CPF SA

[BBCWatcher]

That’s a very detailed reply BBCW thks! There’s only a lil room for VC since earning is close to Annual limit FYI
Any other suggestions with cash top up whatsoever?

Well, a little room is better than zero room.

Any spouse, partner, or parent in the picture?

 

[polyglob]

Must depend on your investing abilities as well.

Some people are able to make a better return outside of CPF and should withdraw the cash from CPF to do so.

Sent from . using GAGT

Sure there will be people who make outsized investing returns compared to keeping the money in CPF. But of that group of people, I don't believe many will want/need to use their CPF money to whack some more upon 55.

 

[The_Davis]

That’s a very detailed reply BBCW thks! There’s only a lil room for VC since earning is close to Annual limit FYI
Any other suggestions with cash top up whatsoever?

are you planning to stop work after 62? If yes how about SRS?

 

[SUVperb]

are you planning to stop work after 62? If yes how about SRS?

Probably but not into investing FYI

 

[8zaoyu]

do you see yourself using your 80k cash? if you are sure it is a no, then paying hdb is better than paying back to cpf. hdb loan is 2.6%. oa is only 2.5%.

if it is a maybe, you should remember this. once you pay back, you cannot get the money out anymore. the actual cost of holding this 50k is $50 per year. not very expensive.

the other thing to note is this. when you repay your cpf, money goes into oa. if you need cash and withdraw, it comes out from the sa. once it comes out from the sa, it is very difficult to put it back.

Tis is the best advice to SUVperb. I don't think he needs the 80k urgently presently. As he has reached FRS, he should just fully pay his HDB loan, now he is too late to pump up SA as he is already being over 55. If he wants more income after retiring, can rent out his spare rooms/spare property and stay AirnB or backpacking round the world! Spend poorly but live richly. Must not play stocks,cannot sleep well - keep listening to stock news after 65 meh? But honestly, who here have not played in dividend stocks, IPOs, etc. Nobody will tell of their losses especially to their spouses.... sh.....

 

[Andrew833]

Sure there will be people who make outsized investing returns compared to keeping the money in CPF. But of that group of people, I don't believe many will want/need to use their CPF money to whack some more upon 55.

Why not? After 55, can still invest in long term and earn a passive income from dividend, interest etc.

 

[rrr2015]

me not senior nor guru, just sharing 2cts
consider this, your hdb fixed rate loan payment will gradually reduce. but if park in cpf, interests will gradually compound & eventually catch-up.

anyway not big differences depending remaining tenure of loan, so choice is yours

That’s a very detailed reply BBCW thks! There’s only a lil room for VC since earning is close to Annual limit FYI
Any other suggestions with cash top up whatsoever?

 

[henrylbh]

Hi seniors
Am 55+ and has FRS in RA,124k OA,30K in SA.60k in MA.i have about 80k spare cash and would like to know is it wise to refund my accrued hdb interest or leave it?not thinking of downgrading atm.
I still have outstanding hdb loan of about 50k.
Was thinking btw to pay my flat fully OR pump my 80k spare to pay accrued hdb interest OR grow my money in cpf?
Please advise seniors.APPRECIATE ALL Views thanks!

Can consider pumping RA to ERS?

 

[henrylbh]

That’s a very detailed reply BBCW thks! There’s only a lil room for VC since earning is close to Annual limit FYI
Any other suggestions with cash top up whatsoever?

You getting bonus of about 40k and hence to annual limit? If not, there should be a gap of about 10k to VC. Strange indeed that someone did not suggest you to top up spouse's CPF

 

[Tiger9119]

You getting bonus of about 40k and hence to annual limit? If not, there should be a gap of about 10k to VC. Strange indeed that someone did not suggest you to top up spouse's CPF

What if his/her spouse is still working, also above 55 and the income is as high as him/her? Still can top up spouse's CPF?

 

[maple96]

THEMIKOS is presenting a very sensible, logical idea here, .

i agree with bbc and themikos.

maple taught us that you can shield for both.

if you have spare cash on hand and would like to earn the 2.5% interest of oa, shielding could be one way for you to achieve.

Thank you guys for your compliments and strong support on the sensible, logical idea presented by THEMIKOS. And to dork32 for acknowledging my past sharing as well.


What THEMIKOS presented were tips and tricks I shared with him earlier this week, but he kept some secret, and I also kept some secret.


What I want to highlight are contents he changed/amended but I dunno why.

Read the highlights in red and my comments in blue below:

So i have been reading this thread and have come to this conclusion. Correct me if i am wrong. For the following scenario, let’s assume it is fully CPF based profits and no investments in stocks nor property purchase.

