No more 'shielding' of CPF soon?

I found out that people were exploiting a loophole in the CPF system back in 2017 and at the time, some people told me it wasn't a loophole and that it was working as intended. 

I am referring to what is popularly known as "CPF Shielding" where members who have ample funds in their CPF OA drain their CPF SA funds just before turning 55 years old so that their CPF RA will be made up of money from their CPF OA instead. 

Shortly after turning 55, they will refund money to their CPF SA so that they will enjoy higher interest income from their CPF savings overall. 

This to me has always sounded like a loophole as the CPF is meant to help the masses and in particular poorer CPF members. 

See: 

The purpose of the CPF is to make the rich richer? 

This is why there is a limit on CPF annual contribution. 

This is why we cannot do CPF SA top ups once the prevailing FRS is hit. 

This is why upon turning 55 years old, the first 30K of our CPF savings enjoys additional 2% interest and the next 30K of our CPF savings enjoys additional 1% interest. 

This is to help members who have lower CPF savings with retirement funding.

The CPF system is not meant to make the rich richer. 

CPF members who are able to do "CPF Shielding" are those who are better off financially and they should not be overly reliant on the CPF to fund their retirement. 

I know many rich people who would like to park more money in their CPF accounts but they are not allowed to. 

Rightly so. 

Let the CPF system help those who need the help most. 

See: 

Unfair FRS and ERS' payouts compared to BRS. 

Unfortunately, very often, people who need the help most are the most stubborn.

They would resist the CPF system instead of making use of the system to help themselves. 

See: 

A river called "CPF" and the stubborn horses. 

I said this in 2018 in reply to a reader's comment on "CPF Shielding" here: 

"The more people talk about this, the more people do this, the more this loophole could be plugged." 

AUGUST 17, 2018 AT 5:44 PM 

Source: Exploit the CPF... 

It seems that this is finally happening. 

"The days of exploiting loopholes in the national retirement scheme could be over soon, after the Central Provident Fund (CPF) Board posted a warning on its website. 

"In particular, it is taking aim at the act of "shielding", which is promoted by some financial advisers to circumvent the transfer of funds from members' Special Account (SA) to their Retirement Account when they hit 55." 

See: 

No more 'shielding' of CPF soon? 

The last time I blogged about "CPF Shielding" was in December 2019. 

See: 

Maximising CPF savings. 

I still think that the CPF can be our best friend in our golden years but our best friend does not appreciate being exploited. ;) 

References: 

1. CPF can be our best friend.

2. How to grow our CPF savings?

3. 4 ways to boost our CPF savings.

"Good time to buy now or should I wait?"

This blog is a reply to a reader's comment: HERE. 

Whenever readers ask me if it is a good time to buy something, I get the shivers. -.-" 

I don't know what Mr. Market might do tomorrow and, so, I don't know if the price will go up or down. 

I do not have a working crystal ball.

However, I have a very dusty bowling ball that sometimes thinks it is a crystal ball.

You want? ;p

As long as I am satisfied that something is an investment that will generate a fairly attractive and reliable income for me, I buy some. 

Past rights issue shouldn't matter to an investor today.

He should look at today's numbers and decide whether it is an investment that will deliver what he is looking for or not?

We might have different requirements and certainly different circumstances. 

So, it is probably not a good idea to ride on someone else's coattails, no matter how famous that someone is.

We can always wait for prices to plunge before buying but prices could appreciate instead. 

It might also be many years before Mr. Market goes into another depression and we would have lost many years of income.

This is why some say time in the market is more important than timing the market.

To buy now or to wait, it depends on whether you feel IREIT Global fits your plan and whether it meets your minimum requirement from an investment. 

If you are interested to get a glimpse of my investment philosophy, read this blog: 

Investment philosophy... 

"I emphasize that I will not tell anyone if they should or should not buy anything. 

"I am only sharing my philosophy and experience in my blog. 

"I am not here to make a decision for you." 

There are also some relevant ideas in these blogs: 

1. An exchange with AK on REITs. 

2. Undervalued but is it a BUY? 

3. Sell now and wait to buy lower? 

4. When to BUY, HOLD or SELL? 

5. Eagle Hospitality Trust: Extinction?

Beware of scams!