Some financially savvy CPF members used their SA to invest just before 55 so that the FRS is formed by taking monies from their OA first. After 55, they divest the investment in CPFIS-SA to enjoy the risk-free 4% interest in SA. What do you think of this approach ? And do you think CPFB should give CPF members the option to form the FRS by taking funds from OA first ?
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Christopher Tan
07 Jun 2019
CEO at Providend Ltd
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Hi Yee Fong, thank you so much for your question. So sorry it came so late as I had a busy 2 weeks. It is an interesting question that you have asked. There are possibly a few reasons why CPF Board first take our monies from CPF SA to form the FRS first.
I have heard of advisers asking their clients to invest their SA just before age 55 so that the FRS is formed by taking monies from their OA first. After 55, thei sell away their investments and the monies are then transferred back to the SA. While this is a loophole and seemingly a viable option, depending on what one invest in, one must be preapred to lose capital after the divestment.
Hope this helps!