Pay back CPF or HDB first?

[GeraldineT]

As long as your flat is sold at or above valuation price, you do not need to top up cash into CPF if there is shortfall when refunding principle + accrued interest into CPF.

http://www.housesinsingapore.com/top-up-of-cpf-if-hdb-is-sold-below-valuation/

Whether you use cash or CPF to pay, couple of things to take note of:

1. It is suboptimal to have balances in your OA except for paying for your housing (or perhaps education), otherwise it's just better to move into SA to get better interest rates.

2. If you decide to pay with cash and move OA into SA, you can achieve the same thing by just paying with OA and then use cash to top up into SA. The big difference is can get tax deductible up to $7k....

how much money can we move from OA to SA?
cause if eg we chose to use cash to pay our loan, meaning we won't touch our combine cpf of 90k in 2028 (which we are now 38 year old /40 year old)

 

[SBC]

how much money can we move from OA to SA?
cause if eg we chose to use cash to pay our loan, meaning we won't touch our combine cpf of 90k in 2028 (which we are now 38 year old /40 year old)

Can move OA to SA till FRS is reached. FRS currently at 171k.

 

[BBCWatcher]

There's a school of thought that the CPF Ordinary Account is for "poor" people who cannot otherwise afford housing. For everyone else, Ordinary Account to Special Account conversions usually make a lot of sense.

In addition to the fact that OA to SA conversions are not allowed once the SA reaches the Full Retirement Sum, OA to SA conversions are also not allowed once you reach age 55.

I'm a monthly full converter and keep OA at zero, as it happens. I simply don't need OA funds for housing, so I'd much rather enjoy the extra 1.5 percentage points of compound interest, thank you very much. I'm a bit unusual in certain ways, but in this respect I'm not that unusual. There are plenty of moderately wealthy or wealthier people (including family/parental wealth) who simply don't need OA, and so partial or full OA to SA conversions are one sensible part of their financial plan.

You can also get funds into SA via top-ups, with up to $7,000 eligible for tax relief. The optimization math can be a little bit complicated in deciding how much to top up and how much to convert. (RA top-ups for $7K/year tax relief are still possible after age 55 as long as the RA is still below the then current Full Retirement Sum.) However, in my situation, the math isn't complicated. I do both, and it makes huge financial sense for me. YMMV.

 

[tangent314]

Your SA can be topped up to Enhanced Retirement Sum (not FRS) which is 1.5x the FRS. However, tax relief only applies up to the FRS.

 

[LiteHouse]

There's a school of thought that the CPF Ordinary Account is for "poor" people who cannot otherwise afford housing. For everyone else, Ordinary Account to Special Account conversions usually make a lot of sense.

In addition to the fact that OA to SA conversions are not allowed once the SA reaches the Full Retirement Sum, OA to SA conversions are also not allowed once you reach age 55.

I'm a monthly full converter and keep OA at zero, as it happens. I simply don't need OA funds for housing, so I'd much rather enjoy the extra 1.5 percentage points of compound interest, thank you very much. I'm a bit unusual in certain ways, but in this respect I'm not that unusual. There are plenty of moderately wealthy or wealthier people (including family/parental wealth) who simply don't need OA, and so partial or full OA to SA conversions are one sensible part of their financial plan.

You can also get funds into SA via top-ups, with up to $7,000 eligible for tax relief. The optimization math can be a little bit complicated in deciding how much to top up and how much to convert. (RA top-ups for $7K/year tax relief are still possible after age 55 as long as the RA is still below the then current Full Retirement Sum.) However, in my situation, the math isn't complicated. I do both, and it makes huge financial sense for me. YMMV.

Is transferring OA to SA really worth it? It makes SA reach FRS earlier and therefore lesser years to enjoy tax reliefs from the $7k topup.

 

[BBCWatcher]

Is transferring OA to SA really worth it? It makes SA reach FRS earlier and therefore lesser years to enjoy tax reliefs from the $7k topup.

You ought to check the math in your personal situation, but the short answer is yes. The additional 1.5 percentage points of interest, compounded, and started earlier, are very, very powerful. It still takes a long while to slam into the Full Retirement Sum and run out of $7K top-up opportunities, and you still may have $7K top-up opportunities among immediate eligible family members after that.

Please note that you can also make MA top-ups with tax relief, as long as those MA top-ups fit within the CPF Annual Limit. If you have limited top-up dollars and are trying to choose between MA and SA (and are eligible for tax relief either way), I generally recommend doing MA first. There are several reasons for that recommendation, but one reason is that it would likely work slightly better in conjunction with an OA to SA conversion strategy.

 

[GeraldineT]

Can move OA to SA till FRS is reached. FRS currently at 171k.

