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I had created an excel file in Year 2000 to track my current CPF balances and amounts withdrawable at Age 55. It even estimates the annual interests expected to be deposited going forward. Updated many times a year till today and still going strong.
ReplyDeleteCuriously, after 17 years of reading up all things CPF, I'm still discovering new small prints and sub-clauses in the CPF Scheme.
Any examples? I know shifting goal posts for CPF SA or RA but not for CPF OA
DeleteFor example, a couple of months ago, I sold some stocks bought using my CPFOA under the CPFIS Scheme. As my CPF balances had not changed over the past 1 year, I assumed the entire proceeds from the sale could be used to buy stocks again. And so I proceeded doing just that. To my horror, the broker called me up to inform that some of my new purchases had been rejected due to insufficient investible funds. A call and an email to the CPF's CPFIS department yielded this statement that I was never aware of before:
ReplyDelete"For your information, if you were to sell your shares, your stock limit will be increased by the cost of stocks sold and not the profit made. After the sales, you may buy other shares subject to the adjusted limit."
It is the same as I know of.
ReplyDeleteI always check my CPFIS investment account's STOCK LIMIT REMAINING before I proceed to buy any stocks under CPFIS. It stated there.
I know about the updating of stock limit. But it's so tedious to ask them to update each time I sell some stocks. And the process takes many days. Also,one tend to logically assume that since I sold $X of CPFIS stock today, I would be able to buy back $X of stocks with the money received from the sale. But their rule is that if one bought $1k of stock and sold it for $10k, only $1k is re-investible.
ReplyDeleteI also have a few endowment policies, some recently matured. But I'm not even clear what's the quantum of the total surrender value they used to compute my stock limit. Because most of the OA money that returned to my CPFOA cannot be used for stock investment and are stuck there at 2.5% interest.
I use UOB CPFIS account and no issue with the update on next working day after sales credit on T+4
DeleteCW,
ReplyDeleteYour peers definitely are "savers" or those who do voluntary CPF top-ups. When you have no clue what to do with investing, why take money out at 55? Let it compound safely in CPF mah!
That's also the tyre meets the road test for those who parrot "buy term; invest the rest". If you know hot to invest the rest, shouldn't you take money out from CPF and invest the rest?
Example from CPF: https://www.cpf.gov.sg/Assets/members/Documents/INV_AnnexB.pdf
ReplyDeleteSeems like if want to use the profits from stocks, bonds, gold for further investing of new stocks etc, need to first refund back to OA for CPF to re-compute the investible savings by the 11/12 of following month??
As for matured endowments, becoz their returns are so low, hence even after refunding to OA, the re-computed investible savings & stock limit don't increase much.
Easiest just check ur online CPF statement before making investment moves.
Spur,
DeleteActually, all my CPFIS endowments returned 100% or more profits. Slow and steady wins the race. Endowments using CPF money are NOT ILPs so the returns are more steady. What's bewildering is last month I had one policy mature and I transferred all the proceeds back to CPFOA. But CPFIS Dept informed me that my Stock Limit remains unchanged despite the amount being added into my CPFOA. They tried explaining using the computed figures in my online CPF statement, but I simply couldn't get the logic. Because, logically if I had $X returned to my CPFOA, shouldn't my Stock Limit increase?
If you took out $10K for endowment, and now returned back $20K, all other things being the same, then your stock limit should theoretically increase by $3,500. But the increase is only reflected after the 11th of next month. At least that's my experience previously.
DeleteLaurence,
ReplyDeleteThat's why investing with CPIS has more strings and shackles attached.
Making money with CPIS is not easy oredi. If you belong to the 30% who made money, you are not "rewarded" with bigger account size when you sell.
Hence to take profits with CPIS, we need to think twice, think triple... The moment we sell, its like getting back to square one all over again... LOL!
Of course CPF will say CPIS is not meant for trading lah!
It forces you to "bank in" your profits each time you win. This way, its a lot harder to give back your profits if you get complacent by pyramiding up your trading size and lose it all in one big bet that turned sour :(
Ita for your own good!
Yes, daddy dearest!
LOL!
temperament,
DeleteI would like to take out my CPF as much as possible in 5 years' time when I hit 55 ;)
Actually its good for us when more and more people voluntarily add money to CPF.
This way, when I hit 65 and start collecting my CPF Life payouts, I can worry less whether CPF got money to pay me till 95 or not ;)
In any pension scheme, just as long more money comes in than goes out, we are good.
The trick is to be early in the queue ;)
temperament,
DeleteThose who start to collect from CPF Life further down the queue - cash flow OUT - that's the worry.
My queue number not the best, but not so bad ;)
If and when big daddy cannot grow our population to 7-8 million, and if Singaporeans have to go overseas to find good paying jobs due to stagnant economy (just ask any foreign colleague why they come to Singapore), that would mean less CPF contributions to the "pool" - cash flow IN.
My Greek experience was an eye-opener. Those who collected their FULL pensions 10-20 years before the Greek crisis happened were a lot better off than those who just retired during the crisis to find their "promised" pensions cut to halve or more...
Don't ask where's the money?
The politicians who made the promises were long gone...
Hahaha SMOL ... from today onwards, whenever we come across blog on CPF ... We should all extol the wonderfulness of CPF & encourage all readers to do top-ups!!!
Delete"Hey guys & gals ... Do you want to have 1 or 2 million dollars when you reach 55?!?
Let the govt do the work ... top-up your CPF!!! High interest rate accounts!! Better than the banks!!!" Kekekeke!!!
This type of snake oil ... govt cannot find fault!!! Hohohoho!!!!
Spur,
DeleteIt's good to have a diversity of views mah ;)
Can't be financial prudence if someone says something, we just echo, "Yeah lor! Yeah lor!"
You think why I come here when most of the time I don't see eye to eye with the fisherman who thinks he is an ant?
To test whether my thesis got "substance" or not, I don't seek to find people who agrees with me.
I invite those from the opposite side to tear my thesis to bits.
Steel gets stronger from the poundings between hammer and anvil ;)
This comment has been removed by the author.
ReplyDeleteNo worry. More and more listen to those few bloggers and do voluntary top up to the max.
ReplyDeleteThe CPF SA top up scheme is one of the tool for those who want to build/enhance their retirement fund via a steady and surely way. It is a long term 'investment' with AAA 'bond' rating.
ReplyDeleteIMO, the pre-requisite is that they must have sufficient contingency funds and adequate cash flow for their living expenses.
If do it correctly, the future you will thank you.
They are already very cash rich so turning some EXTRA SPARE cash into asset is alright for these people.
ReplyDeleteHow many truly understand this?
apa ini? lol
ReplyDeleteTranslate leh. :)