cpf vc after 65

[Nesplex]

I see. Thanks a lot!

 

[SBC]

Was wondering how did the 2.97% come from?

This is the blended interest rate for VC when one had crossed FRS.
Simply from the CPF allocation ratio among the 3 accounts.

 

[henrylbh]

This is the blended interest rate for VC when one had crossed FRS.
Simply from the CPF allocation ratio among the 3 accounts.

When one had crossed FRS? If not?

 

[SBC]

When one had crossed FRS? If not?

If din cross FRS, for age group 50 to 55, VC average interest is at 3.39%.

For this reason, VC should be done at younger age.
Regretted I had not done this during my younger days.

Now is near to 50.

 

[henrylbh]

If din cross FRS, for age group 50 to 55, VC average interest is at 3.39%.

For this reason, VC should be done at younger age.
Regretted I had not done this during my younger days.

Now is near to 50.

Shouldn't it be crossed age 55 rather than crossed FRS?

 

[lifeafter41]

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

Yes, I just took a quick look into CPF site, the allocation rate into SA is the highest between 50 to 55, at 0.3108 (SA), 0.4055 (OA) and 0.2837 (MA)

 

[celtosaxon]

the allocation rate into SA is the highest between 50 to 55

That is an important point, if you’re already past FRS and looking to beef up your SA before shielding.

 

[henrylbh]

That is an important point, if you’re already past FRS and looking to beef up your SA before shielding.

If one is looking to beef up SA before shielding, one should VC to the max at every opportunity and not wait till that point where allocation to SA is the highest.

 

[celtosaxon]

If one is looking to beef up SA before shielding, one should VC to the max at every opportunity and not wait till that point where allocation to SA is the highest.

True, but I wonder how may young people can be convinced of this?

 

[BBCWatcher]

"All three account" Voluntary Contributions (VCs) are less attractive in yield/interest rate terms, and usually also in tax relief terms for employed individuals, compared to directed MediSave and Special Account contributions/top ups. Wouldn't it make sense to start with the generally more attractive options first?

 

[celtosaxon]

"All three account" Voluntary Contributions (VCs) are less attractive in yield/interest rate terms, and usually also in tax relief terms for employed individuals, compared to directed MediSave and Special Account contributions/top ups. Wouldn't it make sense to start with the generally more attractive options first?

Yes, it almost reads like a CPF playbook doesn’t it? At least for your own account, do the $7k RSTU until FRS, do the maximum allowable MA top-ups until BHS (plus any other MA top-ups you can), and then do the “all three” VC up to the max from there. Even though there is usually no tax relief for that last one, it could still be more attractive than SRS, with the high % yield, future tax free withdrawals, with an earlier unlock at 55.

Not sure if I’ll ever convince my wife of all this. So far it’s still 100% no... she hates money being locked up in anything.

 

[nautilus]

Yes, it almost reads like a CPF playbook doesn’t it? At least for your own account, do the $7k RSTU until FRS, do the maximum allowable MA top-ups until BHS (plus any other MA top-ups you can), and then do the “all three” VC up to the max from there. Even though there is usually no tax relief for that last one, it could still be more attractive than SRS, with the high % yield, future tax free withdrawals, with an earlier unlock at 55.

Not sure if I’ll ever convince my wife of all this. So far it’s still 100% no... she hates money being locked up in anything.

Perhaps you could come up with a table to illustrate the projected returns and tax savings until you retire so that she can see it as a longer term plan?