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13-06-2018 02:23 PM
Unregistered
Quote:
Originally Posted by Unregistered View Post

What is a person to do?
You are well-off. I highly urge you to donate $8888 to the needy people every 8 months starting 18 June 2018.
31-05-2018 11:30 AM
Unregistered
parts of an elephant

Many of us are familiar with the parable about a group of blind men and an elephant.

The blind men heard that a strange animal (the elephant) was brought into town and they wanted to feel for themselves what this animal was like. So each of them felt part of the elephant.

The one who touched the side of the elephant said the animal was like a wall. The one who touched the tail, said no, the animal was like a rope. The one who touched the trunk described the animal as a huge snake. The one who touched the ear proclaimed that the animal was like a fan. The one who touched one of the elephant's legs said it was more like a tree.

This story reminded me of my own experience with different friends when we talked about our investments.

When discussing the CPF with one group of friends, I told them that my wife and I could withdraw the interests from our OA and SA amounting to $50k pa. My friends immediately proclaimed that we were too conservative and that we parked too much money into the CPF. They advised that we should invest some of the money in property or stocks.

Yet with another group of friends talking about stocks and shares, I told them that my yearly dividends were around $55k and one of the friends quickly estimated that my invested capital must be above $1M. The rest expressed concern that I might over exposing myself to the vagaries of the stock market. They advised caution and suggested that I move some of the money to safer investment such as SSB or even the CPF.

Then with yet another group of friends discussing property prices and en-blocs, upon hearing that I have 2 condos, they said better to play safe and not to over invest in property as the market is unpredictable especially now that we are closer to retirement age.

What is a person to do?
28-05-2018 09:56 PM
Unregistered Thanks for the honest and good reply.

May I know which insurance company policy that you have invested?

Recently I have been approached by banks and they recommended me NTUC SAIL & TM TM&[email protected]

It seems like NTUC is a better choice because of reinvestment option when you reach the 10 years mark.


Quote:
Originally Posted by Unregistered View Post
I treat my SRS contribution strictly for retirement. As such I do not invest them in stocks!

I want to have certainty on their availability when I start my SRS withdrawal at 62, so the SRS funds must be safe and available. I use the money to buy single premium insurance products with fixed and guaranteed payout upon maturity. Their returns are low but guaranteed.

When you invest your SRS in shares, you may enjoy higher returns but the risk of loss is also higher. The worst that could happen is when you are about to withdraw your SRS for your retirement, the stock market goes into a big melt down like in 2008/9 and you sell at a great loss.

Use money that you can afford to lose to invest in stock market. Gains can be high, but loss can be big too! You should not be losing sleep over that money if the market value drops! If it cause you stress and anxiety, then you should not be investing that money in the stock market.
28-05-2018 02:07 PM
Unregistered
Quote:
Originally Posted by Unregistered View Post
Thanks for sharing. May I know how did you invest your SRS funds? I have been toying with the idea of SRS but banks are charging outrageous fees for transactions.
I treat my SRS contribution strictly for retirement. As such I do not invest them in stocks!

I want to have certainty on their availability when I start my SRS withdrawal at 62, so the SRS funds must be safe and available. I use the money to buy single premium insurance products with fixed and guaranteed payout upon maturity. Their returns are low but guaranteed.

When you invest your SRS in shares, you may enjoy higher returns but the risk of loss is also higher. The worst that could happen is when you are about to withdraw your SRS for your retirement, the stock market goes into a big melt down like in 2008/9 and you sell at a great loss.

Use money that you can afford to lose to invest in stock market. Gains can be high, but loss can be big too! You should not be losing sleep over that money if the market value drops! If it cause you stress and anxiety, then you should not be investing that money in the stock market.
28-05-2018 01:30 PM
Unregistered Me too wondering what do I invest using SRS.

Guess since that poster has dividends from stocks, likely he would have invested in equities.

Myself have bought UT and looking at either single premium, another UT or stocks. Don't wanna risk the SRS as that would form a huge part of my retirement besides CPF Life and SA.

Lost a big chunk of money through scam investment and think it is safer to put in CPF and SRS, draw down slowly when retired.



