Great video. Yes policy and liquidity risk is extremely important and good point on not investing in something that you don’t understand. Many great men have fallen for the trap of fools gold
Mr Loo, I would like to say thank you to you once again for reminding us this very important idea of not to anyhow invest on things that we have little knowledge. Never do anything that you don’t understand in details. It is indeed true that many ppl are jumping into stocks and share with little idea on what is going on. This is due to the publicity advertisement that one can earn quick money through these channels. At the retirement age, one should not be using their hard earned money into investment if they hardly know anything. When one have little knowledge and invest, high chance everything will do into the thin air. At this point of time, cpf is still the safest platform for the citizen who has little financial knowledge to park their money. Don’t splurge it and later regret. Thank you Mr Loo!
Not everyone wants to work till 60 or 70yrs old. It depends on how stressful is the job. Number 1 killer is stress. What if suddenly doctor told u got only a few years to live will u still work? Likely people will feel regret they didn’t enjoy life enough if they know they will be dead in a few years. If one’s already accumulated enough money should retire early don’t waste your life away.
Don't be so lazy. Mr Lee Kuan Yew worked until in his Late 90s. His stress is certainly much more than any of you. Don't act and pretend like you're so entitled to rest. As a Singaporean, you are supposed to work until the day you die like him. 🙂
Great video Mr Loo. Most importantly is to quickly educate oneself, like yourself, as much as possible in finance matters. ERS getting locked up is real. I doubt government will be so kind to reverse the lock up. But I feel the percentage return for a cash lock up for 6% is not high. There are safer stocks out there with decent 4% return and capital appreciation too. Just have to be hardworking to shop for these stocks, of course with proper financial knowledge.
At the 8:18min, mentioned "(3,330*12)/(426,000 * 1.04^10) = 6.29% pa". The 6.29%pa should not be regarded like an "interest". It is like an interest + part of your principal given back to you. After x years, your principal will all be gone, given back to you.
Hi Mr Loo, if you discount the stream of payouts from 65 to 88 years you will end up with a rate of 4% to the RA amount at 55. The first year’s payout at 65 may seem high at 6.29% but because the annual payout is fixed, the return over present cost @55 will drop annually. (Eg at 66 you need to increase your denominator by another 4% etc). What is interesting is that the break even point for present value at 4% is around age 88 which is higher than the current life expectancy for males at 83years.
I already took out all my shielded SA come half year ago.. Bought into long dated Temesek 5.375% bonds in USD with effective yield to maturity about 4.8%pa. Good enough for me. Presently no good yielding safe bonds in SGD so will wait. If opportunity arises before I hit 65, I might just withdraw from RA leaving only BRS amount for CPF life. Then get another piece of decent yielding, very high investment grade long dated bond with that money. In my old age, I just need cash flow. No capital gains is ok
Mr Loo, I’m from an earlier cohort and I transferred my CPF to hit FRS. It has earned interest that would edge me towards the new FRS but I know interest alone wouldn’t help me reach it. I’ve always wondered how much more I needed to top up to reach the new FRS - is it the current cohort’s ceiling or mine when I was 55? I don’t know how to calculate the shortfall after deducting the interest I would accrue by then
Your FRS of 213k in RA after 55 still can be withdraw down to BRS if u have property to pledge. Pls dont mislead ppls. U can withdraw anytime after 55 ( before 65 )
*A good economic system is one where money is circulated, enabling society to spend and foster business growth. When money is kept stagnant in banks, it creates a breeding ground for inflation.*
Question: I dont have FRS amount. BRS amount still below $106500, say $50K only. In this case, how? SA only have $30K, they will take the difference 106500-50K-30K from OA into RA, is it?
While exploring CPF strategies, let’s also remember to support our local Singaporean businesses! 🇸🇬💼 Every dollar spent locally helps our economy grow and strengthens the community we all belong to. Who’s with me on making a difference by backing local? 🙌✨
After 55, the tax relief for topping up your CPF Retirement Account (RA) depends on your situation: 1. If your RA balance is below the Full Retirement Sum (FRS): You can top up to reach the FRS and enjoy tax relief on the amount contributed. 2. If your RA balance is already at or above the FRS: You can still top up to the Enhanced Retirement Sum (ERS), but no tax relief is granted for contributions beyond the FRS. In short: • Tax relief = Top-ups up to FRS. • No tax relief = Any excess top-ups towards ERS. Double-check your RA balance before proceeding to avoid surprises!
