[henrylbh]

I'm saying what's the point of shielding? just take everything out to top up kids CPF SA lor if you want to earn 4%pa interests. you guys all so short of cash meh?

Nothing to do with short of cash. Yield and liquidity, besides security, matter.

 

[Polar Bear King]

Nothing to do with short of cash. Yield and liquidity, besides security, matter.

Even easier
Use the cash to pay for kids BTO mortgage
Let them transfer their own OA to SA
Very simple
Roll it up not down

 

[The_Davis]

Polar how come your SA only 182k?

You only managed to hit FRS just this year?

 

[BBCWatcher]

i feel topping up kids cpf with own cpf is a very lousy decision.

both the kids and parents cpf earn the same interest. there is no incentive to transferring to the kids cpf.

That's not necessarily true. If your withdrawals are partially or fully from your Ordinary Account, then you plow those funds into a child's MediSave and/or Special Account(s), that's a net improvement in the interest rate. It could even be as much as a doubling of the interest rate, from 2.5% to 5.0% (bonus interest). Plus there could be some possible tax relief involved depending on the situation.

There's also a possible argument even when most or all of these funds land in a child's OA, such as when an elder's withdrawal primarily or exclusively comes from OA in order to help the child repay OA used for education. The child might then invest his/her OA funds via the CPF Investment Scheme. The child has a longer time horizon and thus is in a better position to invest OA funds.

 

[Polar Bear King]

Polar how come your SA only 182k?

You only managed to hit FRS just this year?

yar cos just sold cityview for $950k last Xmas mah

 

[Andrew833]

I'm saying what's the point of shielding? just take everything out to top up kids CPF SA lor if you want to earn 4%pa interests. you guys all so short of cash meh?

Cash on hand is better than cash lock down in kids CPF for many years.
Can use this cash to invest in something more liquid for your kids instead.

 

[Polar Bear King]

Cash on hand is better than cash lock down in kids CPF for many years.
Can use this cash to invest in something more liquid for your kids instead.

exactly,so what's the point to do CPF shielding? unnecessary loop right?
roll everything up would be so much easier

 

[BBCWatcher]

lets say i have 200k in oa and 200k in sa.

i shield, i will have 0 in oa and 40k in sa.

at 55, my ra will have 40k

Just to explain the mechanics, it'd typically involve these three acts shortly before your 55th birthday:

1. Shield all but $40,000 SA dollars (the minimum you must leave behind) using the CPF Investment Scheme (SA).

2. Shield all but $20,000 OA dollars (the minimum you must leave behind) using the CPF Investment Scheme (OA).

3. Use the remaining $20,000 of OA to make an extra mortgage payment.

i decide not to convert the money shielded back to cpf. my ra will not have frs. this is not what the garmen wants. so they may stop this.

I don't think the government would be particularly bothered. You're still automatically joining CPF LIFE (if you were born after 1957), you're still subject to a withdrawal restriction (since you didn't fund your Retirement Account "decently" but could have), and they're paying you less interest (OA at 2.5% v. RA at 4.0%). That's a good deal for the government and not a terrific deal for you, right?

 

[henrylbh]

Put money in kid's CPF? Over my dead body Only when the money is of no use till the day you die or the day the kid can use it. Else you die when the kids are still young, kids cannot touch what's inside CPF.

 

[BBCWatcher]

Cash on hand is better than cash lock down in kids CPF for many years.

No, not necessarily. You might be doubling the interest rate (from 2.5% OA withdrawal to as high as 5.0% MA/SA deposited including the bonus interest), plus possible tax relief. These assets are also extremely well protected globally against creditors and court judgments. Any "lock down" could be very well rewarded....

....And this maneuver works particularly well if this Singaporean citizen child is soon becoming an Australian citizen living in Australia, for example. Whereupon there is no "lock down." It's just an on demand "piggy bank" earning as much as 5.0% interest. Or how about something more mundane, like a child approaching age 55?

 

[terence2112]

That's what i did 4 years ago when i buy my BTO. It still work and CPF even revise their rules so that your OA doesn't have to be fully wiped clean when you take HDB loan now.

Yes, Had to revised. Because the only way to shield was to “invest” your OA.