Just take note of No property purchase

To get the most out of one’s CPF, they should:

1. Just before 55, make OA be $0, SA be $40k and MA at 60k (so called SA shielding).

I shared about using CPFIS (Investment Scheme via UT) to do the shielding.

Per CPF rules: “You can invest your CPF savings under the CPF investment Scheme (CPFIS) after setting aside $20,000 and $40,000 in your OA and SA respectively. “

So what cannot be shielded?

OA=20k, SA=40K (assuming u did not do any cash topup to SA or such topups+interest are below 40k).

MA is irrelevant in this strategy.

I shared the following CPF rule sometime last year:

What CPFB will do on 55th birthdate: Transfer OA (15k) + SA (40k) to RA, leaving 5k in OA for u to withdraw since u cannot meet FRS on this day. So RA will have 55k balance.

(a4973 shared his experience then and confirmed this was the case for him)


2. Top up RA to FRS or ERS using cash.

I only shared FRS

3. Lower shield to put OA/SA funds back to the respective accounts.

4. Enjoy the yearly interests that OA/SA/MA generates while keeping the principal amount. RA is not affected as RA interests add up to the CPF LIFE pool.

MA is never in the picture of shielding strategy nor withdrawal strategy = u cannot withdraw interest nor any balance in MA the same way as OA/SA.

Am i correct to say this dear gurus?

Goodluck!

(Famous Quotes: "Sometimes we need to know when to stop arguing and let others be wrong")

 

[SUVperb]

You getting bonus of about 40k and hence to annual limit? If not, there should be a gap of about 10k to VC. Strange indeed that someone did not suggest you to top up spouse's CPF [/QUOTE
2019 it was 37k credited in my cpf fyi

 

[THEMIKOS]

Thanks Maple96. The extras i brought up were stuff that just came to my mind and so decided to ask. As to if i had omitted some details, i apologise because i perhaps have not memorised whatever was shared in detail and it was never to mislead anyone here. I am no expert, learning along the way. Still got 10 over years before i hit 55 so just hope to learn the tricks in time.

Thank you guys for your compliments and strong support on the sensible, logical idea presented by THEMIKOS. And to dork32 for acknowledging my past sharing as well.


What THEMIKOS presented were tips and tricks I shared with him earlier this week, but he kept some secret, and I also kept some secret.


What I want to highlight are contents he changed/amended but I dunno why.

Read the highlights in red and my comments in blue below:



Goodluck!

(Famous Quotes: "Sometimes we need to know when to stop arguing and let others be wrong")

 

[The_Davis]

Hopefully double shield still around 20 years later.

 

[BBCWatcher]

MA is never in the picture of shielding strategy nor withdrawal strategy = u cannot withdraw interest nor any balance in MA the same way as OA/SA.

Not in the same way, but you can certainly use it for qualified medical expenses and premiums in Singapore, and not only yours.

However, maybe you shouldn’t. MediSave is quirky in certain ways. If it’s pegged at the Basic Healthcare Sum then “all three account” Voluntary Contributions flow into OA and SA exclusively. This feature can be useful for “piggybanking,“ especially once you reach age 65 and your BHS is fixed for life. Also, when your MediSave Account is at the BHS and from age 55+, the interest rolls over to your Retirement Account. It’s a “backdoor” way to inject more dollars into your Retirement Account, which could be particularly interesting for those pegging their RAs to the Enhanced Retirement Sum. (Topping up to the ERS in your 55th birthday month, ERS top ups every time it’s raised, MA kept pegged at the BHS, and payout deferral to age 70 is the recipe for maximum possible RA attainment if you’d like to do that.) And while CPF isn’t particularly designed as a bequest vehicle, MediSave is the first best CPF tool in that role if that’s what you’d like to do.

 

[BBCWatcher]

SUVperb, I assumed from “HDB interest” that you mean a HDB loan. Is that what you mean, or is that $50K of remaining mortgage a bank loan? If a bank loan, what’s the interest rate?

I’m still wondering if there’s a spouse, partner, or elder in the picture. Henry’s suggestion about a Retirement Account top up is also a good one. A Retirement Account top up will outperform an accelerated HDB loan repayment in investment terms. Both are liquidity reducing, but it looks like you have decent liquidity. Also, you currently have at least $90.5K of room for a Retirement Account top up, so you have the option to allocate more than $50K (your outstanding mortgage amount) to the effort if you wish.