Mr Loo sir, what happens for those who died before retirement age to enjoy drawdown? We say, "too bad" to them? Or badly need the money? Continue to enjoy lockup abd compounding? Thats so high IQ
@@1m65That is not the scenario I am referring to leh. There are many scenarios possible. A hybrid model is better, allowing CPF members at retirement age to withdraw a lump sum but not full amount for a list of urgent cases which has to be audited and proven to be real reasons for partial withdrawal. So, not to worry, I am not so dumb to be suggesting full withdrawal. My idea is what most would not mind having if you do a poll. You are right, many will live to 70. But at what health state? Ai see buay see? Just kidding lah. So, my concern is not for myself but for the fact that there will also be many who will never live to 70 , 80, 90 or 100. Even if this will be a minority, it does not mean we are so selfish not to care for them. Selfishness is what divides a nation into islands of individuals . How to fight a war? Enemy just offer to spare you life and award you citizenship as long as you surrender. People will say what? "Aiya, surrender is Boh Bian one lah. What for risk our lives? Jia Bah Boh Sai Bhung? Got food to eat, job to do can alreadys. "???
If some of my SA are currently invested in stocks, what happens when I turn 55? Would I be forced to sell these stocks even if my remaining SA amount is already above the FRS?
I have earlier invested my SA savings. Do I have to sell my SA investments after the closure of SA? Answer: You can still hold your existing CPF Investment Scheme-Special Account (CPFIS-SA) investments. Upon sale or maturity after the SA is closed, the proceeds will go to the RA up to your FRS. The remaining amount will then be transferred to your OA.
First they makan your 4.14% compound interest when they use your FRS from RA to pay for CPF Life at 65 Now they makan your 4.14% compound interest when they close your SA at 55 So whats next? Welcome to Singapore 😂
Actually many ppl prefer frs is enough. The enhanced is for those that are rich. Also no one knows the future. Also what happened to those that 55 still working does it means cpf deduction only go to OA and MA no more into Sa?
Foolish to put so much into ERS which is irreversible...better off investing into the 3 SG banks for dividends, as u like to say, it's for old ah pek & old ahma lol....or SSB or T-Bills If the 55-er wants to take a little more risk, can consider Amundi Prime US or World via Endowus All those options are liquid as compared to ERS
Earning 2.5% or 4% over the long term in CPF is not going to grow your retirement savings substantially when inflation is 2% or more over the long term. Established retirement planning systems around the world invest in a diversified portfolio to earn 3% to 4% above inflation over the long run. There needs to be appropriate amount of risks to earn the sufficient retirement funds and that is your safety net. 2.5% or 4% p.a. is not your safety net when inflation is going to eat up most of it in the long run.
Mr Loo can you do episode on flat fire insurance here which one best to purchase also in view of LA Wildfire why many residents policy were cancelled and now how they going to make claims ?
@1m65 Are u kidding me Mr Loo ? LA houses mansions are huge and expensive so dont tell me celebrity home belongs to Paris Hilton Madonna Kamala Billy Crystal Hunter Biden all are made of woods and have u seen those houses yet
Please do not depend on CPF to grow savings. Nowadays one need to be savvy and financially literate to invest properly. Do not just depend on government for your savings. They are there to ensure you have enough for retirement. They are not there to give you more than what is needed. Also government schemes can always change
@@nickng-jm1vk yes. Nowadays the government will not go above and beyond. Ensuring that you have “enough” to retire will only be a minimum. It does not mean you may actually be able to enjoy this retirement with the minimum CPF funds
@ my dad and my grandma role modelled quite well for me. Grandma lived and worked till she was mid 80s. My father is 86 now, still working, cycles and walk a lot. Super healthy. I want to be like them!
@@1m65 your parents they have a healthy lifestyle that is good. They also need to have good genes. Diabetes, high cholesterol, high blood pressure, strokes, heart attacks etc many have a lot of strong genetic factors although lifestyle habits also play an important role. Many, despite being strict with diet and lifestyle are still afflicted by these illnesses so let us not forget that.
