FRS vs ERS

[kelhot2001]

As mentioned earlier, once money gets into RA, it cannot be withdrawn except for a sum allowed at age 65 and amount above BRS (excluding topping up ....) with sufficient property pledge provided ..... Only money left in SA, after meeting BRS/FRS, can be withdraw in any amount anytime.[/QUOTE]

Can hor, based on my plan as per CPF, I do ERS at 55, then at 65 all dump into RA, delay payout till 69.9 years of age. Then apply exemption from CPF life, then withdraw 100% out from RA.

Can right ?

 

[kelhot2001]

happylor wrote:

The pure thinking of him skewed toward BRS, is that he think none of his family history live above 95. He is thinking BRS payout till 95 is sufficient, as many of his friends also told him, no point go for FRS/ERS which pay beyond 95. That is only govt hope to get more CPF Pool to support those live beyond 95.

He also very worries , as he heard many friends told him, TOP UP Stuck in CPF, so asked me to check the step carefully

He understand, even he go before 95, those money balance in RA, OA, SA would not vanished, but go to next of kin, he just mentioned, no need left too much for kids and just to lower their burden, BUT must have flexibility to draw EXCESS RA out like ATM when needed.

At 55, your uncle choose how much to put in BRS($90.5K+property pledge), FRS($181K), ERS($271K). After that wait for 10 years, then now choose how to withdraw: Basic Plan(BP: $1280.00 p/mth) , Standard Plan (SP:$1405) p/mth), escalatiing plan (EP: $1102 p/mth)

Go here to see
https://www.cpf.gov.sg/eSvc/Web/Schemes/LifePayoutEstimator/GetLifePayoutEstimatorResults

Difference between the 3

BP: Your RA funds remain in your RA acct at 65, only 10-20% are deducted to pool LIF funds, the rest you will draw until empty (est age 90) , then you draw out from LIF till death
SP: Your RA funds at 65, 100% go into LIF funds , and you draw out from LIF till death
EP: Your RA funds at 65, 100% go into LIF funds, and you draw out from LIF till death. Your initial drawout is low, but grow progressive to about $2k at age 90

Note: Any death before age 85, you stand to lose around $60K to $100K of bequest money to LIF funds for (SP and EP)

 

[henrylbh]

As mentioned earlier, once money gets into RA, it cannot be withdrawn except for a sum allowed at age 65 and amount above BRS (excluding topping up ....) with sufficient property pledge provided ..... Only money left in SA, after meeting BRS/FRS, can be withdraw in any amount anytime.

Can hor, based on my plan as per CPF, I do ERS at 55, then at 65 all dump into RA, delay payout till 69.9 years of age. Then apply exemption from CPF life, then withdraw 100% out from RA.

Can right ?[/QUOTE]

At 55, you can you raise RA to ERS. So what you mean by 'at 65 all dump into RA'?

Of course, you can empty RA if you manage to get full exemption or quit the country.

 

[henrylbh]

At 55, your uncle choose how much to put in BRS($90.5K+property pledge), FRS($181K), ERS($271K). After that wait for 10 years, then now choose how to withdraw: Basic Plan(BP: $1280.00 p/mth) , Standard Plan (SP:$1405) p/mth), escalatiing plan (EP: $1102 p/mth)

Something amiss in your explanation.

 

[kelhot2001]

Something amiss in your explanation.

Quick quick help me put in, later I kena whacked again, I no expert ma

 

[happylor]

Difference between the 3

BP: Your RA funds remain in your RA acct at 65, only 10-20% are deducted to pool LIF funds, the rest you will draw until empty (est age 90) , then you draw out from LIF till death
SP: Your RA funds at 65, 100% go into LIF funds , and you draw out from LIF till death
EP: Your RA funds at 65, 100% go into LIF funds, and you draw out from LIF till death. Your initial drawout is low, but grow progressive to about $2k at age 90

Note: Any death before age 85, you stand to lose around $60K to $100K of bequest money to LIF funds for (SP and EP)

Thank You all Experts !
Yea, I take a look, I did mixed up after talking to my uncle and his friends

At 55, my uncle is contemplating to put in BRS($90.5K+property pledge), FRS($181K), [As some say pledge no good , some say good, lol This is something I dont know too]

After that wait for 10 years, he most likely would choose how to withdraw: Basic Plan(BP: $1280.00 p/mth) , which he think fairer to him could still draw out 80% of his hard earned RA before 90, not totally toss to the pool

All the uncles said THANK YOU to you all, they getting clearer

 

[kelhot2001]

Thank You all Experts !
Yea, I take a look, I did mixed up after talking to my uncle and his friends

At 55, my uncle is contemplating to put in BRS($90.5K+property pledge), FRS($181K), [As some say pledge no good , some say good, lol This is something I dont know too]

After that wait for 10 years, he most likely would choose how to withdraw: Basic Plan(BP: $1280.00 p/mth) , which he think fairer to him could still draw out 80% of his hard earned RA before 90, not totally toss to the pool

All the uncles said THANK YOU to you all, they getting clearer

Good choices, btw the 10-20% premium is still refundable as form of bequest upon death. As for std/esc , the fund in LIF is also refundable in form of bequest but end early meaning to say, by age 81, for std/esc the bequest will become zero.

