CPF SA

[BBCWatcher]

Cannot add cash anymore to RA.
Already maxed out liao.

Unless she specifically added funds to her RA yesterday (January 1, 2022) or (now) today, yes, she can add funds to her Retirement Account. She should check again. The Enhanced Retirement Sum increased yesterday (January 1, 2022). The ERS limit is based on principal only, so every time the ERS is raised she has more room to add dollars to her Retirement Account. She can keep doing that for the rest of her life if she wishes.

A qualified family member (see below) may be able to transfer their OA dollars into her RA, up to the ERS.

Now house also fully paid. Should she just transfer OA to SA since house is fully paid. She is 66.

As I wrote, she cannot. OA to SA transfers are only available to members under age 55.

If she make the transaction to move OA to SA in cpf. What will happen? The transaction will not go through?

Correct.

She can transfer her OA to someone else's RA or SA, a qualified family member's. Specifically, to any of her parents, parents-in-law, grandparents, grandparents-in-law, spouse, and/or siblings. When the family recipient is under age 55, she can transfer OA dollars into that recipient's Special Account up to the current Full Retirement Sum. When the family recipient is age 55 or older she can transfer OA dollars into that recipient's Retirement Account up to the Enhanced Retirement Sum, a limit which is based on principal only.

The next time a withdrawal is made from her MediSave Account -- an insurance premium payment, for example -- she can make a Voluntary Contribution to replenish the funds. The VC may qualify for tax relief if she's otherwise eligible.

 

[babyrobo]

Contributions to SA means SA balance can exceed FRS, only MA has the hard limit BHS and reddevil linked the diagram on how MA excess contributions over BHS flow to SA or OA depending on the situation. FRS is for limiting cash top-ups and OA->SA transfers.

The extra interest has one specific scenario where extra interest earned on the OA balance goes over to SA. Other than that, SA interest stays in SA and OA interest stays in OA.

The extra interest has one specific scenario where extra interest earned on the OA balance goes over to SA. Other than that, SA interest stays in SA and OA interest stays in OA.

What's the specific scenario you've shared above? Thanks

 

[Cobra!]

The extra interest has one specific scenario where extra interest earned on the OA balance goes over to SA. Other than that, SA interest stays in SA and OA interest stays in OA.

What's the specific scenario you've shared above? Thanks

Theres a link no?

 

[jasvonvios]

At age 65 (before any payout starts) one can opt to withdraw 20% of RA - I believe this includes everything (top ups, accrued interests of any kind), but can anyone verify this? Always wanted to ask CPFB this but never got round to doing it..

My understanding top up will form part of cpf life payout, therefore not eligible for withdrawal.
I am 57 and on FRS, want to continue with top up till 64 and transfer 20% to OA at 65, is that an option?

 

[zoneguard]

I am 57 and on FRS, want to continue with top up till 64 and transfer 20% to OA at 65, is that an option?

For the 20% PEA lump sum withdrawal , RSTU monies (C) are excluded from the calculation:
https://www.cpf.gov.sg/member/faq/r...ligibility-age-lump-sum-withdrawal-amount-com
Payout eligibility age lump sum withdrawal amount computed at age 65 [(A+B-C-D) x 20%] - $5,000

You also need to have housing refund eligibility to deposit the funds back to OA.

But OA's yield is 2.5% and RA's yield is 4% so what's the objective here? The PEA lump sum withdrawal will also reduce your LIFE payout.

 

[vsvs24]

For the 20% PEA lump sum withdrawal , RSTU monies (C) are excluded from the calculation:
https://www.cpf.gov.sg/member/faq/r...ligibility-age-lump-sum-withdrawal-amount-com
Payout eligibility age lump sum withdrawal amount computed at age 65 [(A+B-C-D) x 20%] - $5,000

You also need to have housing refund eligibility to deposit the funds back to OA.

But OA's yield is 2.5% and RA's yield is 4% so what's the objective here? The PEA lump sum withdrawal will also reduce your LIFE payout.