Great video. Yes policy and liquidity risk is extremely important and good point on not investing in something that you don’t understand. Many great men have fallen for the trap of fools gold
Mr Loo, I would like to say thank you to you once again for reminding us this very important idea of not to anyhow invest on things that we have little knowledge. Never do anything that you don’t understand in details.
It is indeed true that many ppl are jumping into stocks and share with little idea on what is going on. This is due to the publicity advertisement that one can earn quick money through these channels.
At the retirement age, one should not be using their hard earned money into investment if they hardly know anything. When one have little knowledge and invest, high chance everything will do into the thin air.
At this point of time, cpf is still the safest platform for the citizen who has little financial knowledge to park their money. Don’t splurge it and later regret.
Thank you Mr Loo!
@@Z-4M431 yes! Thanks for affirming what I said!
Thks Mr Loo for sharing! Its really helpful n layman!
Not everyone wants to work till 60 or 70yrs old. It depends on how stressful is the job. Number 1 killer is stress.
What if suddenly doctor told u got only a few years to live will u still work? Likely people will feel regret they didn’t enjoy life enough if they know they will be dead in a few years.
If one’s already accumulated enough money should retire early don’t waste your life away.
Don't be so lazy. Mr Lee Kuan Yew worked until in his Late 90s. His stress is certainly much more than any of you. Don't act and pretend like you're so entitled to rest. As a Singaporean, you are supposed to work until the day you die like him. 🙂
Thank you - a good summary….
Great video Mr Loo. Most importantly is to quickly educate oneself, like yourself, as much as possible in finance matters. ERS getting locked up is real. I doubt government will be so kind to reverse the lock up. But I feel the percentage return for a cash lock up for 6% is not high. There are safer stocks out there with decent 4% return and capital appreciation too. Just have to be hardworking to shop for these stocks, of course with proper financial knowledge.
I understand S&P 500.
It is an index that will always reach all time high since it exist.
@@lohti6399 but with a lot of scary volatility!
At the 8:18min, mentioned "(3,330*12)/(426,000 * 1.04^10) = 6.29% pa". The 6.29%pa should not be regarded like an "interest". It is like an interest + part of your principal given back to you. After x years, your principal will all be gone, given back to you.
Excellent explanation on the options for CPF after 55 ❤
Hi Mr Loo, if you discount the stream of payouts from 65 to 88 years you will end up with a rate of 4% to the RA amount at 55. The first year’s payout at 65 may seem high at 6.29% but because the annual payout is fixed, the return over present cost @55 will drop annually. (Eg at 66 you need to increase your denominator by another 4% etc). What is interesting is that the break even point for present value at 4% is around age 88 which is higher than the current life expectancy for males at 83years.
Question is what is an equivalent low risk alternative?
I already took out all my shielded SA come half year ago.. Bought into long dated Temesek 5.375% bonds in USD with effective yield to maturity about 4.8%pa. Good enough for me. Presently no good yielding safe bonds in SGD so will wait. If opportunity arises before I hit 65, I might just withdraw from RA leaving only BRS amount for CPF life. Then get another piece of decent yielding, very high investment grade long dated bond with that money. In my old age, I just need cash flow. No capital gains is ok
@@Phonedumb good plan
@@Phonedumb There's FX risk as the USD is widely expected to depreciate against SGD in the long run
Mr Loo, I’m from an earlier cohort and I transferred my CPF to hit FRS.
It has earned interest that would edge me towards the new FRS but I know interest alone wouldn’t help me reach it.
I’ve always wondered how much more I needed to top up to reach the new FRS - is it the current cohort’s ceiling or mine when I was 55?
I don’t know how to calculate the shortfall after deducting the interest I would accrue by then
Good job also on highlighting the risks as well, the recent St financial article on sa closing was entirely one sided
Your FRS of 213k in RA after 55 still can be withdraw down to BRS if u have property to pledge. Pls dont mislead ppls. U can withdraw anytime after 55 ( before 65 )
Dear all, CPF life is an annuity scheme. Do note the annuity features before topping up FRS.
Not real annuity if we pass away before 65 but after 55, will we lost the interest ?
For Standard Plans, interest earned goes into common pool. So yes.
Thanks, Loo for the sharing session.
It is not necessary that a new govt will screw things up for Sporeans. Cud it be the the reverse?