Last thing, I go niteclub, the meimei still call me gege. I am not so old LOL

 

[maple96]

Good choices, btw the 10-20% premium is still refundable as form of bequest upon death. As for std/esc , the fund in LIF is also refundable in form of bequest but end early meaning to say, by age 81, for std/esc the bequest will become zero.

Last thing, I go niteclub, the meimei still call me gege. I am not so old LOL

Well done!

Call u uncle is respect

 

[tangent314]

Now his NTUC agent got to know these, also trying to convince him getting NTUC Asian income fund, with interest rate of 5.25%. If invest on 100k, monthly distribution, likely to be 460+ with insurance coverage too..

This 5.25% is not guaranteed distribution, and the 5.25% performance is not guaranteed - if underlying portfolio performs less than that, then the distribution is taken from the NAV and value of the fund goes down.

Also NTUC Asian Income Fund is just a wrapper around Schroder's fund of the same name. If you really want to buy this fund, it would be cheaper to purchase it through Poems or DollarDex. Though generally there are better options than unit trusts

The pure thinking of him skewed toward BRS, is that he think none of his family history live above 95. He is thinking BRS payout till 95 is sufficient, as many of his friends also told him, no point go for FRS/ERS which pay beyond 95. That is only govt hope to get more CPF Pool to support those live beyond 95.

Doesn't make sense. BRS also pays out beyond age 95.

He understand, even he go before 95, those money balance in RA, OA, SA would not vanished, but go to next of kin, he just mentioned, no need left too much for kids and just to lower their burden, BUT must have flexibility to draw EXCESS RA out like ATM when needed.

You do that with OA and (preferably) SA, not with RA. That's the point of following BBCW's plan to repay OA, transfer to SA then shield the SA, right?

P/S: He just opened his POEMS account, look look on the UOB United SGD Fund CL A (Acc)

Generally we prefer more passively managed portfolios that track the index performance and have lower costs. That would be Lion Global All Seasons Fund. Probably for a retiree you would go with the Standard rather than the Growth version.

 

[BBCWatcher]

That's the point of following BBCW's plan to repay OA, transfer to SA then shield the SA, right?

Roughly half of the Retirement Account is available for withdrawal with a property pledge and BRS-level CPF LIFE.

This is a really simple case, actually. Your uncle's best approach to maximize wealth and yield is to fund his Retirement Account fully, to the Full Retirement Sum ($181,000 on his 55th birthday in 2020) using $141,000 Ordinary Account dollars and $40,000 Special Account dollars (the minimum allowed). He should also "shield" his Special Account so that he ends up with a lot of dollars there, too. Both his RA and SA dollars will earn 4+% interest. Then he can make whatever CPF LIFE-related decisions he wishes, preferably just before his 70th birthday since that sweet 4+% interest is very sweet indeed and ought to run as long as he can let it run. All SA+OA+RA dollars will be available for withdrawal any time he wishes, except for RA dollars earmarked for at least BRS-level CPF LIFE and before he starts CPF LIFE payouts. (After CPF LIFE payouts start it depends on the payout plan choice.)

There are two things he should do immediately, this month:

1. If your uncle or somebody else in his immediate family can qualify for $7,000 of tax relief by topping up his Special Account, that should be done, now. (The tax relief is valuable, and yes, it will raise his future minimum CPF LIFE participation level a little above the BRS. That's not a problem -- the tax relief is valuable!)

2. He should figure out the maximum Special Account top up he can make -- that figure can be found in his online CPF account. Then he should take idle cash and repay OA funds he used for housing, in this amount: the remaining amount of allowed SA top up (per his online account statement) less the $7,000 that he or somebody else tops up for tax relief. Let's suppose that amount is $91,000, so he repays $91,000 into his OA. Then he immediately transfers those OA dollars to his SA, and his SA is funded to the Full Retirement Sum.

He should do #1 and #2 now, preferably within this month (March), in order to start collecting the sweet 4% interest on that money sooner rather than later.

The next steps will happen early next year, before his 55th birthday.

