As from April 2013 my Journey in Investing is to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

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Saturday, 8 August 2020

CPFIS after 55. To close or NOT to close? (2)

Read?  CPFIS after 55. To close or NOT to close?


The decision to close CPFIS after 55 can be based on dollar and cents in order to make financial sense.

Every counter held in your  CPFIS account incurs $8.56 custodian fee per year so there is cost or saving involved to compute.

How to decide to close or not after 55?

Your size of CPFIS really matters!

Any money refund from your CPFIS will earn 2.5% interest p.a. Does annual interest earned far exceeded the total custodian fees?

Yes or no?

You need to do your own Maths! Bo pian!














24 comments:

  1. No hurry to close your CPFIS after 55. Just take your time since you can close any time. Any time is a good time. LOL!

    ReplyDelete
  2. i closed when i was 55; imagine how much 2.5% interest i would have had until now. i mean when i had to park extra cash somewhere.

    Especially now, Bank interest rate KNS, where to park your spare money leh?

    ReplyDelete
    Replies
    1. If you close CPFIS, and there is still money in the OA since you only use 35% to buy shares, you still earn the 2.5% interest for the remaining 65% and can withdraw the intetest anytime. Tio bo?
      If tio, then as long as the dividend from the shares that was moved from CPFIS to your CDP pays a dividend higher than 2.5%, where is the loss? I sometimes get the impression that closing CPFIS is a big NO NO.
      I am not 55 yet so no experience and hope to learn and clarify.

      Delete
    2. There are many GLC amd banks corporate bonds that pays more than 2.5% coupon. Keppel, Sembcorp, Mapletree, Ascendas, etc, if one subscribe it at launch. 2.5% a big deal? I sometimes get the impression that withdrawing from CPF to invest is another No No. Goalpost can change while corporate bond has a liquid market. Condition is $250K to subscribe 1 tranche.

      Delete
    3. More of Barbell investing strategy i.e happily earning bond like 2.5% ROC while waiting for bigger investing opportunity by Mr Market for N X 2.5% ROC.

      If we are happy with anything above 2.5% ROC then it is better to withdraw CPF SA and OA after 55 and invest on our own.

      Delete
    4. Tio and boh tio

      In my case i withdraw everything that can be withdrawn.

      But U are right my OA, Ma still there, even withdrew all the money from OA. So actually U can only close CPFIS.



      Delete
    5. Uncle x2, I am just exploring and sharing since I have invested in bonds which I find more flexible and liquid when I suddenly need to "run road".😂 No right or wrong as long as the strategy suit the person. 5 taps of early retirement. 🤣

      Delete
    6. Uncle Temperment, OA is still there after you withdraw everything. Confirm boh ? Or need to leave $1 inside ? 😂

      Delete
    7. Just to be a clearer, U can not withdraw all the money in OA if U don't close CPFIS 1st. But OA still there because from time to time Ko, Ko, happy gives U a little top up money.

      Delete
    8. Also when i used my MMS to join CPF LIFE after conversion, there is some left over money in OA or RA.
      This money is to be topped up to CPF LIFE monthly. Only about 10+

      Sigh!

      Who can really know how complicated our CPF is?

      Plus goalpost can be shifted one.

      Ha! Ha!

      Enjoy your CPF's like discovering something in walking in a maze game.




      Delete
  3. So i have asked my wife's not to touch her CPF & CPFIS until now.

    In this way, my wife is so much richer than me lol.

    My money is her money, her money is her money (aka who can touch her CPF money)?

    And i manage all family's investment matters as my wife is not really interested.

    But i always keep her UTD and share with her why market like this and like that. And why at times i make mistakes. Who doesn't in the stock market?

    The reason is if i go first(as nobody but only God knows), at least she is not totally in the dark-helplessly unprepared.

    Totally unprepared in the dark is quite frightening to anyone,u know?

    ReplyDelete
  4. Dividends from shares are also autocompounded at 2.5%?

    ReplyDelete
    Replies
    1. All refunds from CPFIS including return of capital + P/L continue to earn 2.5% as 65% fixed income and 35% war chest for re-investing. May be this is the down side of refund i.e. forced asset allocation.

      Delete
    2. 65% is safety net, if you screwed up on 35%

      Delete
    3. Yes, a kind of forced safety net otherwise may invest all the money.
      Tempted to close CPF many times because of this forced safety by CPF rules.

      Delete
  5. On the other hand, can't ignore classic text book advice-Asset Allocation.

    There is no 100% sure win investment especially the economical and timing cycles.

    Now Gold heats new peak again after so long, so many years.

    Still who can be sure?

    B or S now?

    ReplyDelete
  6. Actually gold can be considered as a de facto currency.

    So when US dollar too much floating around, Gold naturally swims to the surface too. Too remind U, since time immemorial, i am still around to help when there is war, Economic chaos, persecution (remember Vietnamese Boat People), and who knows what next with more and more US dollars issue to the World?

    In fact i read America has 1st time, become the first lender to her favoured countries of the World.

    What's going to happen to the only Reserved Currency of the World?

    ReplyDelete
  7. With zero to negative interest rate now, there is no penalty for holding gold.

    i think more people will have second thoughts because zero to negative interest rate will be around for quite sometime.

    ReplyDelete
  8. Still have not sell my wife's unwanted decade old jeweleries.

    Actually this time almost sell because of getting really old already but then with COVID 19 and unlimited QE, almost tempted to buy instead of sell.

    But tell myself no need to be so greedy as nothing is 100%.

    Better wait a little while then sell as intended.

    After all trying to sell all these years without success.

    And the reason must be due to greed or still cash flow positive until now?

    Shalom.
    Amen.

    ReplyDelete
    Replies
    1. I've sold a bit of paper gold to get my allocation back down to 15%. The recent move is too parabolic; maybe a painful correction in the sort term (in terms of 2-3 months).

      But I think the big crazy moves in precious metals (silver is crazier) will be over the next 1-2 years, but with big -20% corrections along the way.

      If so, other risk assets like emerging markets, Asia, Singapore stocks will be chionging too.

      Delete
  9. i think by historical data shows Gold will retreat when stock market suddenly collapses. Contrary to popular belief Gold is inversely correlated. But of course there are many other factors we don't know.

    Lately, Market Gurus said more or less the same thing if Market suddenly crashes, a lot of people will have to sell Gold to cover their shorts in the stock market.

    Then the cycles repeat, i suppose.

    Now do U believe there is a season for everything under the SUN?

    And who say so?

    The Good Book said so.

    Want to do B/B cycles investing?

    LNL=Cantonese saying, "Ni Lum Ni"

    Ha! Ha!

    ReplyDelete
  10. You can withdraw investments from cpfis and transfer to cdp right? Then you will save the custodian charges.

    ReplyDelete
  11. i think anything transfer out from CPFIS are not allowed to transfer back.

    ReplyDelete

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