*A good economic system is one where money is circulated, enabling society to spend and foster business growth. When money is kept stagnant in banks, it creates a breeding ground for inflation.*
Question: I dont have FRS amount. BRS amount still below $106500, say $50K only. In this case, how? SA only have $30K, they will take the difference 106500-50K-30K from OA into RA, is it?
Good afternoon Mr Loo 👍😍
provided we live and remain healthy after 70.
As population age, I predict the cpf life payout will be reduced for future cohort.
You could be right, but we can’t tell for now
While exploring CPF strategies, let’s also remember to support our local Singaporean businesses! 🇸🇬💼 Every dollar spent locally helps our economy grow and strengthens the community we all belong to. Who’s with me on making a difference by backing local? 🙌✨
Yes.
Correct
👍
i will support anwhere that sell cheap, be it local or foreign.
How to even the RICH here spend at JB and same time encourage others 😂
So when will CBDC and SCS start 😢
Why is ERS better than FRS? The additional amount seems huge in comparison.
I have explained in my video: it is good if you want a high Monthly CPF Life payout.
For RSTU after 55, the tax relief is up to FRS or ERS?
After 55, the tax relief for topping up your CPF Retirement Account (RA) depends on your situation:
1. If your RA balance is below the Full Retirement Sum (FRS):
You can top up to reach the FRS and enjoy tax relief on the amount contributed.
2. If your RA balance is already at or above the FRS:
You can still top up to the Enhanced Retirement Sum (ERS), but no tax relief is granted for contributions beyond the FRS.
In short:
• Tax relief = Top-ups up to FRS.
• No tax relief = Any excess top-ups towards ERS.
Double-check your RA balance before proceeding to avoid surprises!
Hello Mr Loo, do I need to decide at 55 on if I want to go for BRS, FRS or ERS? Or I can decide at 65-70 when CPF life kicks in?
@@lynnchua1890yes you need to decided at 55yrs.
Can I transfer OA to MA?
@@1m65 u dont need to decide at 55 lah
Mr Loo sir, what happens for those who died before retirement age to enjoy drawdown? We say, "too bad" to them? Or badly need the money? Continue to enjoy lockup abd compounding? Thats so high IQ
What are you suggesting? Spend it all as early as possible?
@@1m65That is not the scenario I am referring to leh. There are many scenarios possible. A hybrid model is better, allowing CPF members at retirement age to withdraw a lump sum but not full amount for a list of urgent cases which has to be audited and proven to be real reasons for partial withdrawal. So, not to worry, I am not so dumb to be suggesting full withdrawal. My idea is what most would not mind having if you do a poll.
You are right, many will live to 70. But at what health state? Ai see buay see? Just kidding lah. So, my concern is not for myself but for the fact that there will also be many who will never live to 70 , 80, 90 or 100. Even if this will be a minority, it does not mean we are so selfish not to care for them. Selfishness is what divides a nation into islands of individuals . How to fight a war? Enemy just offer to spare you life and award you citizenship as long as you surrender. People will say what? "Aiya, surrender is Boh Bian one lah. What for risk our lives? Jia Bah Boh Sai Bhung? Got food to eat, job to do can alreadys. "???
Mr Loo do we not need to take yearly inflation into consideration?
That is factored in the increasing ERS / FRS every year
@1M65 When will FRS reach $1M? 40 years from now?
If some of my SA are currently invested in stocks, what happens when I turn 55? Would I be forced to sell these stocks even if my remaining SA amount is already above the FRS?
no, you do not need to sell
@@anhoi6969Thank you
I have earlier invested my SA savings. Do I have to sell my SA investments after the closure of SA?
Answer: You can still hold your existing CPF Investment Scheme-Special Account (CPFIS-SA) investments. Upon sale or maturity after the SA is closed, the proceeds will go to the RA up to your FRS. The remaining amount will then be transferred to your OA.
OA got more option than SA in term of investment for higher return at higher risk.
First they makan your 4.14% compound interest when they use your FRS from RA to pay for CPF Life at 65
Now they makan your 4.14% compound interest when they close your SA at 55
So whats next?
Welcome to Singapore 😂
If my FRS can reach the full amount at 55, so can I draw out the balance amount in my OA thanks.
Great video🎉
You can withdraw RA in a lump sum by pledging property before 65....true ?