Probably for the liquidity or need OA for housing.

I was thinking along this line too. Not working so want to preserve amounts in OA and SA so that can draw down before 65.

Was considering whether to set RA to ERS instead of FRS but this means locking up more funds. So was considering topping up midway and do PEA drawdown at age 65 such that after the drawdown still have FRS amount intact for the monthly payout.

 

[zoneguard]

Probably for the liquidity or need OA for housing.

For housing, the request for the OA reserved amount needs to be given to CPFB before 55:
https://www.cpf.gov.sg/member/faq/h...ing-55-years-old-can-i-continue-to-use-my-cpf

Anyway RSTU monies cannot be withdrawn under PEA lump sum or BRS (property pledge).

 

[vsvs24]

For housing, the request for the OA reserved amount needs to be given to CPFB before 55:
https://www.cpf.gov.sg/member/faq/h...ing-55-years-old-can-i-continue-to-use-my-cpf

Anyway RSTU monies cannot be withdrawn under PEA lump sum or BRS (property pledge).

Is VC to 3 accounts then transfer from OA to RA considered as RSTU ?

 

[zoneguard]

Is VC to 3 accounts then transfer from OA to RA considered as RSTU ?

1st leg is VC.

2nd leg is RSTU and you cannot do OA to RA transfer for self - SA will be drawn before OA for self. You have to do a spousal OA to RA transfer.
https://www.cpf.gov.sg/member/faq/g...i-am-55-and-would-like-to-make-a-cpf-transfer

 

[BBCWatcher]

I guess the basic question is not whether adding cash to your Retirement Account increases Retirement Account lump sum withdrawal liquidity (answer: no) but whether adding cash destroys or reduces any such liquidity you already have. The answer to the second question also seems to be no, but I would clarify that point with the CPFB directly.

Note that you may be able to perform cross-spousal transfers instead of using cash, if you wish. Spouse A transfers his/her OA dollars into Spouse B's RA, and vice versa. This approach is better than tapping your own accounts if you have some SA dollars since those SA dollars earn 4% interest. However, there's no tax relief granted for such transfers -- but that might not matter since cash top ups might not qualify either, depending on your situation. Also, I wouldn't do this (transfers) if you have $1 million sitting at POSB earning 0.2% interest or whatever. OA at 2.5% is still pretty great.

 

[BBCWatcher]

If you're starting with cash and want it to end up in RA, just put it in RA directly. I can't think of any good reason why you'd shuffle that cash through your other accounts on the way — and I can easily think of disadvantages in doing it that way.

 

[vsvs24]

I will turn 55 end of this month. Not working and want to have liquidity because don't want to be caught in situation of not enough money before 65 (have health problem).

Plan is :

1. Do VC to all 3 accounts 1 week before 55 by paynow
2. After VC is updated, immediately will do SA shield (before 3pm).
3. After RA is created, will withdraw some money from OA and ask for payment by paynow .
4. Top up RA by x sum by transfer from OA to RA.
5. Unshield SA before 3pm (to catch return of money in the same month)
6. Every year withdraw interest only. But if not enough then will touch capital (I know SA first).
7. At 65, will do lump sum withdrawal and also start CPF life payout.

Does this sound right ?

 

[zoneguard]

Plan is :

1. Do VC to all 3 accounts 1 week before 55 by paynow
2. After VC is updated, immediately will do SA shield (before 3pm).
3. After RA is created, will withdraw some money from OA and ask for payment by paynow .
4. Top up RA by x sum by transfer from OA to RA.
5. Unshield SA before 3pm (to catch return of money in the same month)
6. Every year withdraw interest only. But if not enough then will touch capital (I know SA first).
7. At 65, will do lump sum withdrawal and also start CPF life payout.

3 and 4 are not necessary. The whole point of SA shielding is for FRS in RA to be formed from OA monies / cash rather than SA monies. CPFB will do this for you assuming OA has sufficient funds to meet the FRS requirement.

