From OA to SA

[lls0101]

Firstly, did u use CPF for housing previously ??

I think you missed my earlier point.

The strategy is that you don't wanna top up to SA directly as any funds which are topped up to SA will be locked in after 55, except the portion which is above the FRS. The rationale is that in future, if you need to do further lump sum withdrawal, you can at least take advantage of the BRS scheme by using the 2 step method of:

1. Transfer OA to SA
2. Do capital repayment to OA.

If you top up directly to SA, monies used under this cannot be taken out under the BRS option.

Hope this is clear.

Why is there a need to do capital repayment to OA? The accrued interest don't affect us if we don't intend to sell the house, right? Why is there a need to lock up the money in OA? Unless doing pledge of BRS require us to pay back the accrued interest?

I actually don't really bother about the accrued interest now since I do not foresee any chance of me selling away my current home...

(But if the person is near 55, then it can be considered since it is for short term and the rates is better than the fixed deposit out there )

 

[apatheticme]

Surprised to know that there are sequence of sources of the CPF fund for the purpose of withdrawal !!

Is it meant for CPF internal? Transparent to CPF members?

What do you mean by transparent? It will affect any CPF member looking to do a partial withdrawal of OA/SA at 55 and beyond.

 

[henrylbh]

Is it meant for CPF internal? Transparent to CPF members?

For the time being it doen't affect or concern you and just because you not aware, you think it's not transparent?

 

[badsector]

Why is there a need to do capital repayment to OA? The accrued interest don't affect us if we don't intend to sell the house, right? Why is there a need to lock up the money in OA? Unless doing pledge of BRS require us to pay back the accrued interest?

I actually don't really bother about the accrued interest now since I do not foresee any chance of me selling away my current home...

(But if the person is near 55, then it can be considered since it is for short term and the rates is better than the fixed deposit out there )

elnewbie was mainly giving an option for ppl who wish to park more money into their OA.

need or not u decide urself loh.

 

[henrylbh]

elnewbie was mainly giving an option for ppl who wish to park more money into their OA.

need or not u decide urself loh.

Generally, it's better to make voluntary contribution (within annual cpf limit) before refunding housing loan to CPF as part of VC would go into MA and SA with higher interest and if MA reaches BHS, it will overflow into OA/SA.

 

[elnewbie]

You need to read TS entire post. He has spare cash and wants to know how to maximize it. Thus the option is to do capital repayment to OA in order to get 2.5%.

Why is there a need to do capital repayment to OA? The accrued interest don't affect us if we don't intend to sell the house, right? Why is there a need to lock up the money in OA? Unless doing pledge of BRS require us to pay back the accrued interest?

I actually don't really bother about the accrued interest now since I do not foresee any chance of me selling away my current home...

(But if the person is near 55, then it can be considered since it is for short term and the rates is better than the fixed deposit out there )

 

[endlssorrow]

How come can only do at AXS machine and not by online website or axs mobile apps?

 

[lls0101]

You need to read TS entire post. He has spare cash and wants to know how to maximize it. Thus the option is to do capital repayment to OA in order to get 2.5%.

Noted... Just saw he trying the find a better interest rate for the money in his CIMB bank.

Since he is 50, then I guess its ok with the withdrawal age being so near.

 

[henrylbh]

really appreciate the focus you guys are giving.
but back to my initial point is that as my cash on hand are performing poorly in CIMB 1% & 0.8% accounts, i am more keen on using cash to top up my SA rather than using my OA to top up SA.

As you are not far from 55, you should focus on maximising your SA to well above the limit of FRS so that at 55 you can have substantial balance in SA, after an amount is transferred to RA to meet FRS.

The balance in SA after meeting FRS will continue to earn 4% (for the time being) and the principal and or interest thereon is withdrawable partially or fully any time as you wish, not counting the interest on OA, if you still have balance in OA.

Possible to live on annual interest from SA and OA?

To achieve that, transfer OA to SA to max of 166k now (in fact the earlier the better for retirement planning, if one has no other ideas). As it stands now, the annual interest is more than enough to meet the increase in FRS each year. In other words, SA will out grow FRS amount and the gap will just get wider each passing year.