 

[henrylbh]

At 55, my uncle is contemplating to put in BRS($90.5K+property pledge), FRS($181K), [As some say pledge no good , some say good, lol This is something I dont know too]

After that wait for 10 years, he most likely would choose how to withdraw: Basic Plan(BP: $1280.00 p/mth) , which he think fairer to him could still draw out 80% of his hard earned RA before 90, not totally toss to the pool

Whether BRS or FRS good or no good depends on individuals.

What he intends to do with amount withdrawn in excess of BRS? Is he comfortable with the life payout under BP (with BRS) etc ..

Please note that if he goes for BRS, the payout is not $1,280 pm under the Basic Plan. The payout is about 700 plus.

 

[lifeafter41]

Good choices, btw the 10-20% premium is still refundable as form of bequest upon death. As for std/esc , the fund in LIF is also refundable in form of bequest but end early meaning to say, by age 81, for std/esc the bequest will become zero.

Last thing, I go niteclub, the meimei still call me gege. I am not so old LOL

Go nightclub, ktv, etc, all meimei called every male that walks into the place, ge he or handsome.......so don’t kid yourself.....lol

 

[happylor]

Dear BBC, Kelhot, Henry, Deluxe, all the GEGE and Experts:

Let me RECAP and Organise it better again. Shall I make any mistake, pls do not hesitate to guide me along . My uncle also sharing with his classmate, pressure lah..

Now My Uncle have :
OA ZERO
SA 60,000
MA 31,000
Withdrawal for properties (OA:195,991 + 76,877 Interest + SA:17,502 + 3,186 Interest)

His CPF indicate that he used for Investment:
OA 80,113
SA 17,370
.... Which he use to purchase NTUC INCOME
(A) GROWTH CV 67,400 Mature 3/2020 from OA [Mature 2 week after his 55 birthday]
(B) GROWTH CV 36,300 Mature 2/2020 from SA [Mature before his 55 Birthday]
(C) HARVEST CV 72,800 Mature 3/2020 from OA [Mature 2 weeks before before his 55 Birthday]

He and spouse are covered by Enhanced Incomeshield Preferred

What he need to do immediately PHASE 1 now is:
1. Top up 116K to OA (to pay back his Hse OA). Current SA limit of 176k – 60K he has in SA
2. Immediately request 116K OA transfer to SA
3. Immediately use the 136K SA to get Lion Global All Seasons Fund – Standard via Peom
• He is working oversea, child in NS, hence no one could benefit from the Tax Relief Top Up?

Then, before he turn 55, maturity of his two NTUC Investment Policy (B) + (C) would go back to CPF become:
OA 72,800 (From C) …. Matured 2 weeks before he turned 55 .
SA 40,000 + 36,300 (From B) …… Matured in Feb 2020 before he turn 55
MA 31,000
Withdrawal for properties (OA:79,991 + 76,877 Interest + SA:17,502 + 3,186 Interest)

What he need to do later in PHASE 2 before turn 55 is:
1. Once NTUC (B) Maturity back to SA during Feb, Immediately use it to get more Global All Seasons Fund – Standard via Peom
2. Top up 136K to OA (to pay back his Hse OA+Interest). Current SA limit of 176k – 40K
3. Immediately use the 136K SA to get Lion Global All Seasons Fund – Standard via Peom

By 54 Birthday:
OA 72,800 (From C) + another NTUC (A) 67,400 [Mature 2 week after his 55 birthday]
SA 40,000
MA 31,000
Withdrawal for properties (OA:20,868 + SA:17,502+3,186 Interest)
>>> This would sufficient for FRS 181K
>>> In fact, he may Top up his OA Withdrawal for properties (OA:20,868 + SA:17,502+3,186 Interest), then transfer this excess amount to Top Up his spouse CPF for her to have better retirement payout?

By 55 Birthday :
OA ZERO (Transferred to RA)
SA 308.3 K (Sell off all his Lion Global All Season Fund, back to SA). ***
MA 31,000
RA 181,000 >>FRS
*** Question: This SA would exceed the max 176K, he could transfer to her spouse SA?

Before 65 Birthday:
>> IF he think , still fit to enjoy more years, Request CPF Defer Payout to 70
>> Choose STANDARD PAYOUT :
- As he could use his hard earned money this life
- If uplorry before 81, the balance FRS minus the cummulative Payout would left as bequest to family.
- If live beyond 81, cumulatively payout he has taken 259-287K more than his FRS (Based on CPF LIF Estimator), which is fair no more bequest for family. But he continue to get Standard Payout of 1.4-1.5K/Mthly till he happy to go.

