What should i do for parents CPF?

[RoLanTo]

I currently do not have the numbers on hand. In general, mum seems to have more cpf amount and manage to hit the min sum according her 55yo target. dad not alot

both parents are 67 (dad) and 64 (mum) yo at the moment.
They are still on RSS plan, both not asking for payout yet. both currently still working with some minimal pay. and i do give them monthly allowance (cash)

some questions i have:
1) should i convert them to cpf-life? or stick with RSS payout?
2) if i start their cpf payout now (cpf life/rss), should i use my monthly cash allowance to them, top up to their cpf RA then get payout "partially" via cpf? at the same time i get tax relief

question about dad case.. lets say if he stick with RSS, with the minimal payout of 250, assume last about 4 years.. if convert to cpf life.. the minimal payout still remain as 250 and last till he past away?? or CPF-life payout got no such thing as minimal 250 like RSS.. Else seems like too good liao.. haahaa

*Edit.. i tried the life estimator, dont let me put 12000 at age 67 to see the payout.. need min 40000.. but i thought cpf life got no min sum to join .. hmm

 

[a4973]

I currently do not have the numbers on hand. In general, mum seems to have more cpf amount and manage to hit the min sum according her 55yo target. dad not alot

both parents are 67 (dad) and 64 (mum) yo at the moment.
They are still on RSS plan, both not asking for payout yet. both currently still working with some minimal pay. and i do give them monthly allowance (cash)

some questions i have:
1) should i convert them to cpf-life? or stick with RSS payout?
2) if i start their cpf payout now (cpf life/rss), should i use my monthly cash allowance to them, top up to their cpf RA then get payout "partially" via cpf? at the same time i get tax relief

question about dad case.. lets say if he stick with RSS, with the minimal payout of 250, assume last about 4 years.. if convert to cpf life.. the minimal payout still remain as 250 and last till he past away?? or CPF-life payout got no such thing as minimal 250 like RSS.. Else seems like too good liao.. haahaa

*Edit.. i tried the life estimator, dont let me put 12000 at age 67 to see the payout.. need min 40000.. but i thought cpf life got no min sum to join .. hmm

Maybe you can put 40k get the result then prorate?

 

[RoLanTo]

ya.. pro-rated about 80+/month

 

[Okenba]

To me, the most basic consideration is naturally life expectancy.
After which it is immediate needs, and then weighing present vs future needs.

Basically, do they need more money now or would it be prudent to ensure that they have more money later.

 

[maumu]

a side question.. also about parent's CPF.

let's say we've been contributing yearly (next year is $8k) to our parent's CPF account and they have started (automated) withdrawing, is it that CPF board will automatically compute the monthly withdrawal upon contribution?

let's say currently every month withdraw $500. after contributing $8k in January, it will become $(500+666.67) from February onwards?

is it like that?

 

[tangent314]

As long as your parents are still earning money they should not start payout until 70. This allows the amount in RA to earn as much interest as possible.

Amounts in RA earns bonus interest up to $60k, so your priority should be to get your dad to $60k as soon as possible. Ideally your dad should be at FRS too. There are a few days to top up your dad's RA, either by cash or your mom can transfer some of her CPF over to your dad.

You can get tax reliefs of up to $7000 transferring cash to your dad (you cannot transfer to your mom because she's already at FRS), but you must get it done TODAY to qualify for this year's tax relief. Next year you can get tax relief up to $8000 and do the same again.

Unless your parents have some serious medical issues where you don't think they will survive pass 80-85 I recommend going for CPF LIfe to ensure they will have a lifelong income. Your priority is to push your dad's RA as high as possible before the age of 70.

 

[yoongf]

If the 7k tax relief topping up parents acct is beneficial to you, start doing it nw.
U hv a few hours more to qualify under 2021 tax relief.
Go for Dad's acct since he is below 60k.

Other issues.. not so urgent for today.

