Pay back CPF or HDB first?

[SBC]

Is this for the repayment to CPF funds previously drawn out for property mortgage?

Any hidden T&C to note?

 

[JustDoLor]

I was not aware of CPF Housing Refund until yesterday.... I just installed myCPF apps and then accidentally saw this option called Housing Refund!

Then I realised instead of topping up my SA with cash and get “locked”, I can now do a CPF refund using my spare cash, then do a OA to SA. Lol

Search around and found this thread and your post..... and confirm my thinking is correct and doable .... haha

Use this

https://www.facebook.com/70638270922/posts/10156120352215923/

 

[belgarathc]

I was not aware of CPF Housing Refund until yesterday.... I just installed myCPF apps and then accidentally saw this option called Housing Refund!

Then I realised instead of topping up my SA with cash and get “locked”, I can now do a CPF refund using my spare cash, then do a OA to SA. Lol

Search around and found this thread and your post..... and confirm my thinking is correct and doable .... haha

Is CPF refund using cash tax deductible?

 

[JustDoLor]

I m not sure, I think not. Now I have to think harder, maybe do both cash and CPF refund..... Thanks.

Is CPF refund using cash tax deductible?

 

[SBC]

Anyone can verify if at age 55.
OA $315,132.21
SA $282,355.31
MA $52k

Then after - FRS can cash out 416k?

Most obvious question to ask before committing to this transfer.

 

[tangent314]

Then I realised instead of topping up my SA with cash and get “locked”, I can now do a CPF refund using my spare cash, then do a OA to SA. Lol

1. Your money also gets 'locked' if you do a CPF refund then transfer the OA to SA
2. Topping up SA directly using RSTU scheme gives you tax relief up to $7k/year

 

[BBCWatcher]

1. Your money also gets 'locked' if you do a CPF refund then transfer the OA to SA
2. Topping up SA directly using RSTU scheme gives you tax relief up to $7k/year

I think the argument is that if you're aiming below the Full Retirement Sum (at or very near the Basic Retirement Sum), then this particular distinction could matter. But it requires withdrawal of these Retirement Account dollars somewhere between age 55 and the start of CPF LIFE payouts -- and the consequent loss of attractive 4% interest, loss of higher lifetime retirement income, and loss of a higher residual for CPF nominees at any/every age when a residual still exists. And the loss of $7,000/year of tax relief on the front side. In other words, you could do this, but it certainly doesn't seem financially smart. Take the tax relief.

 

[maple96]

I think the argument is that if you're aiming below the Full Retirement Sum (at or very near the Basic Retirement Sum), then this particular distinction could matter. But it requires withdrawal of these Retirement Account dollars somewhere between age 55 and the start of CPF LIFE payouts -- and the consequent loss of attractive 4% interest, loss of higher lifetime retirement income, and loss of a higher residual for CPF nominees at any/every age when a residual still exists. And the loss of $7,000/year of tax relief on the front side. In other words, you could do this, but it certainly doesn't seem financially smart. Take the tax relief.

Just thinking out loud?

If he dumps 100k into OA then transfer all to SA, he gets compounded interest at 4% until 55, then continues to compound at 4% thereafter, and thereafter, not smart?

 

[BBCWatcher]

If he dumps 100k into OA then transfer all to SA, he gets compounded interest at 4% until 55, then continues to compound at 4% thereafter, and thereafter, not smart?

Perhaps you missed the fact that this voyage starts with cash in both scenarios.

I recommend topping up your Special Account directly, first, to qualify for up to $7,000 of tax relief. Then repay OA funds used for housing and transfer those OA dollars to SA, second. Yes, the $7,000 top up plus accrued interest on the top up can only be paid out via CPF LIFE monthly payouts. That distinction only ever matters if you withdraw a significant amount of cash from your Retirement Account in the period from age 55 to before your CPF LIFE payouts start -- so much cash that you're at or near the Basic Retirement Sum (with property pledge). The moment you withdraw that cash, you lose attractive 4% interest, higher monthly payouts for life, and (for every age when a residual remains), a higher residual for your CPF nominees on that cash.