By the way, Singlife is currently offering 2.5% interest on up to $10,000 per person deposited with them, SDIC protected. Even that’s a better deal than an Ordinary Account repayment for that amount because the interest is computed daily (not based on the lowest monthly balance), and it can be withdrawn at any time without disrupting the 4.0% earning Special Account. Singlife can change the 2.5% interest rate at any time, but for as long as it lasts it’s nice.

 

[maple96]

Not in the same way, but you can certainly use it for qualified medical expenses and premiums in Singapore, and not only yours.

However, maybe you shouldn’t. MediSave is quirky in certain ways. If it’s pegged at the Basic Healthcare Sum then “all three account” Voluntary Contributions flow into OA and SA exclusively. This feature can be useful for “piggybanking,“ especially once you reach age 65 and your BHS is fixed for life. Also, when your MediSave Account is at the BHS and from age 55+, the interest rolls over to your Retirement Account. It’s a “backdoor” way to inject more dollars into your Retirement Account, which could be particularly interesting for those pegging their RAs to the Enhanced Retirement Sum. (Topping up to the ERS in your 55th birthday month, ERS top ups every time it’s raised, MA kept pegged at the BHS, and payout deferral to age 70 is the recipe for maximum possible RA attainment if you’d like to do that.) And while CPF isn’t particularly designed as a bequest vehicle, MediSave is the first best CPF tool in that role if that’s what you’d like to do.

chicken and duck debate again!

Who can spot his serious mistakes?

I say goodbye to u with this Famous Quote: "Sometimes we need to know when to stop arguing and let others be wrong"

 

[maple96]

Thanks Maple96. The extras i brought up were stuff that just came to my mind and so decided to ask. As to if i had omitted some details, i apologise because i perhaps have not memorised whatever was shared in detail and it was never to mislead anyone here. I am no expert, learning along the way. Still got 10 over years before i hit 55 so just hope to learn the tricks in time.

No worries, it is a learning journey, those comments were not meant for u, u forgot the right things anyway cos nobody discussed it.

Thanks for sharing. Goodluck!

 

[BBCWatcher]

Who can spot his serious mistakes?

Here we go again with the “I’ve got a secret (not)” games. It’s SO boring.

Not in the same way, but you can certainly use it for qualified medical expenses and premiums in Singapore, and not only yours.

True.

However, maybe you shouldn’t. MediSave is quirky in certain ways. If it’s pegged at the Basic Healthcare Sum then “all three account” Voluntary Contributions flow into OA and SA exclusively.

True. Maple96 is likely hot and bothered because this characteristic of “all three account” VCs for a member age 55+ depends on the Retirement Account being funded at the Full Retirement Sum (or BRS with property pledge/charge). Otherwise a portion of the VC ends up in the RA when MediSave is at the BHS. OK, there’s Maple96’s big “secret,” which he could have just posted. SUVperb’s Retirement Account is funded to the FRS, so this caveat doesn’t apply to him/her.

This feature can be useful for “piggybanking,“ especially once you reach age 65 and your BHS is fixed for life. Also, when your MediSave Account is at the BHS and from age 55+, the interest rolls over to your Retirement Account.

True, same reference.

It’s a “backdoor” way to inject more dollars into your Retirement Account, which could be particularly interesting for those pegging their RAs to the Enhanced Retirement Sum. (Topping up to the ERS in your 55th birthday month, ERS top ups every time it’s raised, MA kept pegged at the BHS, and payout deferral to age 70 is the recipe for maximum possible RA attainment if you’d like to do that.) And while CPF isn’t particularly designed as a bequest vehicle, MediSave is the first best CPF tool in that role if that’s what you’d like to do.

True. As long as someone else’s MediSave Account is paying your MediShield Life or Integrated Shield premiums, and as long as you don’t touch the money, you can leave your MediSave dollars untouched for the rest of your life. They’ll then go to your CPF nominees. MediSave earns the highest interest and qualifies for bonus interest, but unlike your Retirement Account there’s no maximum age 70 payout start. Residual OA+SA earns that blended interest rate a little above 2.5% when you try to add funds past age 55, and it’s easier to withdraw than MediSave. So if using CPF as a bequest delivery vehicle is what you’d like to do, start with MediSave.

Does Maple96 want to hang his hat on the fact that there might be compulsory CPF contributions in the picture? I don’t know. That would require mind reading and more stupid game playing, wasting everyone’s time. Again.

 

[dork32]

chicken and duck debate again!

Who can spot his serious mistakes?

I say goodbye to u with this Famous Quote: "Sometimes we need to know when to stop arguing and let others be wrong"

the serious mistake is ma interest overflow to oa rather than ra.

at this stage of life, it is highly likely that the frs is reached, so oa will overflow into oa rather than ra.