I am a bit confuse, I tried using the CPF calculator done up by one of the member
and it seems like whether I transfer 30k from OA to SA, the difference of my
OA and SA is this:
At age 55 if I do not move:$315,132.21 $282,355.31
At age 55 if I move: $343,386.63 $334,776.34

Does this amount seems current?
Assuming if CPF retirement age and sum is still the same 27 years later,
I would be able to cash out either $416,487.52 or $497,162.97 on top of the FRS?
Does anyone knows?

if required info:
my current OA and SA is $63,025.18 $11,558.87
but in 2021, my OA will be wiped out as my BTO will be ready

 

[JuniorLion]

I am a bit confuse, I tried using the CPF calculator done up by one of the member
and it seems like whether I transfer 30k from OA to SA, the difference of my
OA and SA is this:
At age 55 if I do not move:$315,132.21 $282,355.31
At age 55 if I move: $343,386.63 $334,776.34

Does this amount seems current?
Assuming if CPF retirement age and sum is still the same 27 years later,
I would be able to cash out either $416,487.52 or $497,162.97 on top of the FRS?
Does anyone knows?

if required info:
my current OA and SA is $63,025.18 $11,558.87
but in 2021, my OA will be wiped out as my BTO will be ready

Are you 28 years old this year?

How did you get the numbers of 400k+?

 

[SBC]

Are you 28 years old this year?

How did you get the numbers of 400k+?

She had already mentioned is not hers.

 

[BBCWatcher]

The basic CPF optimization rule is that if you don’t need some or all of your OA funds for housing (or education), you should transfer those funds to your SA, every month in fact, until your SA hits the Full Retirement Sum whereupon you’re not allowed to do any more OA to SA transfers (although then you might consider OA to family member transfers, which are sometimes permitted depending on the circumstances). Many people (not everyone!) simply don’t need OA funds for housing or education. They have plenty of other funds already, they’re well defended in terms of mortgage servicing (with a nice emergency reserve fund available), and so it makes perfect financial sense to make CPF dollars work harder. That also means their retirement security is nailed down sooner and better, which in turn means they can safely, prudently take a slightly more aggressive investment posture and will have slightly less need to save for retirement.

It all works, if you’re in that fortunate position — and there are many Singaporeans in that fortunate position. Congratulations if you’re one of them.

 

[GeraldineT]

Are you 28 years old this year?

How did you get the numbers of 400k+?

Yes. I’m 28 this year.

https://www.cpf.gov.sg/eSvc/Web/Schemes/CpfWithdrawalCalculator/CpfWithdrawalCalculator
this calculator?
I used the predicted OA and SA when im 55 $315,132.21 $282,355.31

 

[GeraldineT]

The basic CPF optimization rule is that if you don’t need some or all of your OA funds for housing (or education), you should transfer those funds to your SA, every month in fact, until your SA hits the Full Retirement Sum whereupon you’re not allowed to do any more OA to SA transfers (although then you might consider OA to family member transfers, which are sometimes permitted depending on the circumstances). Many people (not everyone!) simply don’t need OA funds for housing or education. They have plenty of other funds already, they’re well defended in terms of mortgage servicing (with a nice emergency reserve fund available), and so it makes perfect financial sense to make CPF dollars work harder. That also means their retirement security is nailed down sooner and better, which in turn means they can safely, prudently take a slightly more aggressive investment posture and will have slightly less need to save for retirement.

It all works, if you’re in that fortunate position — and there are many Singaporeans in that fortunate position. Congratulations if you’re one of them.

Yes I understand that transferring OA to SA when not required. However, my partner and mine income combine is only 5-6k.
I am trying to do a calculations if we are able to do so w a bto coming in 2020/2021. As you mention we will also need a nice reserved side cash when rainy days are here and we only started saving last year (quite late I know..) so lots of calculations to be done.

That’s why just wanna see if anyone is able to see if the calculations I’ve done is roughly correct as moving OA to SA is non transferable and I was asking around my friends n family irl and non of them understand the theory of it.

 

[Sinkie]

Actually how to pay back the cpf that I used to pay for my hdb?

 

[badsector]

Actually how to pay back the cpf that I used to pay for my hdb?

visit CPF, fill up a form

 

[Sinkie]

visit CPF, fill up a form

Will this consider as contribution to cpf and get tax rebate?

 

[BlueRobin]

visit CPF, fill up a form

One could also download the form from CPF website.

Here is the link that was given to me from BBC in this forum:

https://www.cpf.gov.sg/Assets/members/Documents/FORM_HSDVR.pdf

I did that and just send in a cheque without having to make a trip.

 

[GeraldineT]

Actually how to pay back the cpf that I used to pay for my hdb?

https://www.cpf.gov.sg/Assets/members/Documents/FORM_HSDVR.pdf
this form?

 

[yamakazi51]

Can we get the info online on how much we owe to ‘our’ cpf used for property including the accrued interest? Or need to write to them?

 

[BlueRobin]

Can we get the info online on how much we owe to ‘our’ cpf used for property including the accrued interest? Or need to write to them?

Just login to CPF website. Under "My Statement" and scroll down to section C it will show you the amount used and also the accrued interests.

 

[GeraldineT]

Can we get the info online on how much we owe to ‘our’ cpf used for property including the accrued interest? Or need to write to them?

I only know
If you have obtained an HDB concessionary loan, you may log in to My HDBPage to check the outstanding loan amount. If you have obtained a mortgage loan from the bank, please check with the bank.

for me, I used this to calculate the accrued interest
2.5%/12*amount used from cpf*12*years before selling the house.
cause I havent really use any amount yet

WAH, I just saw this image and realise my calculation is wrong