CPF Top up questions

[BBCWatcher]

OK then, to summarize, definitely NOT crazy. Thanks for rechecking the basic facts of the situation, folks.

 

[BBCWatcher]

if you have frs at 48, not working, your cpf is not liquid at 55

That's not correct. Henry is correct on this point. After a S$41K Special Account top up now, and assuming little or no previous top ups, tens of thousands of dollars will be (highly preferably optionally) available for withdrawal at age 55 or thereafter, with a sufficient property pledge or charge. The exact figure will depend on the evolution of the Basic Retirement Sum and Full Retirement Sum. The BRS and FRS figures are now known through 2022, but past that we don't know the precise figures yet.

 

[henrylbh]

That's not correct. Henry is correct on this point. After a S$41K Special Account top up now, and assuming little or no previous top ups, tens of thousands of dollars will be (highly preferably optionally) available for withdrawal at age 55 or thereafter, with a sufficient property pledge or charge. The exact figure will depend on the evolution of the Basic Retirement Sum and Full Retirement Sum. The BRS and FRS figures are now known through 2022, but past that we don't know the precise figures yet.

Don't pull me in to support, with a twist, that 'After a S$41K Special Account top up now, and assuming little or no previous top ups, tens of thousands of dollars will be (highly preferably optionally) available for withdrawal at age 55 or thereafter, with a sufficient property pledge or charge'

With or without top-up, he would still be able to with that tens of thousands of dollars that you mentioned With top-up, it will be stuck with life payout.

 

[BBCWatcher]

Don't pull me in to support, with a twist....

Henry, it's literally what you wrote:

If you top up to the prevailing max FRS, the max you can withdraw at 55 is amount in excess of prevailing BRS less cash top ups with sufficient property pledge/charge.

Example, if you top up 41k to SA (FRS limit), at 55 you can only withdraw 181k - 90.5k (BRS) - 41k = 49,5k.

With or without top-up, he would still be able to with that tens of thousands of dollars that you mentioned

Yes, exactly! There's no liquidity problem either way, now and at age 55+, so topping up is an excellent idea, certainly NOT crazy.

 

[henrylbh]

After a S$41K Special Account top up now, and assuming little or no previous top ups, tens of thousands of dollars will be (highly preferably optionally) available for withdrawal at age 55 or thereafter, with a sufficient property pledge or charge.

The twist is saying 'After a S$41k SA top up now, ...... ten of thousands of dollars will be available for withdrawal .......' Not crazy, but rubbish

What I said is IF he top ups, the withdrawal based on my example is $49.5k. But without top-up, he also would be able to withdraw $49.5k. Catch no ball?

So where is the ten of thousands with top-up? The top-up would only be stuck with CPF Life.

 

[BBCWatcher]

Henry, you made the correct observation that a great deal of money will (optionally) be available for withdrawal at age 55+, with a top up. That’s what you wrote, the example you provided. You now want to argue with yourself? This particular point you made is factually correct.

I notice you still haven’t provided any better suggestion for how a relatively cash and HDB leasehold rich, but retirement income security poor, unemployed, 48 year old manages his finances going forward. You’re not being helpful to Bluestoneman. If you have any better suggestions, then post them, now. Bluestoneman has important decisions to make, and you’re wasting everyone’s time now, again.

 

[henrylbh]

Henry, you made the correct observation that a great deal of money will (optionally) be available for withdrawal at age 55+, with a top up. That’s what you wrote, the example you provided. You now want to argue with yourself? This particular point you made is factually correct.

I notice you still haven’t provided any better suggestion for how a relatively cash and HDB leasehold rich, but retirement income security poor, unemployed, 48 year old manages his finances going forward. You’re not being helpful to Bluestoneman. If you have any better suggestions, then post them, now. Bluestoneman has important decisions to make, and you’re wasting everyone’s time now, again.

I response one last time since you keep twisting that I said a great deal of money is withdrawable ..... with top-up

Must I also repeat that without top-up, there is also a great deal of money withdrawable if that's what you want to say? The example I gave I deliberately left out the calculation that without top-up, he can still withdraw the same amount of 49.5k and it's not me describing it as a great deal of money or ten of thousands.

And must I repeat that I will not give advice without knowing his situation or asking him for more info? In responding to my laying the rules, you can say I wasting your time if you like

 

[BBCWatcher]

I response one last time since you keep twisting that I said a great deal of money is withdrawable ..... with top-up

Must I also repeat that without top-up, there is also a great deal of money withdrawable if that's what you want to say?

Yes, I already stated that, and so did you, repeatedly. Either way Bluestoneman will have lots of age 55+ CPF liquidity, tens of thousands of dollars worth. Now could you please move on and stop wasting everyone's time? It'd be nice if you provide a helpful, actionable suggestion to help Bluestoneman in his time of need since you clearly didn't like the idea that he top up his Special Account. You called that idea "crazy."

And must I repeat that I will not give advice without knowing his situation or asking him for more info?

No, you already provided advice. You clearly advised Bluestoneman NOT to top up his Special Account. You called the very idea "crazy." Are you now retracting your characterization of Bluestoneman making a Special Account top up as "crazy"?

Either own the "crazy" advice you gave (and explain why), or, if you don't want to provide any advice to Bluestoneman, retract it. Bluestoneman has financial decisions to make, and doing nothing (inertia) is also one possible decision. If Bluestoneman doesn't top up his Special Account for crediting this month (February, 2020), then he will lose, forever, the higher interest for March, 2020, at least. Financial decisions have real consequences, including that one. I'm certainly mindful of this fact.

 

[tangent314]

Alright cut it, both of you. I will be infracting any new posts after this that continues this nonsense.

Bluestoneman's query has been answered. There shall be no more discussion about that until he asks a new one.

