The email address in "Contact AK: Ads and more" above will vanish from November 2018.

PRIVACY POLICY

FAKE ASSI AK71 IN HWZ.

Featured blog.

1M50 CPF millionaire in 2021!

Ever since the CPFB introduced a colorful pie chart of our CPF savings a few years ago, I would look forward to mine every year like a teena...

Past blog posts now load week by week. The old style created a problem for some as the system would load 50 blog posts each time. Hope the new style is better. Search archives in box below.

Archives

"E-book" by AK

Second "e-book".

Another free "e-book".

4th free "e-book".

Pageviews since Dec'09

34,335,909

Financially free and Facebook free!

Recent Comments

FakeZeroCool commented on 1q 2025 passive income ocbc and alibaba: “Hi AK, thank you for sharing your thoughts. I am new here,…”
Jin_San commented on 1q 2025 passive income ocbc and alibaba: “Dear AK, I enjoyed reading your blogs and YouTube series,…”
Hongjin commented on 1q 2025 passive income ocbc and alibaba: “How do you encourage retail investors who are not equipped…”
mitchell commented on 1q 2025 passive income ocbc and alibaba: “Clct financials getting worse and worse every single year.…”
LZ commented on 1q 2025 passive income ocbc and alibaba: “What DCF do u usually used for Alibaba, AK? i'm using…”
TH commented on srs portfolio in 2024 what did i do: “Hi AK, I have hit the max tax relief of $80k. Does it still…”
HappiSnoey commented on 1q 2025 passive income ocbc and alibaba: “Hi AK, hang in there! It will all pass… ”
fisher commented on 1q 2025 passive income ocbc and alibaba: “Take good care of yourself AK and look forward to happier…”
MPC commented on 1q 2025 passive income ocbc and alibaba: “Hi AK,Previously you mentioned that you may buy ireit at…”
Ss commented on 1q 2025 passive income ocbc and alibaba: “Dear Ak, Thank you for the post, truly appreciate it. Your…”
tzl commented on 1q 2025 passive income ocbc and alibaba: “Made a shopping list waiting to buy various stocks! Pls…”
Shaun commented on sold alibaba for 51 gain: “Hi Ak, I understand you are bullish on Wilmar given how…”
Shaun commented on sold alibaba for 51 gain: “Hi AKI understand you are bullish on Wilmar given how…”
Shaun commented on sold alibaba for 51 gain: “Hi AKI understand you are bullish on Wilmar given how…”
SN commented on sold alibaba for 51 gain: “Hi AK, with ST Engineering up 48% YTD, will you consider…”
Yue commented on 12m53 plan for cpf in 2025: “Hi AK, can I know the reason why you don't transfer all…”

ASSI's Guest bloggers

Why CPF only cares how much to take from our OA and SA?

Tuesday, September 20, 2016

The CPF is a tool which we should make good use of in planning retirement funding. 

How we make use of the tool depends on our circumstances.

Just do what we feel comfortable with. 


As long as we are approximately right, we will do OK.






Hey AK,

Thanks for sharing your thoughts although it can be very ambiguous and cryptic most of the time! 

I know how you are trying to not be made liable in case of anything here :)

In between our mails, I did actually drop by CPF Board to check with one of the counter people on my same ask.





So the long story short (correct as of today's goalposts) is that CPF only cares about how much to take from our OA + SA to setup our RA, in accordance to our choice of BRS, FRS or ERS, once we reach 55.  

How we get to that amount is none of their concern.

Yes, you may have addressed this previously or even known about it yourself but I must say, it's really assuring to hear it on my own from the horse's mouth.





Now, I'm even more motivated to get to my targeted amount I shared in my earlier mails by tapping on CPF's risk-free 4% p.a. rate. 

Of course, "downside" is that I can only enjoy at age 55 lah. 





Well, slowly lah hor... take care of my lowest hanging fruits first.