The shielding and unshielding take T+3 (out)/T+4 days(in) to effect for given leg so for those with birthdays late in a given month, too bad, you have to forfeit one month of 4%.

Do a dry run. Have you tested the sequence with a small value ( the minimum the broker will accept) for the given UT fund? Have you ever transacted with the given broker for CPFIS-SA?

 

[a4973]

I will turn 55 end of this month. Not working and want to have liquidity because don't want to be caught in situation of not enough money before 65 (have health problem).

Plan is :

1. Do VC to all 3 accounts 1 week before 55 by paynow
2. After VC is updated, immediately will do SA shield (before 3pm).
3. After RA is created, will withdraw some money from OA and ask for payment by paynow .
4. Top up RA by x sum by transfer from OA to RA.
5. Unshield SA before 3pm (to catch return of money in the same month)
6. Every year withdraw interest only. But if not enough then will touch capital (I know SA first).
7. At 65, will do lump sum withdrawal and also start CPF life payout.

Does this sound right ?

for point 2 & 5 , wonder what is the significance for stating (before 3 pm) ?

 

[a4973]

3 and 4 are not necessary. The whole point of SA shielding is for FRS in RA to be formed from OA monies / cash rather than SA monies. CPFB will do this for you assuming OA has sufficient funds to meet the FRS requirement.

The shielding and unshielding take T+3 (out)/T+4 days(in) to effect for given leg so for those with birthdays late in a given month, too bad, you have to forfeit one month of 4%.

Do a dry run. Have you tested the sequence with a small value ( the minimum the broker will accept) for the given UT fund? Have you ever transacted with the given broker for CPFIS-SA?

for point 3 i believe poster wants to withdraw some cash from OA while SA still shielded.

 

[zoneguard]

for point 2 & 5 , wonder what is the significance for stating (before 3 pm) ?

Dealing cut-off time by UT distributor/broker.

 

[vsvs24]

3 and 4 are not necessary. The whole point of SA shielding is for FRS in RA to be formed from OA monies / cash rather than SA monies. CPFB will do this for you assuming OA has sufficient funds to meet the FRS requirement.

The shielding and unshielding take T+3 (out)/T+4 days(in) to effect for given leg so for those with birthdays late in a given month, too bad, you have to forfeit one month of 4%.

Do a dry run. Have you tested the sequence with a small value ( the minimum the broker will accept) for the given UT fund? Have you ever transacted with the given broker for CPFIS-SA?

3 is to withdraw for some spending money from OA because after unshield SA if I withdraw it will take from SA.

4 is because I plan to withdraw 20% cash from RA at age 65 if needed. So I am thinking of transferring some from OA to RA so that after withdrawal it does not affect payout so much. I have a lot more in OA than SA.

I have done a dry run using $100 from SA in Dec using FSMone. Can make it back in time if there is no delay in 3 and 4. These are the only 2 steps that I could not test to see how long it takes. If they are immediate, then no issue.

 

[zoneguard]

I have done a dry run using $100 from SA in Dec using FSMone. Can make it back in time if there is no delay in 3 and 4. These are the only 2 steps that I could not test to see how long it takes. If they are immediate, then no issue.

3 should be immediate since it is PayNow. You should have enabled the bank's Paynow limit for the amount you intend to withdraw.

As for 4, I'm not sure RA is a good source of liquidity at 65 given the impact on LIFE payout. There's another way to tap the OA liquidity ahead of SA by using CPFIS-OA.

 

[vsvs24]

3 should be immediate since it is PayNow. You should have enabled the bank's Paynow limit for the amount you intend to withdraw.

As for 4, I'm not sure RA is a good source of liquidity at 65 given the impact on LIFE payout. There's another way to tap the OA liquidity ahead of SA by using CPFIS-OA.

How to use CPFIS-OA to tap OA liquidity ?

I have 3 counters bought using OA. Not sure if need to do anything at 55.

 

[zoneguard]

How to use CPFIS-OA to tap OA liquidity ?

Close the CPFIS-OA account and either transfer the holdings to CDP or sell for cash.