My thoughts on the NEW CPF changes: No more CPF SA Shielding
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- เผยแพร่เมื่อ 17 ก.พ. 2024
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Budget 2024: CPF specific
1. Contribution rates for age 55-65 increased by +1.5% in 2025 (good)
2. Maximum Retirement Account increased to 4x Basic retirement Sum of $426,000 (good)
3. CPF Special account will be closed: SA will be transferred to RA up to FRS. Remaining SA goes to OA
What is the real impact?
Assuming you have $300,000 net in SA at age 55 in year 2025
$40,000 is reserved and will be transferred to RA
Net $260,000 was planned to be shielded
Before: 4% * 260,000 = $10,400 per year
After: 2.5% * 260,000 = $6,500 per year
Difference of 1.5% = $3,900 per year
Multiplied by your remaining years of life
e.g. 30 years till age 85 = 30 * 3,900 = $117,000 impact
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The lesson here is, the Government is actually oblivious to the on-goings on the ground. So if you notice any loopholes/gaps in their system which you can benefit, just STFU and don't go round talking about it. They will just close the gap to make themselves look good for their past lapses and suffer the people.
I think you’re right in saying that the main takeaway is we cannot depend fully on cpf for our retirement. I’d actually go further now to say that cpf shouldn’t even be a core part of my retirement planning cos I have no idea what the system will look like 30+ years down the road. If anything, it’s a wake up call to be self sufficient and manage my own retirement and if I get something from cpf next time then it’s a bonus. But I cannot have a system that’s so prone to changes form the underlying safety net for my retirement.
Unless renounce citizenship and get all amount from cpf accounts
I don't think there is a need to blame anyone. The government is there to plug any loopholes. Same as the 2nd property no absd or decoupling. Moreover, all the financial videos out there should be treated as references, everyone should do their own homework.
I got to know Chris's video about 2 years back and did considered topping up but after researching a bit more, I realise it did not suit my circumstances. Hence I did not top up or transfer OA to SA. I know it's tough, but the silver lining is that you did not actually lose those money (capital). It is still in your cpf. A lesson learn is a wisdom earned.
Continue on the good work Chris.
Another great video & content - thank you
Another great video! Just subscribed.
Govt did the right thing by closing the SA and ending SA shielding, should have done it years ago, only the rich benefit and most dont
Pls define rich. Are u saying people like Chris are rich just because he is prudent with his expenses and try to save money into SA?
For everyone, as long as they work diligently without taking break from work since the day they graduate, they would be able to reach FRS at 40+.
Statistics have shown that many more youngsters can achieve FRS at 40+. You could be able to achieve this as well.
Maybe maintaining SA with a limit of 100k is a more balanced approach.
Having more than 200k in SA is not rich at all. Many people above middle class, working and living in SG has it. Please keep your jealousy of others more successful than you away.
Then cap the amount of the monies in SA that is interest bearing to FRS.
Free float to govt, win win
No matter how much c p f cash are still the KING, instead of retaining more cash for survival this changes are definitely a shot to many local breed who are working day to day to make ends meet and waiting for the day to see the fruit grow bigger but before members can pluck it the worms already rotten it.
The scary thing is that you do not the payout @65 until 65. What if CPF changes rule again that the payout after it starts will reduce due to this and that. CPF NEVER says it is guaranteed. Beware !!!
You can't expect rules to remain same forever.
Great analysis. Thank you, Chris. Looking forward to your following videos on this topic.
SA Interest rate can be redesigned to a decaying method once you reached your FRS or when you attained it in the early age whichever come first.
Now that SA is taken away, people aged 55yrs and above, eager to earn more interest will withdraw large sums of CPF monies. Making them vulnerable to scams and risky investments . Newspaper headlines aplenty. How is the govt protecting the senior's retirement funds with this sudden change in policy.
Why no mention of interest from MA to OA if MA amount is maximum?
The master of CPF savings has come out to give his thought 😊
It is very unfair those 55 yrs old and above as they cannot reverse their decision. Cpf sa is good for those up to 54 yrs old. Cpf life choose bare minimum.
Are you above 55 yet? I am above 55 and have been using SA as ATM machine. Not a big deal because most of SA was transferred to RA when I turned 55. Going ahead OA offers similar liquidity.
@@scbchong6964 I am 55. My Sa is generating 5k interest yearly that I can use after ra lockup. This equivalent to 10 times the $500 CDC that I get to use every year. You say big deal or not leh? You comparing oa 2.5 % to SA 4%? You are crazy or your brain got hemorrhage.
