cpf vc after 65

[dork32]

are we still allowed to do vc after 65?

my idea is this. i dont forsee myself needing the cpf life payout at 65. garmen is forcing me take the money out. instead of letting the money rot in dbs savings, i can do a vc back to my 3 accounts. yes, i will be earning just 2.5% in the OA instead of 4,5 or 6% in the ra.

 

[BBCWatcher]

are we still allowed to do vc after 65?

Yes, in several ways:

1. Starting on your 55th birthday, you can make voluntary contributions to your Retirement Account, up to the Enhanced Retirement Sum (ERS).

2. You can make voluntary contributions to your Medisave Account at any age, but those contributions must live within two limits: the CPF Annual Limit (currently $37,740) and the Basic Healthcare Sum (BHS, which will be $54,500 in 2018).

3. You can make "all 3 account" voluntary top-ups, again subject to the CPF Annual Limit. Exactly how those funds get allocated to your sub-accounts depends on your circumstances. For example, if your Medisave Account is already at the BHS, then the portion of your "all 3" top-up normally allocated to MA will spill over into another subaccount. (And above 65 the MA portion is 84%, so there's a lot of potential spillover available.)

Yes, this is quite strange. Essentially you can deposit up to $37,740 every year in a 2.5+% on demand savings account, assuming you've already topped out your restricted funds (MA and CPF LIFE). Well played if you can do that.

4. You can top up any CPF member's account(s), subject to the recipient's applicable limits at his/her age.

my idea is this. i dont forsee myself needing the cpf life payout at 65. garmen is forcing me take the money out.

No, that's incorrect. You can delay your CPF LIFE payout start date to age 70. And you should if you don't need the money and are in at least reasonably good health. Only CPF LIFE payouts must start at age 70. Your other CPF funds can stay in place as long as you want, for your lifetime and even a bit beyond.

One exception: MediShield Life and (if applicable) Integrated Shield base plan premiums must be deducted from somebody's Medisave Account, up to the withdrawal limit for your age. Your Medisave or "all 3" contributions can/will replenish those funds. You are not required to spend Medisave funds otherwise. It's generally a good idea for the CPF member in the household who's in the highest tax bracket to assume MediShield Life/Integrated Shield premiums for the whole household, in order to maximize tax relief. Or, alternatively, somebody with a zero Medisave balance can assume those premiums, and then they can be paid in cash.

If you cannot find anything to spend those age 70+ CPF LIFE dollars on, no problem. Just send the money to me, and that will solve your problem.

Is this a "CPF hack"? Yes. Assuming you max out Medisave and participate in CPF LIFE at least at FRS level, starting from age 55 you're allowed to deposit up to $37,740 per year (including compulsory contributions, if any) into the equivalent of an "on demand" savings account earning 2.5+% interest. That's a great deal, and congratulations if you're able to do that. If you're approaching age 55 -- even years away -- then this aspect of CPF is better than a fixed deposit, SSB, or even medium term bond. So yeah, go for it.

 

[dork32]

Yes, in several ways:

1. Starting on your 55th birthday, you can make voluntary contributions to your Retirement Account, up to the Enhanced Retirement Sum (ERS).

2. You can make voluntary contributions to your Medisave Account at any age, but those contributions must live within two limits: the CPF Annual Limit (currently $37,740) and the Basic Healthcare Sum (BHS, which will be $54,500 in 2018).

3. You can make "all 3 account" voluntary top-ups, again subject to the CPF Annual Limit. Exactly how those funds get allocated to your sub-accounts depends on your circumstances. For example, if your Medisave Account is already at the BHS, then the portion of your "all 3" top-up normally allocated to MA will spill over into another subaccount. (And above 65 the MA portion is 84%, so there's a lot of potential spillover available.)

Yes, this is quite strange. Essentially you can deposit up to $37,740 every year in a 2.5+% on demand savings account, assuming you've already topped out your restricted funds (MA and CPF LIFE). Well played if you can do that.

4. You can top up any CPF member's account(s), subject to the recipient's applicable limits at his/her age.


No, that's incorrect. You can delay your CPF LIFE payout start date to age 70. And you should if you don't need the money and are in at least reasonably good health. Only CPF LIFE payouts must start at age 70. Your other CPF funds can stay in place as long as you want, for your lifetime and even a bit beyond.