 

[Bluestoneman]

if you have frs at 48, not working, your cpf is not liquid at 55

Sorry...what does this mean? I am having a hard time digesting all the talks here

 

[Bluestoneman]

Thank you for all the input here. I am having a hard time digesting all these info lol. I am not very good with finance.

 

[tangent314]

Ok, let's go back to your original query

Hi guys,
OA $0
SA $140K
MA $30K
Bank savings $350k
Property 5 room

I am 48 years old. Does it make sense to top up $200k into my SA with my cash savings to earn the interest? Can I withdraw my remaining SA after setting FRS aside at age 55? Appreciate if someone can shed some light ! Thank you!!

First of all, you cannot top up $200k into your SA. The most you can top up directly into your RA this year is $41k to bring yourself up to the FRS cap of $181k.

Since the SA interest grows faster than the increase in FRS, when you reach 55, your SA will be higher than the FRS, so once the FRS amount is moved from your SA to your RA (assuming you don't shield your SA), anything remaining in your SA can be withdrawn.

You might want to look into doing a Voluntary Contribution as well allowing you to top up (up to $37740 per year) directly into your MA (up to the BHS currently $60k), or into a combination of OA+SA+MA where the ratio depends on your age.

You generally put money directly into your OA unless you have previously taken out your OA to pay for your housing, in which case you are allowed to refund of CPF OA money taken out back into your OA.

***

Generally it does make sense to top up your SA and MA to max to prepare for retirement. But it would help us give you better advice if you let us know what your plans and intentions are. Do you intend to stop working for the rest of your life and to live on whatever you have remaining? That is certainly possible, we can probably calculate for you how much you can expect to safely spend until CPF Life kicks in, so you won't ever run out of money.

 

[henrylbh]

Ok, let's go back to your original query

Hi guys,
OA $0
SA $140K
MA $30K
Bank savings $350k
Property 5 room

I am 48 years old. Does it make sense to top up $200k into my SA with my cash savings to earn the interest? Can I withdraw my remaining SA after setting FRS aside at age 55? Appreciate if someone can shed some light ! Thank you!!

First of all, you cannot top up $200k into your SA. The most you can top up directly into your RA this year is $41k to bring yourself up to the FRS cap of $181k.

Since the SA interest grows faster than the increase in FRS, when you reach 55, your SA will be higher than the FRS, so once the FRS amount is moved from your SA to your RA (assuming you don't shield your SA), anything remaining in your SA can be withdrawn.

You might want to look into doing a Voluntary Contribution as well allowing you to top up (up to $37740 per year) directly into your MA (up to the BHS currently $60k), or into a combination of OA+SA+MA where the ratio depends on your age.

You generally put money directly into your OA unless you have previously taken out your OA to pay for your housing, in which case you are allowed to refund of CPF OA money taken out back into your OA.

***

Generally it does make sense to top up your SA and MA to max to prepare for retirement. But it would help us give you better advice if you let us know what your plans and intentions are. Do you intend to stop working for the rest of your life and to live on whatever you have remaining? That is certainly possible, we can probably calculate for you how much you can expect to safely spend until CPF Life kicks in, so you won't ever run out of money.

What is there to go back to Bluestoneman's original quote above

Bluestoneman's query has been answered.

 

[dork32]

Sorry...what does this mean? I am having a hard time digesting all the talks here

if you have frs at 48, and not working, your cpf will increase slowly. frs is also increasing every year.
by the time you are 55, your cpf probably have a little bit more than frs.

the bulk of your cpf will form your ra. this is not liquid. only a small portion, above your frs can be withdrawn

 

[henrylbh]

Thank you for all the input here. I am having a hard time digesting all these info lol. I am not very good with finance.

You need to know what you are going to do with FD of 350k and how you going to spend it over your remaining years or pass it to your offsprings.

It's a sin leaving the money in FDs over a long long period just for the song song feeling

 

[tangent314]

Whatever is transferred into SA or RA under the RSTU scheme must remain in your RA on top of the BRS sum. Interest earned in RA also cannot be withdrawn.

https://www.cpf.gov.sg/members/FAQ/...ent Sum Scheme&folderid=12567&ajfaqid=2188693

 

[henrylbh]

A question. Let's say I tranfer $160k from OA to SA to hit FRS.

When I'm 55, this 160k + compound interest generated out of it. Can they be withdrawn? If I pledge my property, that is.

I also have the same question for those I uses cash to top up..

Whatever is transferred into SA or RA under the RSTU scheme must remain in your RA on top of the BRS sum. Interest earned in RA also cannot be withdrawn.

https://www.cpf.gov.sg/members/FAQ/...ent Sum Scheme&folderid=12567&ajfaqid=2188693

I don't think what you said as well as the web link answer his question fully.

 

[henrylbh]

So to say, this $160k (+ future compound interest) which i transferred to Special Account now either via cash or via OA to SA, (even though i meet FRS) I will not be able to withdraw the sum above FRS at 55. Am i right?

Does not matter what or where the money comes from. As long as you have FRS in SA at 55, whatever balance (except MA) can be withdrawn anytime therefrom.

 

[tangent314]

So to say, this $160k (+ future compound interest) which i transferred to Special Account now either via cash or via OA to SA, (even though i meet FRS) I will not be able to withdraw the sum above FRS at 55. Am i right?

The sum above the FRS does not go into your RA. It will remain in OA/SA. Those you can withdraw because the restriction only applies to the amount in RA.

You will of course not be able to withdraw from RA even if you make a property pledge since your RSTU amount is higher than the difference between BRS and FRS.

 

[peppermint7]

Does not matter what or where the money comes from. As long as you have FRS in SA at 55, whatever balance (except MA) can be withdrawn anytime therefrom.

Ohh thanks thanks!