 

[yoongf]

a side question.. also about parent's CPF.

let's say we've been contributing yearly (next year is $8k) to our parent's CPF account and they have started (automated) withdrawing, is it that CPF board will automatically compute the monthly withdrawal upon contribution?

let's say currently every month withdraw $500. after contributing $8k in January, it will become $(500+666.67) from February onwards?

is it like that?

Need to know if they are already on CPF Life.
1 Nov 21onwards .. all inflow to RA of members on CPF Life auto add to CPF life premiums.

 

[maumu]

Need to know if they are already on CPF Life.
1 Nov 21onwards .. all inflow to RA of members on CPF Life auto add to CPF life premiums.

what if they are not?

 

[BBCWatcher]

Need to know if they are already on CPF Life.
1 Nov 21onwards .. all inflow to RA of members on CPF Life auto add to CPF life premiums.

No, that doesn't matter right now and probably doesn't matter at all. They're not receiving either classic RSS or CPF LIFE payouts -- the original poster made that clear -- so today (December 31, 2021) is the last day to decide whether to claim tax relief -- and the CPF Matched Retirement Savings Scheme too, probably. $7K via PayNow QR into the Dad's Retirement Account, now, sure looks like a great idea. And if there's any other sibling or family member that can get tax relief by doing the same, even better.

There are a couple hours more to do the due diligence, but this isn't a decision that can wait until tomorrow if tax relief is at stake. PayNow QR today/now is the last chance for 2022 Year of Assessment tax relief.

There's also January's interest at stake. A top up today qualifies for January, 2022, interest earning. A top up tomorrow doesn't. And it's as much as 6% p.a. interest (depending on the father's balance), meaning as much as $35 extra on a $7,000 top up for January alone -- a decent sit down restaurant meal of interest, for perspective.

 

[BBCWatcher]

1) should i convert them to cpf-life? or stick with RSS payout?

Don't worry about it now. This decision they won't make until just before they start receiving payouts which can be as late as age 70. As another poster mentioned they shouldn't start receiving payouts unless and until they actually need the payouts or age 70, whichever comes later.

However, at that future time they can each dispassionately evaluate their health status -- and not in a pessimistic way. If they're in average or better health then they'll probably want to choose CPF LIFE.

2) if i start their cpf payout now (cpf life/rss)....

They shouldn't. Let's just dispense with that one. They're still working, you're receiving a cash allowance, and payouts would be low and/or short duration -- VERY low/short in your father's case especially.

question about dad case.. lets say if he stick with RSS, with the minimal payout of 250, assume last about 4 years.. if convert to cpf life.. the minimal payout still remain as 250 and last till he past away?? or CPF-life payout got no such thing as minimal 250 like RSS.. Else seems like too good liao.. haahaa

Of course not. Obviously at his current balance he'd get a much lower monthly payout, but it would last for life instead of a mere ~48 months.

As other posters have mentioned the basic issue they both have, but particularly your dad, is not enough principal. Fix that, please, if at all possible. That's the best thing you and your other family members can do from a CPF point of view, and the government's offer is excellent -- tax relief, bonus interest, even CPF Matched Savings Scheme (probably). Lift him up, lift them up.

*Edit.. i tried the life estimator, dont let me put 12000 at age 67 to see the payout.. need min 40000.. but i thought cpf life got no min sum to join .. hmm

CPF LIFE has no minimum to join. However, there is a maximum age to join: age 80. The practical maximum is a couple months before 80th birthday since it takes a while for the CPF Board to handle that conversion. Obviously if your father can only get a ~48 month classic Retirement Sum Scheme payout period then he's not going to get even close to age 80 to be able to switch to CPF LIFE, and the switch is based on the remaining RA balance at that time. So let's suppose you help raise his RA balance, then he gets to something like a 12 year $250/month RSS payout. THEN he decides to switch to CPF LIFE at age 79.8. Would he like to live for the rest of his age 80+ life at $5/month (or whatever)? No, probably not. So as a practical matter it's best to make a CPF LIFE joining decision before starting any payouts. But that's still in the future, and they'll have some more information about their health situations as they get close to that payout start date -- age 69.8 for example.