Did I understand correctly and could execute this plan accordingly? Thank you all Expert's Guidance and Patience

 

[maple96]

Before 65 Birthday:
>> IF he think , still fit to enjoy more years, Request CPF Defer Payout to 70
>> Choose STANDARD PAYOUT :
- As he could use his hard earned money this life
- If uplorry before 81, the balance FRS minus the cummulative Payout would left as bequest to family.
- If live beyond 81, cumulatively payout he has taken 259-287K more than his FRS (Based on CPF LIF Estimator), which is fair no more bequest for family. But he continue to get Standard Payout of 1.4-1.5K/Mthly till he happy to go.

Did I understand correctly and could execute this plan accordingly? Thank you all Expert's Guidance and Patience

Oops, the revised CPF Life Calculator information succeeded in convincing the layman!

(need to find uncle henry's table and post here)

 

[dork32]

Oops, the revised CPF Life Calculator information succeeded in convincing they layman!

(need to find uncle henry's table and post here)

you are really not simple, this guy posted so many things, yet you can detect the trash in it

 

[kelhot2001]

[Before 65 Birthday:
>> IF he think , still fit to enjoy more years, Request CPF Defer Payout to 70
>> Choose STANDARD PAYOUT :
- As he could use his hard earned money this life
- If uplorry before 81, the balance FRS minus the cummulative Payout would left as bequest to family.
- If live beyond 81, cumulatively payout he has taken 259-287K more than his FRS (Based on CPF LIF Estimator), which is fair no more bequest for family. But he continue to get Standard Payout of 1.4-1.5K/Mthly till he happy to go.

Did I understand correctly and could execute this plan accordingly? Thank you all Expert's Guidance and Patience

[/QUOTE]

Let use your example, someone die same day at age 81, based on FRS of $176000

Basic Plan Cumulative drawout: $265,375.00
Standard Plan Cumulative drawout : $289,500.00

Basic Plan Bequest : $138,267.00
Standard Plan Bequest: $ZERO.00

I will be at my deathbedcursing myself for dying so early because had I choose Std Plan, I left nothing for my wife, and my son my daughter. Anyway it is ok, because they are quite rich and they can afford to lose $138,267.00. Well at least these sum of money will be use to support LIF fund for those who live longer than me. OK, backtrack, I choose basic Plan

That is the plan isnt it , to use dead man money to support those alive at least they cannot complain

 

[henrylbh]

Let me RECAP and Organise it better again. Shall I make any mistake, pls do not hesitate to guide me along . My uncle also sharing with his classmate, pressure lah..


Did I understand correctly and could execute this plan accordingly? Thank you all Expert's Guidance and Patience

Cannot understand your numbers.

Need to rephrase and provide more info or correct info for numbers in red.

 

[maple96]

Cannot understand your numbers.

Need to rephrase and provide more info or correct info for numbers in red.

He is very confused, u cannot take his figures or process.

U have to take all the base numbers and propose the solution/process to him!

 

[BBCWatcher]

I’ll repeat. There are only three things to do now:

1. If anybody qualifies for tax relief (your uncle or one of his immediate family members), make a $7,000 top up to his Special Account for the tax relief. That’ll bring his total SA deposits to date to $60,000+$17,370+$7,000=$84,370.

2. Repay $91,630 of OA dollars used for housing into his OA. How did I get that number? That’s equal to the current (2019) Full Retirement Sum of $176,000 minus $84,370 (his total SA deposits to date, including the $7,000 for tax relief). He should be able to check this number right now, online in his CPF account — or stop by a CPF customer service office and ask “What’s the maximum top up amount I can make to my Special Account now?” He should see $98,630 right now if the numbers you’ve reported are accurate. (The $7,000 top up for tax relief in Step #1 reduces that to $91,630.)

3. He transfers those $91,630 OA dollars into his SA.

That’s it for now! Everything else can and probably should wait until a month or two before his 55th birthday. Unless he’s sitting on a pile of cash that’s earning less than 2.5% interest, in which case OA at 2.5% is mighty attractive to a 54 year old. So he can repay more than the figure in step #2 if he wishes, if he’s just got lots of cash rotting in a bank account at low interest.

What these steps accomplish is to max out the deposits he’s allowed to make to his SA, and that SA is earning 4%, starting from April 1, 2019, if he gets these steps done and credited this month (March, 2019). That sets him up very well indeed for early next year’s maneuvers. We then have the next 9 months or so to discuss those maneuvers, plenty of time.

 

[henrylbh]

He is very confused, u cannot take his figures or process.

U have to take all the base numbers and propose the solution/process to him!

He trying to help his elders. But he got wrong conception