One exception: MediShield Life and (if applicable) Integrated Shield base plan premiums must be deducted from somebody's Medisave Account, up to the withdrawal limit for your age. Your Medisave or "all 3" contributions can/will replenish those funds. You are not required to spend Medisave funds otherwise. It's generally a good idea for the CPF member in the household who's in the highest tax bracket to assume MediShield Life/Integrated Shield premiums for the whole household, in order to maximize tax relief. Or, alternatively, somebody with a zero Medisave balance can assume those premiums, and then they can be paid in cash.

If you cannot find anything to spend those age 70+ CPF LIFE dollars on, no problem. Just send the money to me, and that will solve your problem.

Is this a "CPF hack"? Yes. Assuming you max out Medisave and participate in CPF LIFE at least at FRS level, starting from age 55 you're allowed to deposit up to $37,740 per year (including compulsory contributions, if any) into the equivalent of an "on demand" savings account earning 2.5+% interest. That's a great deal, and congratulations if you're able to do that. If you're approaching age 55 -- even years away -- then this aspect of CPF is better than a fixed deposit, SSB, or even medium term bond. So yeah, go for it.

1. i am not putting anything into retirement account. i am a brs guy.

2 and 3. my ma has been on the ceiling for a long time already. everything will spill over to sa and oa.

4. no, garmen is forcing me to draw the money. the later i start drawing, the older it will take for me to break even. i want to break even as quickly as possible.

5. you are right that i will be effectively topping my ma with my ra. the medishield life premium for a local uncle is 500+ per year. it is going to go up to 800+. at brs, my payout is 600+. it is sufficient to cover the the premium.

the main reason is i dont want my money to be stuck in ra. i prefer it to stay liquid in oa

 

[BBCWatcher]

i am a brs guy.

I don't think this particular CPF hack works much (or at all) below FRS-level CPF LIFE.

How valuable is a 2.5+ percent yielding Singapore tax free age 55+ on demand piggybank that accepts up to $37,740/year in fresh funds? Quite valuable, I'd say -- valuable enough to reconsider your BRS-level CPF LIFE thinking.

If you want to play the game, play the game.

4. no, garmen is forcing me to draw the money. the later i start drawing, the older it will take for me to break even. i want to break even as quickly as possible.

No way -- that's all wrong, I disagree. The financial math is quite excellent if you can afford to defer. (You're also deferring bequest residuals.)

at brs, my payout is 600+. it is sufficient to cover the the premium.

MediShield Life/Integrated Shield base plan premiums must be withdrawn (up to the withdrawal limit) from Medisave -- attempted to be withdrawn, anyway. You only get the cash payment option after a Medisave withdrawal attempt, from somebody's Medisave Account, fails (or is only partially successful). So you have to keep your MA topped up for this hack to work best, or you have to find somebody with a zero MA balance to assume premiums.

the main reason is i dont want my money to be stuck in ra. i prefer it to stay liquid in oa

No, what you really want is residual (and even growing, if possible) SA at age 55+, since that's earning 4+% and is also on demand. Hint: Convert OA to SA, if you still can, no later than the day before your 55th birthday.

 

[dork32]

I don't think this particular CPF hack works much (or at all) below FRS-level CPF LIFE.

How valuable is a 2.5+ percent yielding Singapore tax free age 55+ on demand piggybank that accepts up to $37,740/year in fresh funds? Quite valuable, I'd say -- valuable enough to reconsider your BRS-level CPF LIFE thinking.

If you want to play the game, play the game.


No way -- that's all wrong, I disagree. The financial math is quite excellent if you can afford to defer. (You're also deferring bequest residuals.)


MediShield Life/Integrated Shield base plan premiums must be withdrawn (up to the withdrawal limit) from Medisave -- attempted to be withdrawn, anyway. You only get the cash payment option after a Medisave withdrawal attempt, from somebody's Medisave Account, fails (or is only partially successful). So you have to keep your MA topped up for this hack to work best, or you have to find somebody with a zero MA balance to assume premiums.