What happened to our ERS if we passed away before 65 ? do we still joined the gain of 4% for our family members ?
Yes your beneficiary will get all of it, including interests earned.
Actually many ppl prefer frs is enough. The enhanced is for those that are rich. Also no one knows the future. Also what happened to those that 55 still working does it means cpf deduction only go to OA and MA no more into Sa?
Yup.
cpf deduction will go to OA, MA and RA
@@laykiansek228 what? Do we have a choice not to have it to RA? Since we already set aside FRS into RA.
@@牛领导 if you already achieve FRS, then it will flow into OA and MA only.
Soon, the police can decide for people with saving accounts with banks to take control of it due to scamming 😢
Below 55 ... Pump more in !!!
Foolish to put so much into ERS which is irreversible...better off investing into the 3 SG banks for dividends, as u like to say, it's for old ah pek & old ahma lol....or SSB or T-Bills
If the 55-er wants to take a little more risk, can consider Amundi Prime US or World via Endowus
All those options are liquid as compared to ERS
Earning 2.5% or 4% over the long term in CPF is not going to grow your retirement savings substantially when inflation is 2% or more over the long term. Established retirement planning systems around the world invest in a diversified portfolio to earn 3% to 4% above inflation over the long run. There needs to be appropriate amount of risks to earn the sufficient retirement funds and that is your safety net. 2.5% or 4% p.a. is not your safety net when inflation is going to eat up most of it in the long run.
At older age, investors are not suitable to take heavy equity risk.
Just before you hit 65, man in white will shift goal post and raise CPF Life payout date to start at 75 yrs old 😂
After 70, your desire to enjoy reduced, retire earlier . Reach 65 and spend
CPF is a form of tax. CPF Life is tax rebate.
Mr Loo can you do episode on flat fire insurance here which one best to purchase also in view of LA Wildfire why many residents policy were cancelled and now how they going to make claims ?
Won’t happen to Singapore. Californian houses all made of wood. Singapore houses all concrete.
@1m65 Are u kidding me Mr Loo ? LA houses mansions are huge and expensive so dont tell me celebrity home belongs to Paris Hilton Madonna Kamala Billy Crystal Hunter Biden all are made of woods and have u seen those houses yet
@ I used to stay there lah….
@@1m65 Wow u must be super rich 👍
@ no lah. Studied in California for my Masters. Sponsored by Company. So I very familiar with California.
you take my differential 1.5% × 30 years, i deny you the vote. thats the least i can and should do.
Please do not depend on CPF to grow savings. Nowadays one need to be savvy and financially literate to invest properly. Do not just depend on government for your savings. They are there to ensure you have enough for retirement. They are not there to give you more than what is needed.
Also government schemes can always change
As we aged, our mind stop working or wrongly, investment or trading the stock market might not be good...
@@tanhakkoon then even a fix deposit can return better than CPF
basically is they dont want to see u starve to death neither do they want to feed u extra.
@@nickng-jm1vk yes. Nowadays the government will not go above and beyond. Ensuring that you have “enough” to retire will only be a minimum. It does not mean you may actually be able to enjoy this retirement with the minimum CPF funds
Very true.
Biggest winner is the Bank🤭🤣
70 yr old....what can you spend on?...spend all the 4.3k on medical n hospital bills? Kinda sad dont u think?
Well, keep yourself healthy and fit!
@@1m65 yes but at 70 honestly cant do much no matter how healthy you are, even patrick tse maintained so well still look like an old man ultimately.
@ my dad and my grandma role modelled quite well for me. Grandma lived and worked till she was mid 80s. My father is 86 now, still working, cycles and walk a lot. Super healthy. I want to be like them!
@@1m65 your parents they have a healthy lifestyle that is good. They also need to have good genes. Diabetes, high cholesterol, high blood pressure, strokes, heart attacks etc many have a lot of strong genetic factors although lifestyle habits also play an important role.
Many, despite being strict with diet and lifestyle are still afflicted by these illnesses so let us not forget that.
Dont rely on cpf ffs, anytime gov can change the rules. Take the money and buy sgx. Higher yield and liquidity.
Haha I got 4 cpf account OA MA SA and RA at the age of 46
It's all China's fault😂
All in DBS, ocbc, uob