Other than adding cash to the till, how will topping up one’s spouse’s CPF Account benefit non-working spouses with low CPF balances? - Seedly

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Asked by Anonymous

Asked 1w ago

Other than adding cash to the till, how will topping up one’s spouse’s CPF Account benefit non-working spouses with low CPF balances?

Should I even bother if my wife is a housewife and doesn't earn an income or even has much in her CPF accounts to begin with?

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Ahh one of my favourite topics I cover with my clients in single-income households.

First the math.

Statistically, females marry a man 2-4 years their senior. And men on average die 4 years earlier than females do. So there’s a big possibility that a wife may have to spend 8 years of her life without her husband (sounds like a good thing, right ladies).

Ok jokes aside, why is this important?

Usually, females are the non employed spouse in the household. And CPF Life payouts are tied to only one CPF Member. There’s no joint account here.

That means if only the husband gets the payout, and he dies 8 years earlier than his wife, his wife will not have a stream of income to depend on from CPF if she doesn’t have her own payouts.

There are 2 ways to top up your spouse’s account. One would be by cash. And the other by transferring one RA balance to the other. The limit here is up to the Basic Retirement Sum of the year.

Example: Husband has 200k in RA. Wife has 50k. He can choose to transfer 112k maximum from his account to hers. Leaving him with the BRS and potentially a higher amount for her.

Is this enough, probably not, so for men with a non-working spouse, make sure you top up her CPF account and also plan above and beyond CPF Life.

I recommend complementing it with another lifetime retirement or annuity product for both of you.

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Elijah Lee
Elijah Lee

1w ago

Yeah, I do think it's a little strange that you can technically transfer until your spouse has more. I think transfer works both ways, but I feel the best way to optimize would be to have the female have a little more, since they tend to live longer, and hence would likely require more in RA to have the same payout quantum as the male. Either way, as long as both parties max out the first $60K interest, that will be the major point in the planning process. After which, both parties should look at achieving BRS, and then FRS, with the female maybe considering to have a little more to equalize payout. ERS may not be for everyone.
Hariz Arthur Maloy
Hariz Arthur Maloy

1w ago

+1 for that.