CPF SA

[fr33d0m]

wat a laughable statement, you can take out 1 mil today then we talk.


also you do not take back 1.5 mil tomorrow. you take back 1.5 mil in 30 years time

If you can offer 1.5 million, I will take money from loan sharks. Just for argument sake.

It is not that 95K is a large sum. It is that some people feel the risk/reward is not worth of it. It has nothing to do with the number 95K.

Or you can give me the $10.

 

[Okenba]

On 55 when RA is formed, assume I have FRS inside. By when do I need to top up to ERS if I’m aiming ERS? Is it I have to top up at 55 or can I wait till 65 then top up to ERS? How does the topping up to ERS work?

My understanding is that you can top up to ERS anytime, and ERS increases every year too. But the longer you wait to top up, the less your money compounds.

 

[dork32]

If you can offer 1.5 million, I will take money from loan sharks. Just for argument sake.

It is not that 95K is a large sum. It is that some people feel the risk/reward is not worth of it. It has nothing to do with the number 95K.

Or you can give me the $10.

you can take 1 mil from loan shark then we talk.

my car cost just 95k. bbc already mentioned less than 50% of the household own a car. many of this cannot afford to own a car.

it is not the risk reward problem. it is the affordability. many people cannot afford to make this investment.

it is like saying, landed prices are going to go up. you put in 2 mil today. in 15 years, it is going to be 3 mil. better still buy a good class bungalow at 30 mil, we are going to sell it at 60 mil in a few years time. yes, lets go buy a good class bungalow now

 

[dork32]

If you can offer 1.5 million, I will take money from loan sharks. Just for argument sake.

you are the one that offer 1.5 mil the next day. we know this is crazy.

i offer you 1.5mil in 30 years. you give me your 1 mil today. i will honor my deal in 30 years.

 

[fr33d0m]

you can take 1 mil from loan shark then we talk.

my car cost just 95k. bbc already mentioned less than 50% of the household dont own a car. many of this cannot afford to own a car.

it is not the risk reward problem. it is the affordability. many people cannot afford to make this investment.

it is like saying, landed prices are going to go up. you put in 2 mil today. in 15 years, it is going to be 3 mil. better still buy a good class bungalow at 30 mil, we are going to sell it at 60 mil in a few years time. yes, lets go buy a good class bungalow now

There is no guarantee that landed will be 3 million when you need the money.

Circumstances are different. It is the best annuity available to everyone and it is not a long term commitment.

95K was not for everyone. The government does not enforce everyone to go to ERS. But people with extra 95K in CPF should seriously consider ERS for their own sake, as well as the benefit of Singapore.

 

[fr33d0m]

you are the one that offer 1.5 mil the next day. we know this is crazy.

i offer you 1.5mil in 30 years. you give me your 1 mil today. i will honor my deal in 30 years.

In 30 years, will you be around? I purposely put tomorrow and with government guarantee so that the risk is limited and worth of the return.

For your personal guarantee, your offer of 1 billion in 30 years will not mean anything.

 

[zoneguard]

My understanding is that you can top up to ERS anytime, and ERS increases every year too. But the longer you wait to top up, the less your money compounds.

Yes, from the point RA is formed, RA top-ups to current ERS can be done. And RA monies start compounding.

But there is a difference if you choose to do RA top-up later at the point when CPF LIFE payout starts between 65 to 70.

Before the beginning of LIFE payout, all RA monies will be used for CPF LIFE premium.
@BBCW: What happens if you choose Basic Plan?

After LIFE payout begins, you have the option of using the top-up RA monies for AMP or buy additional LIFE coverage.

BBCW clarified this point for me.

 

[BBCWatcher]

Yes, from the point RA is formed, RA top-ups to current ERS can be done. And RA monies start compounding.

But there is a difference if you choose to do RA top-up later at the point when CPF LIFE payout starts between 65 to 70.

Before the beginning of LIFE payout, all RA monies will be used for CPF LIFE premium.
@BBCW: What happens if you choose Basic Plan?

That’s simple. You get the Basic Plan monthly payout for the rest of your life, which is lower than the Standard Plan payout. The Basic Plan’s residual is higher after payouts start, but its residual also decreases with every passing month and also falls to zero, later, if you merely live long enough. The Basic Plan features a “burble” (my term for it) with a slight reduction in the monthly payout if you live long enough to see it. The burble exists because the CPF Board doesn’t smooth bonus interest effects in the Basic Plan. And because of inflation the real purchasing power of Basic Plan payouts fades over time, as with the Standard Plan. (The Escalating Plan is the only CPF LIFE payout plan that even attempts to combat inflation.)

If you don’t have a CPF nominee you particularly care about, you should NEVER choose the Basic Plan — that’s very clear. If you do, then you might or might not pick the Basic Plan.

After LIFE payout begins, you have the option of using the top-up RA monies for AMP or buy additional LIFE coverage.

BBCW clarified this point for me.

Yes, that’s right. That’s not to say you should wait until CPF LIFE payouts start to make RA top ups. You shouldn’t wait. The 4% RA interest is really quite special (especially nowadays), and it’s worth grabbing as early as allowed as much as reasonably practical, consistent with reasonable liquidity and portfolio diversification objectives.

 

[dork32]

There is no guarantee that landed will be 3 million when you need the money.

isn't landed much better than cpf?
you can stay in your landed shiok shiok, you can haolian to the frens and relative in your landed. and finally, there is a good chance that you are going to make money from it. I want to see you stay inside the cpf statement.

95K was not for everyone. The government does not enforce everyone to go to ERS. But people with extra 95K in CPF should seriously consider ERS for their own sake, as well as the benefit of Singapore.

This your most sensible statement so far. yes, ers can be beneficial to some. it is going to be a big burden if you do not have money for it.

