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Retirement

Making sure you have enough for the later years

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CPF

Property

Retirement

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Level 5. Genius
Updated 2d ago
I would say do RSTU, then if you have balance, SRS. 1) You will definitely need to elect the CPF life payout, so might as well hit FRS first to ensure a good payout. 2) Once the medisave hits BHS, excess is channeled to SA unless SA is at FRS. When SA > FRS, the excess of medisave contributions go to OA, which you can use to build more buffer for the HDB. 3) Once you hit FRS, that would mean the amount in your OA can be withdrawn. This is the most important reason I am pushing this direction, because you can withdraw the excess from OA at 55, versus 62 for SRS (could be later in future). At 55, you could a) withdraw from OA to fund tertiary education for your kids, b) if no need, take the OA as a spare bank acct earning 2.5% for doing nothing, or... just enjoy life. 4) 50% of SRS withdrawals will be taxed. CPF built up balances attract no tax. 5) A lot of folks may not know how to invest properly using SRS. At 4%, the SA offer an interest rate that even the current dividend yield of STI etfs cannot match. It is very very very difficult to consistently beat risk free 4% over 10+ years.

CPF

Retirement

If it's me, I won't. CPF top up is one-way. Holding the cash currently has many benefits for you at your age group. You may need cash later on for higher returns, or life events, and you can't plead with CPF board to return your cash. You are so young that it is almost certain you will have better use for cash in a few years time (or shorter). Some examples of a potential higher returns: 1) recession, stocks at cheap price compare to valuation 2) opportunistic event to snap some assets at a bargain price (such as stock options in your company, cheap property take over, assets at auctions) 3) IPO of certain favourable stocks Life events that will certainly need cash: 1) marriage 2) first property 3) emergencies (both bad and good types) 4) business start-ups. Your tax liabilities are also quite low, wait till it reaches a much higher bracket the savings are more reasonable for locking up funds.

Lifestyle

Savings

Family

Retirement

Investments

HDB BTO

CPF

Hey Anon, Its alright if you are financing your flat solely on CPF for now. Address one area at a time, in the future when your cash flow allows, you can always review your financial situation and work from there. It’s okay not to have a lot of savings for now, but make sure it is growing every month, set aside 20% of income and split them into different instruments. Add another 5% for your child’s education planning. If you do not have 6 months of income as emergency fund, make sure to work towards it too. Communication and clarity will a good first step towards financial planning. Talk to your husband and be clear of what each individual is aiming for and as a couple what are your goals. Speak to your advisor and have a professional opinion. If I can sum up, as a very basic guide, just ensure 10% of income goes into wealth protection (insurances), another 20% into savings, you can put them into different instrument. 5% towards your baby girl education. 😊 Try to keep expenses to about 50-60% of income. speak to an advisor to get professional advice too.

Retirement

CPF

SeedlyTV EP06

The SA floor interest is reviewed yearly so you are right to say that it can change in future. I would instead look at the approach of looking at your assets and determining how much you would project to have in both guaranteed and variable asset classes by your retirement age. Let me share a little more about my own plan. If you are comfortable to have your monies locked up in CPF, then CPF SA top ups can be one option to help you reach FRS faster. I am doing this myself as I am also looking at the tax savings and banking on the compounding effect of contributing more when I am still young. Seperately I do have a private annuity as I retain control of when I receive my retirement income, as well as for how long. This will not be impacted by any changes to CPF regulations. I am also ensuring that I have additional long term care coverage as my annuity has that feature build in. (Careshield life might not be enough for me) These two items form the cornerstone of my guaranteed income sources in retirement. Based on my calculations with provisions for inflation they will more than adequately provide for my needs. For my wants, I have stocks and UT, but as there are no guarantees on those, I won't elaborate too much, other than to say that even if I make wrong investment decisions, I still have CPF and my annuity to fall back on. If you'd like to get an opinion on your strategy of efficiently deploying your funds into the various asset classes, feel free to reach out to me at [email protected]

CPF

Retirement

Family

Tough questions, which no one can answer for you. But generally, if you are worried about outliving, CPF Life is better because there is no risk of outliving your monies after age 91. RSS has the risk of you outliving your savings by age 91. if your focus is on gains, then it's debatable and no one has a good answer. the best is to look at Kyith from investmentmoat article on IRR for CPF LIFE. https://investmentmoats.com/uncategorized/cpf-life-greatest-return/

Investments

Savings

CPF

Retirement

I think you have a misunderstanding. RSTU is just a transfer which allows tax relief of up to 7k per year, till FRS. Buying a BTO requires a 10% Downpayment (for HDB loan) or 20% for Bank loan. Only OA funds/cash are allowed to be used for housing payments. SA remains stuck and can't be used. Not sure if I answered your questions.

CPF

Money FM 89.3 Show

Savings

Retirement

No right or wrong answer, but I do advocate ERS if there is sufficient liquidity elsewhere. For example, if you have something like $1 million in liquid assets, increasing your SA to ERS will only require $88K if you are 55 this year, which is a mere 8.8% of your asset base. The trade-off is that it is a one-way thing, so you will only receive the money back in the form of CPF Life payouts. However, a guaranteed life annuity with this kind of payouts backed by an AAA-rated government is practically impossible to find, so it is a trade-off between having control of how you generate income from your assets or relinquishing part of the control to CPF. I often find that if one has easy access to liquid funds, they usually don't last very long since we tend to under estimate our spending patterns. Consider your risk appetite, existing income assets, and ability to manage your investments before taking any action.

CPF

Money FM 89.3 Show

Savings

Retirement

Family

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.

Family

Savings

Retirement

Insurance

Your question was not very clear anon, what would you like to speak to them about?

Investments

Retirement

Funds and Annuities. Funds to build a globally diversified portfolio and annuities to stretch the tax discounted withdrawals from a fixed 10 years to whatever the length of the annuity product. As long as your yearly withdrawal is below 40k and you're not making a taxable income elsewhere, you'll get tax free deductions.
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