No, what you really want is residual (and even growing, if possible) SA at age 55+, since that's earning 4+% and is also on demand. Hint: Convert OA to SA, if you still can, no later than the day before your 55th birthday.

i am a brs guy means, i am going for brs. at the moment, i have more than ers in the account. yes this hack works for me.

if i start the payout earlier, it means that my ra is going to hit 0 earlier, when my ra hits 0, i start to leech on other people. when i leech enough, i get to make profit from the leeching. the money that i withdraw is ploughed back into my OA, which can be given to my hair as well. and if i cannot die, i continue to leech on others and the money continued to be transferred into the oa/sa to be kept for my hair.

you are right that after 55, sa is just as good as oa. but the problem is that you cannot top up sa anymore after 55. even the amount you top up the sa before 55 is stucked and have to go into the ra. i want to keep my ra at brs

 

[henrylbh]

are we still allowed to do vc after 65?

my idea is this. i dont forsee myself needing the cpf life payout at 65. garmen is forcing me take the money out. instead of letting the money rot in dbs savings, i can do a vc back to my 3 accounts. yes, i will be earning just 2.5% in the OA instead of 4,5 or 6% in the ra.

Can do VC to any age. By then the bulk of VC will go into OA assuming you meet the then prevailing BHS limit which will be fixed at age 65 for life. Consequently, interest from MA will flow into OA.

Since you keen to keep as little in RA for BRS, go find out how you can lower it as I remember at 65, one is allowed to withdraw 20% of RA.

 

[BBCWatcher]

you are right that after 55, sa is just as good as oa. but the problem is that you cannot top up sa anymore after 55.

Compulsory contributions can still flow in, and to a degree you control that, primarily via your decision when to retire (or semi-retire).

 

[dork32]

Compulsory contributions can still flow in, and to a degree you control that, primarily via your decision when to retire (or semi-retire).

only 8% goes to sa. 8% of 40k is just 3200. depositing 3200 into sa at 4% is not much.
but depositing 30k into oa at 2.5% is significant.

 

[BBCWatcher]

only 8% goes to sa.

Whatever the percentage is (it varies by age), it's never zero. Unless you've got a physical or mental inability to work, you get to make this decision -- it's within your control.

 

[henrylbh]

only 8% goes to sa. 8% of 40k is just 3200. depositing 3200 into sa at 4% is not much.
but depositing 30k into oa at 2.5% is significant.

8% of VC from 65 is really not much, but it's still a bonus if you have stopped work and making use of CPF as savings accounts.

 

[Nesplex]

Assuming a male who is turning 65yo this year, has maxed out MA to BHS and RA has exceeded the ERS, can he still do a yearly VC of up to $37,740? If yes, does the VC money go into his OA or SA, and is this money liquid or illiquid?

Thanks for any advice!

 

[henrylbh]

Assuming a male who is turning 65yo this year, has maxed out MA to BHS and RA has exceeded the ERS, can he still do a yearly VC of up to $37,740? If yes, does the VC money go into his OA or SA, and is this money liquid or illiquid?

Thanks for any advice!

Not giving advice. Of course can VC at any age, subject to limit annual limit.

VC will be allocated to OA, SA and MA according to allocation table and age group. MA will overflow into OA since BHS has been fixed at 65. And since RA has met FRS, any money in OA and SA becomes like an ATM.

Can also top up RA whenever FRS increases.

 

[SBC]

Between 50 & 55 is good timing to do VC, if still employed.

 

[lifeafter41]

Between 50 & 55 is good timing to do VC, if still employed.

Moi think 55 to 60 and even 60 to 65 if one financial situation allows.
Cos the regular contribution will be reduced from 55 onwards and further reduce from 60 onwards.

Subject to the annual limit.

 

[CaptainTeo]

Dividend warrior here? I want to meet him for advice

 

[celtosaxon]

Between 50 & 55 is good timing to do VC, if still employed.

What if not employed?

 

[SBC]

What if not employed?

Average interest for VC during this age group is 2.97%.

If depends if ones is having extra saving and having other investment method at gain higher than this rate.

If this period, need to support kids for U education, this may not be feasible.

 

[Nesplex]

Not giving advice. Of course can VC at any age, subject to limit annual limit.

VC will be allocated to OA, SA and MA according to allocation table and age group. MA will overflow into OA since BHS has been fixed at 65. And since RA has met FRS, any money in OA and SA becomes like an ATM.

Can also top up RA whenever FRS increases.

Given that OA and SA are both zero, shouldn’t the excess MA money overflow into SA instead of OA?

 

[reddevil0728]

Given that OA and SA are both zero, shouldn’t the excess MA money overflow into SA instead of OA?

 

[lifeafter41]

Average interest for VC during this age group is 2.97%.

If depends if ones is having extra saving and having other investment method at gain higher than this rate.

If this period, need to support kids for U education, this may not be feasible.

Was wondering how did the 2.97% come from?