My recommendation: take the tax relief first. You may have a different recommendation, but you'll need to explain specifically why you do, if you do, and preferably without being obnoxious.

 

[maple96]

Perhaps you missed the fact that this voyage starts with cash in both scenarios.

I recommend topping up your Special Account directly, first, to qualify for up to $7,000 of tax relief. Then repay OA funds used for housing and transfer those OA dollars to SA, second. Yes, the $7,000 top up plus accrued interest on the top up can only be paid out via CPF LIFE monthly payouts. That distinction only ever matters if you withdraw a significant amount of cash from your Retirement Account in the period from age 55 to before your CPF LIFE payouts start -- so much cash that you're at or near the Basic Retirement Sum (with property pledge). The moment you withdraw that cash, you lose attractive 4% interest, higher monthly payouts for life, and (for every age when a residual remains), a higher residual for your CPF nominees on that cash.

My recommendation: take the tax relief first. You may have a different recommendation, but you'll need to explain specifically why you do, if you do, and preferably without being obnoxious.

U make too many assumptions for him. I only suggest what makes sense!

A simple suggestion already posted there!

 

[BBCWatcher]

U make too many assumptions for him. I only suggest what makes sense!

You haven't suggested anything yet. What are you specifically suggesting?

 

[maple96]

You haven't suggested anything yet. What are you specifically suggesting?

U cannot comprehend? If he ask, I will discuss further

 

[maple96]

Perhaps you missed the fact that this voyage starts with cash in both scenarios.

I recommend topping up your Special Account directly, first, to qualify for up to $7,000 of tax relief. Then repay OA funds used for housing and transfer those OA dollars to SA, second. Yes, the $7,000 top up plus accrued interest on the top up can only be paid out via CPF LIFE monthly payouts. That distinction only ever matters if you withdraw a significant amount of cash from your Retirement Account in the period from age 55 to before your CPF LIFE payouts start -- so much cash that you're at or near the Basic Retirement Sum (with property pledge). The moment you withdraw that cash, you lose attractive 4% interest, higher monthly payouts for life, and (for every age when a residual remains), a higher residual for your CPF nominees on that cash.

My recommendation: take the tax relief first. You may have a different recommendation, but you'll need to explain specifically why you do, if you do, and preferably without being obnoxious.

This statement in red u wrote is incorrect statement of CPF rules! If he can meet FRS when he hit 55 with excess in SA, he can withdraw. U are assuming he is "poor". Your sentence structures are problematic and can misllead others

 

[BBCWatcher]

This statement in red u wrote is incorrect statement of CPF rules!

No, that's the rule. Here's what CPF itself says about it:

How can top-up monies be used?

Top-up monies are set aside specifically for retirement needs and will be streamed out as monthly payouts under the Retirement Sum Scheme, or CPF LIFE. It cannot be withdrawn in cash or used for any other purposes such as education, investment, insurance premium payments, housing etc.

The Retirement Sum Scheme is only for older cohorts.

If he can meet FRS when he hit 55 with excess in SA, he can withdraw. U are assuming he is "poor".

No, I'm not assuming that. You are now evidently agreeing with me that the implications of this particular CPF rule are not generally worth worrying about.

Your sentence structures are problematic and can misllead others

The much more likely problem is that you have ongoing challenges with basic English reading comprehension and civil discourse. And you still haven't provided any specific recommendation.

 

[JustDoLor]

I think BBCWatcher correctly read my mind.

Maybe I should explain why I said “locked”, my plan is as follows:
1.) SA shielding
2.) FRS at 55
3.) BRS at 65

Assume FRS $181k, then BRS $90.5k.

At 65, if I decide to pledge my property, I will get back cash from my RA as follows:
i) $90.5k if I had only transfer from OA to SA, no cash top-up.
ii) $90.5k minus [all cash top-up]

I assume after CPF refund, the “refunded cash” goes back to OA first, then OA transfer to SA. This “refunded cash” does not fall under “cash top-up”. So it should not reduce the amount that I can withdraw from RA at 65. Thus this “refunded cash” is not “locked”.

Hope I am correct, if not please let me know.