@@scbchong6964I am above 55. My Sa is generating 5k interest every year which is 10 times the $500 CDC voucher after ra lockup. You say big deal or not leh? You comparing oa 2.5% to SA 4%? Either you are crazy or your brain hemorrhaging.
Can answer: What should the different age groups of people do now?
4 times BRS( ERS) 2025-$426k at age 55. Assume someone pass away at age 65( just before receive any payout), will CPF refund $426k or 640k with compound interest ( approx)? Anybody can advise ?
I am 60 yrs old, opted for BRS when I was 55. Still working, will my current SA goes to OA or RA in 2025?
It also means that all employer CPF contributions will go into OA after 55.
hello, I intend to use my SA money (when its transfer back to my OA and i withdraw as cash) to pay off my remaining housing refund, in this way at least I got one task off my load. plus after the refund, it will be back to my OA acc. I am not a risk taker so not into investment.
Bang I a Singaporean below 55 and I honestly don’t bother my CPF as I don’t depend on it.
endowus to invest in indexes or buy house for rental or...
theres better option but riskier than 4% sa
Hi, after this CPF change, do you still recommend topping up MA first or focus on SA to hit FRS asap?
now that there is this change, i'm sure it will make more sense to top up MA first..
@@EZJRVCXYwhy leh? is it because the interest from top ups to SA is reserved only for RA? But interest overflowing from MA can be transferred from SA to OA?
agree@@EZJRVCXY
u think he still dare to recommend meh? CHUI
LOL to me it doesn't make a difference, because i don't need CPF to retire, and i will withdraw all my CPF, perks of P.R status @@garlicbread68
The impact will be a Good topic for Money No Enough 4 down the road. Jack Neo can monitor the impact.
The title is Money forever not enough !
In my opinion,they should have knew way before hand or even at previous policy planning stage. The key here is, the number of people making use of this hack. Secondly,you can ask yourself if this hack was not wide spread in the online space, you think how likely the MP would bought it up?
So will there be BRS
Yes
Can ask if a person pass on at 64, will he get back his RA plus interests?
RA interests belong to the central pool.
question: say 55, no more SA, all flow to RA. Extra cash go to OA, what can we do to use this OA? Invest invest but end up can do what? Buy house?
Once you hit 55, the new OA become the old SA. Means you can withdraw money from OA. Main difference is that you no longer get 4% interest but instead now get 2.5%.
Honestly, the change is matter of time because we can't expect "bank" to give high flexibility and high interest rate at the same time. Just look at savings account vs fixed deposit. The same logic applies here.
@@7error8lade ahhh I see~ thank you for clarifying~
Why change the SA if only as little as 2% benefits from it?
Because those of us born in the 70s and 80s will be becoming seniors soon and there are more CPF millionaires in this group (as compared to the pioneer and merdeka generations). Hence it's about time to make this change, ensuring money is redistributed to those who need it more.
@@MH-ob3pj
If the 98% requires 2% to distribute, I'm really worried about what lies in the future.
I have my personal property + FRS in my SA at age 34.
I think it is wiser to get property 1st.
Nothing is risk free, no one can predict if a change of system or Sg goverment in the next election but as least one has a roof over one's head even if the entire CPF crashes.
SA closure should have been discussed as an election issue. Cowardly leaders quickly pushed it through thinking we will forget it by voting time. I will not forget. Am v upset and angry with PAP and those now reaching 55 this year are going to suffer the most.
Hi Chris, given your immense knowledge... Can we still withdraw the excess in SA (above FRS/BRS) transferred to OA? If so, then the government is just trying to tell citizens to be their own fund mgr to achieve 4% liquid returns?
If not, then really suck thumb for people who chiong FRS via RSTU??
Yes, you still able to withdraw your excess SA transferred to OA.
@@user-jc6fi6yg8r from age 55 onwards? Or must wait to which age? Thanks.
@@go2c yes, the changes mentioned is after 55, SA money will transfer to RA(FRS), remaining money will go into OA, and you can withdraw the money in OA 55 onward. RA withdrawal remain unchange.
4 times BRS( ERS) 2025-$426k at age 55. Assume someone pass away at age 65( just before receive any payout), will CPF refund $426k or 640k with compound interest ( approx). Anybody can advise ?
yes, will be refunded as bequest.
How do you come up with the 260K shielding? The FRS is only 205K. Minus the 40 minimum in SA, only 165K would have been shielded?
Appreciate your explanation.
Thanks.
As long as we are working and contribute CPF, SA will exceed FRS.
@@kcchiew4247 NOT everybody.
@@stevenyip2631 I had exceeded minimum sum in SA around 2009. Last year when I am 55, I got more then 300k saving in my SA.
I thk host is saying $260K shielded from going to OA from SA from 2025 onwards.