Like you said, as long as we're doing approximately right, we'll do OK :)

Have a good afternoon, AK!
Sincerely,
F

AK agrees with F, of course. 

So does my niece.




A present from my niece.
I think she is approximately right. ;)
Related posts:
1. Get the most out of ASSI.
2. A chat on CPF Top Ups etc.
"In investments, we go for low hanging fruits first. Why should it be different when it comes to planning for retirement adequacy?" - AK

7 comments:

Adam said...

Hi AK

I'd like to tap on your knowledge on CPF. If I have met my basic healthcare sum and FRS, where will my monthly MA contribution go to? SA or OA?

If it goes into SA, the extra interest over the years will be substantial. If OA.. not so much

AK71 said...

“Medisave contributions above Medisave Contribution Ceiling (MCC) will flow to a member’s Special or Retirement Account to help improve his retirement adequacy. This will help to increase the monthly cash payouts from CPF LIFE, which can be used to supplement his Medisave monies for his healthcare needs if necessary,” Associate Professor Faishal said in response to a question filed by MP Baey Yam Keng.

Source:
http://www.channelnewsasia.com/news/singapore/1-in-5-cpf-members-aged/2057788.html

AK71 said...

Reader says...
I wanted to top up in SA too to reach the prevailing FRS and benefit from the 4% interest gain at very low risk for several years before I turn 55.

The CPF officer told me the same that top up monies can’t be withdrawn regardless. Now I am confused.

AK says...
The CPF officer is confused. ;p

As long as you meet the FRS at 55, all remaining money in your OA and SA can be taken out at 55.

The FRS goes into your CPF RA at 55 and that cannot be withdrawn until CPF Life kicks in at 65.

Reader says...
That’s what I though too but she kept pointing to the same point and when I asked her what will happen to the amount above FRS, she just said it will remain at SA or OA.

AK says...
Frankly, I think it isn't going to matter.

You just have to imagine your top up money being in the FRS and the rest of your money, you take out at 55.

Change soup no change medicine? :p

DreamSeeker said...

Agreed with AK. I think I shall attempt to explain what happens at age 55.

Upon reaching age 55,

1) SA savings will be drawn into the RA to form the prevailing FRS. If SA savings is not enough to form FRS, OA savings will be drawn into RA to bridge the shortfall until FRS is formed. Any excess monies remaining in SA and OA can be withdrawn. This is mentioned by CPF Board and I quote: One can withdraw "$5,000 or your Ordinary and Special Account savings above $171,000, whichever is higher"

The confusion lies in the 2nd part.

2) You got to ask yourself if you want to withdraw monies from RA. If you don't, then status quo. No issue of top up monies to talk about. If you want to withdraw monies from RA. CPF Board says and I quote: One can withdraw "Any Retirement Account savings above the Basic Retirement Sum of $85,500, if you have sufficient property charge / pledge."

The "any retirement account savings above BRS" above excludes top-up monies, interest earned and any Government grants received.Let me use an example to illustrate.

Your FRS have $171,000 (Prevailing FRS)
You want to pledge your property for half the FRS 85,500.
Technically, you can withdraw 85,500 from your RA.
But if you top up your SA over the years via RSTU and this amount to 90,000 including accrued interest, you cannot withdraw the 85,500 as 90,000>85,500.
If your top up monies instead amount to only 30,000, You can withdraw 85,500-30000=55,500. The remaining 115,500 remains in your RA and cannot be withdrawn even though you pledge your property.

AK71 said...

Hi DS,

The BRS is not something I am considering and, so, I rarely blog about it.

Good of you to comment on it in such detail. Thank you. :)

WTK said...

It's too complicated. I think that it is better not to include the property in the computation.

Ben

AK71 said...

Hi Ben,

Haha.

I know you like it simple.

Simple is beautiful and easy for my simple brain too. ;p

Unfortunately, real life is not like this for most people most of the time.


Monthly Popular Blog Posts

All time ASSI most popular!

 
 
Bloggy Award