Monday, 13 June 2016
Top Up CPF SA From CPF OA? Depending On Who You Ask! (7)
Read? Top Up CPF SA From CPF OA? Depending On Who You Ask! (6)
Read? It's good to be inefficient
CW8888 said well done to Brolp! Thumb up!
1. Channeling all our CPF-OA into CPF-SA to capitalise on the higher returns, especially when you haven't been hit by the financial bombs.
Yes, you do get higher returns but SA is not good for much use until years later down the road. In the meantime, there is the present to deal with. What happens if you run into employment issues and have problem servicing your loan? The transfer is irreversible. You can run a very tight and efficient ship but you need to be a very experienced captain who can foresee problems years before they crop up. If not, you sail fast but the moment a severe storm hits you, you're going to have a big issue.
CW8888:
For compounding our FUTURE money @1.5% more for some higher MONTHLY payout starting from 65/67 over the rest of our life is efficient; but be careful. Do the Maths, do we really have that EXTRAs to be put away as FUTURE money.
We can't follow someone's idea without knowing how FAT is their CPF OA.
FAT men can lose some fat; but can THIN men also do so?
The gap of laying our hand on CPF OA at 55 is 10/12 year to 65/67. It can be in lump sum or anytime once yearly, but the higher CPF Life pay-out is on monthly basis.
What if; tio Big C after 55?
Our thinking of future money of higher monthly CPF Life pay-out after 65/67 will change. May be we will regret that we/beneficiaries get so much lesser if we can't make it to 65/67?
Uncle8888 has been through the Big C and knows that CPF Life is not for him!
CPF-OA to SA... mmm.. technically it is more effective and efficient.
ReplyDeleteHowever, it has to depends on one circumstance.
Just don't fall into Asset Rich but Cash Poor.
I did the transfer once from CPF OA to CPF SA and on the following year I thought even harder. Is there second good reason to do so?
DeleteNo. Then I stopped and never look back.
My wife nominated to three children
ReplyDeleteMe --> Wife --> Three children (Cash distribution)
Will: Me --> Wife --> Three children
temperament,
ReplyDeleteI was scratching my head - what CPF EHS?
Oh it's CPF Enhanced Nomination Scheme (ENS) lah!
It's cool.
CW wrote its cash distribution to children; not CPF ENS to children ;)
If not, I would poke him until he cries, "Mother!"
Me --> Wife CPF ENS --> Children (cash)
ReplyDeleteNo Me -XXX-> Children leh.
I encouraged my wife to transfer all her CPF OA to CPF SA since our apartment is fully paid. We don't intend to upgrade. This would allow her to reach $161k in her SA by the time she reach 55. She will have a good problem to solve 10 years later.
ReplyDeletePlan in decades, think in years, live in days.
nice quote
DeleteAnother way of looking at it ....
ReplyDeleteTrf or contribute to SA when cash flow allows to churn interest for mortgage pmt at 55 as amounts in excess of cpf min sum can be withdrawn. By then can pay for remaining mortgage balance (if any)
I am all for transfering OA to SA aftering setting aside for housing loan. However, i am not for minimum sum top up scheme as the monies topped up will be locked into CPF life scheme. We know that payout eligibility age can only go up and i am not comfortable with that.
ReplyDeleteRecently, I moved a fair bit from OA to SA. The minimun sum grows at 3%, the SA account earns 4% interest. After a few more years of working, I would be able to satisfy the minimum sum just using the SA account and use the annuity as a basic level insurance against longevity risk. I cannot take it out, I might as well include it as part of my retirement planning.
ReplyDeleteYou are correct to point out that people who move money from OA to SA tend to have more balance in their OA. I have enough for my loan with extras in case my place goes enbloc.
The other person that I know who move OA to SA earns a very very substantial salary and is risk adversed. She make additional SRS and CPF contribution every year to minimum taxes.
Hope your enbloc is successful. I have >$161K in my SA and getting ~4% interest compounded annually for next 5 years. I will decide on the Basic Retirement Sum, Full Retirement Sum or Enhance Retirement Sum when I turn 55. In the meanwhile I will let time work its magic.
Deleteno need to decide upon 55, can delay a bit if you have FRS.
Deletei checked with CPF.