@@Jun_Hui175 No, that's not it. Better let him explain.
I will withdraw all OA and all after FrS.
Previously people can top up money in the SA. So now people can no longer make use of the SA to
maximise the gain by topping up this account and then draw it all out at age 55.. now; meaning the SA high interest rate of 4% could bankrupt the government if everyone draws out their SA money at age 55 instead of transferring the money to RA, so some people retirement account will not have enough money for retirement..am I right.?
yeah "you should worry about yourself first" is right. I think we shouldn't be looking at each other's bowls to check if we have more than each other but to check if others have enough
Can't juice the government anymore.
In summary, social media only benefit the content creator and the gov. One get the viewership and the other get the loophole check.
Just realized that once you started to get monthly payout from CPF life, you won’t be able to see your money in your RA account. Anyone know this? How we know how much $$ we’ve left ? I realized that cos my parents are now take monthly payout. 😢
You do not need to know as CPF life payout is lifelong as long you live
Before you reach 65, try to check the RA amount. It will stop earning interest once you started the monthly payout.
Example: $300,00 at age 65
Monthly payout: $1500
If you live 15 years, payout will be $270000, then the balance of$30000 will be distributed to your nomination
Please correct me if I am wrong
The interest you earned from 55 to 65 will not be given to beneficiary if you have started your payout. Your beneficiary will get (amt in RA@55 - payout you have received so far). Interest will go to a common pool to support ppl who live longer
@@TayChyehock Hmm where did u read that it will stop earning interest once the monthly payout is started? Can quote?
@@TayChyehock I don’t agree with that we do not need to know much is left in the CPF life. I think transparency is important for all parties especially if I passed away 2 or 3 years after the payout. At least my spouse etc knows how much is left.
And @dovetofree mentioned that interest in RA from age 55 to the day we start the CPF life payout, will not be given to our beneficiary. Then I think it’s even more important to show us how much we’ve used. Are the payouts from the CPF life from our principal sum or mixture of both (include interest earn)? If only from our principal sum we put in, then why do we wanna put our $$ in RA?
Also I’m wondering can RA account still continue to earn 4% after the CPF life payout starts, if we top up with cash or transfer from OA? If not the RA is redundant. Why don’t just remove the RA account instead the SA? Just wondering.
@@Xamael666 The interest will be channelled to a common pool to support those who live beyond a certain age. Your beneficiary will not get any interest. The link: www.cpf.gov.sg/member/infohub/cpf-clarifies/clarifications/4-facts-you-should-know-about-cpf-life
No true. You can bring all to the new ERS which is now increase. You
Lost liquidity . If you bring all to ERS, you still get 4% . You don’t have to do shielding .
Do note, the interests in the RA doesn't belong to you. It belong to the RA pool, while interests in the SA, is belongs to you.
But I angry why we cannot depend cpf for ur cpf. Ain’t gov want us to retire with it!?
No point topping up haha
Why should you apologise? No one can foresee policy changes. Look at how many times absd has increased. Every newbie investor need to take responsibility for their own decisions and not blame those who are teaching you for free.
So, are you trying to saying you are the guy who tell the government to close this RA.
This CPF changes cannot be attributed to SA shielding takers but more towards our reducing work force population in years to come and uncertainty in investment arena that is proving to be difficult for institutions or government to guarantee risk free interest at 4%. Therefore, the cancellation of CPF SA account diverts our funds to choose to be locked in with higher interest or flexible with lower interest. In fact, if we use risk free OA account at 2.5% pa, its consider not too bad too.
They changed rules cos they dont benefit a thing or cannot ....
That there will only be three and not four accounts was foreshadowed by the CPF logo.
I had been transferring SA to RA whenever my SA had $$$.
What is your reasons for the transfer ?
@@paceskate I find SA redundant since I also get same interest in RA. Just consolidate under RA and slowly enjoy my monthly pay-out.
vote wisely.. don't rely on CPF, best is if you can withdraw everything aka migrate overseas!
No SA so what? SG always good news one. Just say Bo Bian lor. Don't say Bo Jio🤣🏳️
U play play your CPF, Now government play u
Government are not stupid. He is watching 👀.
Because of new comer Business such as bullets trains is launched ........
My comments was deleted. I got 2 comments from people that want to know reply. Admin you want to post but do not want me to comment? You shld scrap your TH-cam channel for being intellectually dishonest.
What is your previous comment?
@@xykota6692 ask the admin to release it.
Your video is very good but the problem is that your video is not SEO, that's why your channel has less audience. Don't worry I am TH-cam SEO expert, I can help you.
I am waiting for your reply.
Thanks and Regards..