 

[maple96]

No, that's the rule. Here's what CPF itself says about it:


The Retirement Sum Scheme is only for older cohorts.


No, I'm not assuming that. You are now evidently agreeing with me that the implications of this particular CPF rule are not generally worth worrying about.


The much more likely problem is that you have ongoing challenges with basic English reading comprehension and civil discourse. And you still haven't provided any specific recommendation.

rubbish, u cannot explain simple rules, u can only make things complicated

U cannot even extract the correct CPF rules or faq, even fail to explain the different rules clearly.

Here is the correct CPF rules we are discussing here:

Q I received top-ups before age 55. What happens to the top-ups when I turn 55?
A If you had received top-ups before age 55, the top-ups and accrued interest in your Special Account (SA) will be transferred to your Retirement Account (RA) when you turn 55. Any excess, above the Full Retirement Sum applicable to you, can be withdrawn when you apply for withdrawal at age 55.

My further comments:

Monies in RA are handled differently!

my suggestion already clearly posted, u simply refuse to accept or comprehend, is exactly what he wants so he can withdraw full BRS, read his latest post

Just thinking out loud?

If he dumps 100k into OA then transfer all to SA, he gets compounded interest at 4% until 55, then continues to compound at 4% thereafter, and thereafter, not smart?

 

[maple96]

I think BBCWatcher correctly read my mind.

Maybe I should explain why I said “locked”, my plan is as follows:
1.) SA shielding
2.) FRS at 55
3.) BRS at 65

Assume FRS $181k, then BRS $90.5k.

At 65, if I decide to pledge my property, I will get back cash from my RA as follows:
i) $90.5k if I had only transfer from OA to SA, no cash top-up.
ii) $90.5k minus [all cash top-up]

I assume after CPF refund, the “refunded cash” goes back to OA first, then OA transfer to SA. This “refunded cash” does not fall under “cash top-up”. So it should not reduce the amount that I can withdraw from RA at 65. Thus this “refunded cash” is not “locked”.

Hope I am correct, if not please let me know.

U want to do shielding, u should not do to much direct topups until it exceed 40k! How many more years do u have till 55? Do u plan to do 7k topup to SA every year? It is also "locked" here!

If he read u correctly, he should not still ask u to topup 7 k to SA and get "locked" twice! No more 90.5k for u . He wants u to stop withdrawing BRS!

 

[tangent314]

At 65, if I decide to pledge my property, I will get back cash from my RA as follows:
i) $90.5k if I had only transfer from OA to SA, no cash top-up.
ii) $90.5k minus [all cash top-up]

Transfering from OA to SA is also part of the RSTU scheme, so whatever you transfer is also also subtracted from the maximum you can withdraw from pledging your property.

 

[maple96]

Transfering from OA to SA is also part of the RSTU scheme, so whatever you transfer is also also subtracted from the maximum you can withdraw from pledging your property.

Wrong, tansfer from your own OA to SA is different from cash topup. Transfer will not be locked!

Instead of waiting for CPFB to do the transfer from OA to SA for u when u hit 55, u transfer yourself to earn more 4% interest, smart right!

 

[tangent314]

I assume after CPF refund, the “refunded cash” goes back to OA first, then OA transfer to SA. This “refunded cash” does not fall under “cash top-up”. So it should not reduce the amount that I can withdraw from RA at 65. Thus this “refunded cash” is not “locked”.

Hope I am correct, if not please let me know.

These are the links you will need to read so you can decide for yourself which is correct.

If you go to the RSTU page and look under forms, you will see that there are separate forms for topup using cash and using CPF, but they all fall under the RSTU scheme.
https://www.cpf.gov.sg/Members/Schemes/schemes/retirement/retirement-sum-topping-up-scheme

In the RSTU FAQ, it again talks about transferring from your OA to your SA under the scheme
https://www.cpf.gov.sg/members/FAQ/...ping-Up Scheme&folderid=19860&ajfaqid=2188830

And in the CPF Life FAQ, it states that top-ups made under RSTU is excluded from being withdrawn with a property pledge
https://www.cpf.gov.sg/members/FAQ/...group=CPF LIFE&folderid=11656&ajfaqid=2186359