It will even be wider if you are still working as contribution will still go into SA. And if you have not met the cpf annual limit, make VC which will partly flow to SA.

 

[a4973]

As you are not far from 55, you should focus on maximising your SA to well above the limit of FRS so that at 55 you can have substantial balance in SA, after an amount is transferred to RA to meet FRS.

The balance in SA after meeting FRS will continue to earn 4% (for the time being) and the principal and or interest thereon is withdrawable partially or fully any time as you wish, not counting the interest on OA, if you still have balance in OA.

Possible to live on annual interest from SA and OA?

To achieve that, transfer OA to SA to max of 166k now (in fact the earlier the better for retirement planning, if one has no other ideas). As it stands now, the annual interest is more than enough to meet the increase in FRS each year. In other words, SA will out grow FRS amount and the gap will just get wider each passing year.

It will even be wider if you are still working as contribution will still go into SA. And if you have not met the cpf annual limit, make VC which will partly flow to SA.

hi there
yes, as of this morning's post i have maxed out OA to SA now standing at 166k.
so guess the general consensus for my situation is to then repay capital to OA?
thereafter continue to monitor SA & top up according to next & following year's FRS?

as i understand SA can't be topped up more than the current year's max which is 166k so how do i "you should focus on maximising your SA to well above the limit of FRS "?

 

[elnewbie]

The answer to your last question is to use the VC option assuming that your monthly income doesn't exceed $6k and annual bonus doesn't exceed $30k.

hi there
yes, as of this morning's post i have maxed out OA to SA now standing at 166k.
so guess the general consensus for my situation is to then repay capital to OA?
thereafter continue to monitor SA & top up according to next & following year's FRS?

as i understand SA can't be topped up more than the current year's max which is 166k so how do i "you should focus on maximising your SA to well above the limit of FRS "?

 

[a4973]

The answer to your last question is to use the VC option assuming that your monthly income doesn't exceed $6k and annual bonus doesn't exceed $30k.

and this is to be done after capital repayment to OA ?
just trying to get the sequence right in case make irreversible mistakes

 

[elnewbie]

If you are eligible for VC, VC should be prioritized as you get more than 2.5%. Capital repayment should be last option.

and this is to be done after capital repayment to OA ?
just trying to get the sequence right in case make irreversible mistakes

 

[a4973]

If you are eligible for VC, VC should be prioritized as you get more than 2.5%. Capital repayment should be last option.

Ok noted elnewbie, you all have been very helpful indeed

Sent from Motorola NEXUS 6 using GAGT

 

[endlssorrow]

Capital repayment Mean what ah?

Ok noted elnewbie, you all have been very helpful indeed

Sent from Motorola NEXUS 6 using GAGT

 

[SBC]

Good choice to consider SRS top up? Can have income tax saving & penalty-free withdrawal by 62.

 

[henrylbh]

Good choice to consider SRS top up? Can have income tax saving & penalty-free withdrawal by 62.

What you want to do with money in SRS is more important.

 

[elnewbie]

To repay, either partially or wholly, the OA money you had used for housing.

Capital repayment Mean what ah?

 

[edwinttt1978]

hi there
yes, as of this morning's post i have maxed out OA to SA now standing at 166k.
so guess the general consensus for my situation is to then repay capital to OA?
thereafter continue to monitor SA & top up according to next & following year's FRS?

as i understand SA can't be topped up more than the current year's max which is 166k so how do i "you should focus on maximising your SA to well above the limit of FRS "?

Congratulations for transferring from OA to SA swiftly and decisively.
Now, the annual interest in SA alone is generally able to meet the ever increasing FRS.

 

[henrylbh]

Congratulations for transferring from OA to SA swiftly and decisively.
Now, the annual interest in SA alone is generally able to meet the ever increasing FRS.

Now can try to increase SA as much as possible as eveey cent above FRS can be withdrawn at 55. But best to leave it as long term bond with good yield and safer. From 55, allocation to SA dwindles.