No it is not people with 95k should consider cpf. it is people that have liquid asset of 300k should consider ers. and even if you have that, you liquid assets suddenly reduce by 30% when you plough your money in.

i myself will be going for ers. but make sure you have enough liquidity before going for it.

 

[zoneguard]

That’s simple. You get the Basic Plan monthly payout for the rest of your life, which is lower than the Standard Plan payout.

I meant to ask this question actually:
Basic plan leaves 80% to 90% in RA with the rest deducted for the LIFE premium. Standard/Escalating plans sweep all RA monies for LIFE premiums.

Does this happen as well for the RA top-up to ERS as well? If we choose Basic, RA will still be left with this 80%-90%?

 

[BBCWatcher]

isn't landed much better than cpf?
you can stay in your landed shiok shiok, you can haolian to the frens and relative in your landed. and finally, there is a good chance that you are going to make money from it. I want to see you stay inside the cpf statement.

No, not necessarily. Liquid Singapore dollar cash always works in Singapore, including for obtaining housing. CPF accounts can often supply liquid cash, especially at age 55+. Bigger CPF accounts supply more cash. CPF accounts are not a burden.(*) They don’t require maintenance, cleaning, electric bills, or property taxes, as examples.

If you have a big enough pile of secure, well defended, reasonably liquid Singapore dollars you’re never going to be homeless or hungry in Singapore. If you have a landed property (and keep it) you could be hungry — the plaster walls don’t taste very good — and might even eventually be homeless when the roof collapses due to lack of upkeep.

(*) With the fairly rare exception of CPF members who are subject to some other tax jurisdiction and its impositions, but then the landed property would be, too.

 

[polyglob]

Yes, from the point RA is formed, RA top-ups to current ERS can be done. And RA monies start compounding.

With SA shielding, at 55, using this year's numbers:

OA = OA-orig minus 141k
SA while shield is up = 0
SA after shield goes down = SA-orig minus 40k
RA = 181k

At that point, topping up RA to ERS will take from SA first? Meaning if want to take from OA, then should top up before lowering the SA shield?

 

[dork32]

No, not necessarily. Liquid Singapore dollar cash always works in Singapore, including for obtaining housing. CPF accounts can often supply liquid cash, especially at age 55+. Bigger CPF accounts supply more cash. CPF accounts are not a burden.(*) They don’t require maintenance, cleaning, electric bills, or property taxes, as examples.
.

sorry, if you are below 55, landed properties are a lot more liquid than cpf monies.

 

[dork32]

I meant to ask this question actually:
Basic plan leaves 80% to 90% in RA with the rest deducted for the LIFE premium. Standard/Escalating plans sweep all RA monies for LIFE premiums.

Does this happen as well for the RA top-up to ERS as well? If we choose Basic, RA will still be left with this 80%-90%?

cpf does not really care if you have ers, frs or brs or any sum in between. notice that the action is on your ra.

 

[dork32]

No, not necessarily. Liquid Singapore dollar cash always works in Singapore, including for obtaining housing. CPF accounts can often supply liquid cash, especially at age 55+. Bigger CPF accounts supply more cash. CPF accounts are not a burden.(*) They don’t require maintenance, cleaning, electric bills, or property taxes, as examples.

If you have a big enough pile of secure, well defended, reasonably liquid Singapore dollars you’re never going to be homeless or hungry in Singapore. If you have a landed property (and keep it) you could be hungry — the plaster walls don’t taste very good — and might even eventually be homeless when the roof collapses due to lack of upkeep.

(*) With the fairly rare exception of CPF members who are subject to some other tax jurisdiction and its impositions, but then the landed property would be, too.

also you can rent out your rooms in your landed. I want to see you rent your your cpf.

 

[a4973]

Yes, from the point RA is formed, RA top-ups to current ERS can be done. And RA monies start compounding.

But there is a difference if you choose to do RA top-up later at the point when CPF LIFE payout starts between 65 to 70.

Before the beginning of LIFE payout, all RA monies will be used for CPF LIFE premium.
@BBCW: What happens if you choose Basic Plan?

After LIFE payout begins, you have the option of using the top-up RA monies for AMP or buy additional LIFE coverage.

BBCW clarified this point for me.

Would the following work :?
At RA creation, use cash top up to ERS.
Let RA ERS compound till age 64+.
Just before opt-in for cpf life, pledge property and withdraw BRS leaving FRS for cpf life standard plan.
After cpf life standard kicks in, use the withdrawn BRS cash to top up RA for AMP.
What are the upsides / downsides to do the above?
Thanks

 

[fr33d0m]

No it is not people with 95k should consider cpf. it is people that have liquid asset of 300k should consider ers. and even if you have that, you liquid assets suddenly reduce by 30% when you plough your money in.

i myself will be going for ers. but make sure you have enough liquidity before going for it.

please elabrate. What's the requirement of 300K extra liquid assets before considering ERS? What's the 300K for?

 

[fr33d0m]

sorry, if you are below 55, landed properties are a lot more liquid than cpf monies.

what is ers for below 55?

 

[fr33d0m]

Would the following work :?
At RA creation, use cash top up to ERS.
Let RA ERS compound till age 64+.
Just before opt-in for cpf life, pledge property and withdraw BRS leaving FRS for cpf life standard plan.
After cpf life standard kicks in, use the withdrawn BRS cash to top up RA for AMP.
What are the upsides / downsides to do the above?
Thanks

What's your intended use of money withdrawn from CPF?

It is unlikely that you can get a better return than CPF LIFE for almost all average people in SG.

 

[Tiger9119]

What is AMP?

Additional Monthly Payout (AMP).

https://www.cpf.gov.sg/members/FAQ/...group=cpf+life&ajfaqid=2186389&folderid=11673