Quote:
Originally Posted by Unregistered View Post
Thanks for sharing. May I know how did you invest your SRS funds? I have been toying with the idea of SRS but banks are charging outrageous fees for transactions.
28-05-2018 08:53 AM
Unregistered
Quote:
Originally Posted by Unregistered View Post
Still working.

The CPF is one of my three "pillars" in my retirement funding scenario. The other two are divideds from shares and rental from my investment property. And a small amount of FD which forms the emergency fund. This amount is one year's worth of expenses at $100k.

This is what our income sources (outside of work income) would look like :

Currently (age 58), combined passive income with wife

Dividends : $55k pa
Rental : $38k pa
CPF interest (OA & SA) : $48k pa (keep in CPF to compound)

From age 62 to 64 (retired)

Dividends: ~ $55k pa
Rental : ~ $36k pa
SRS drawdown : $26k pa
CPF interest (OA & SA) : $50k pa

From age 65 to 71

Dividends: ~ $55k pa
Rental : ~ $36k pa
SRS drawdown : $26k pa
CPF interest (OA & SA) : $50k pa
CPF Life : ~ $40k pa

From age 72 onwards

Dividends: ~ $55k pa
Rental : ~ $36k pa
CPF interest (OA & SA) : $50k pa
CPF Life : ~ $40k pa
Thanks for sharing. May I know how did you invest your SRS funds? I have been toying with the idea of SRS but banks are charging outrageous fees for transactions.
28-05-2018 07:52 AM
Unregistered
Quote:
Originally Posted by Unregistered View Post
May I know if you are retired already? And if so or otherwise, how much does your CPF contributed towards your retirement funds/plan.

I have also hit my FRS. My current plan is to grow my CPF, top up MA/SA at the start of the year whenever they increase the limits to grow my CPF. I estimated that CPF will be more than a mil at 55 and I plan to leave the money in there, draw on the interest and CPF life to supplement my retirement income. I would estimate that I would be able to draw around 70K per annum from CPF life and CPF interest from age 65 to supplement my retirement funds outside CPF.

Appreciate anyone's input on this.
Still working.

The CPF is one of my three "pillars" in my retirement funding scenario. The other two are divideds from shares and rental from my investment property. And a small amount of FD which forms the emergency fund. This amount is one year's worth of expenses at $100k.

This is what our income sources (outside of work income) would look like :

Currently (age 58), combined passive income with wife

Dividends : $55k pa
Rental : $38k pa
CPF interest (OA & SA) : $48k pa (keep in CPF to compound)

From age 62 to 64 (retired)

Dividends: ~ $55k pa
Rental : ~ $36k pa
SRS drawdown : $26k pa
CPF interest (OA & SA) : $50k pa

From age 65 to 71

Dividends: ~ $55k pa
Rental : ~ $36k pa
SRS drawdown : $26k pa
CPF interest (OA & SA) : $50k pa
CPF Life : ~ $40k pa

From age 72 onwards

Dividends: ~ $55k pa
Rental : ~ $36k pa
CPF interest (OA & SA) : $50k pa
CPF Life : ~ $40k pa
27-05-2018 11:26 PM
Unregistered
Quote:
Originally Posted by Unregistered View Post
Yup, you are right that they will take the FRS amount from your SA when you turn 55, and leave the excess in your SA.

You can then top up your RA with cash by any amount at any time of the year till it reach the ERS limit for the year. Every year the ERS limit amount will grow by $7,500.

If you want to top up your RA with CPF money, they will take from your SA first, depletes that before they will take from your OA.
May I know if you are retired already? And if so or otherwise, how much does your CPF contributed towards your retirement funds/plan.

I have also hit my FRS. My current plan is to grow my CPF, top up MA/SA at the start of the year whenever they increase the limits to grow my CPF. I estimated that CPF will be more than a mil at 55 and I plan to leave the money in there, draw on the interest and CPF life to supplement my retirement income. I would estimate that I would be able to draw around 70K per annum from CPF life and CPF interest from age 65 to supplement my retirement funds outside CPF.

Appreciate anyone's input on this.
27-05-2018 10:47 PM
Unregistered
Quote:
Originally Posted by Unregistered View Post
Hi,

I learnt something new from you. I am mid-40's and my current SA is $210K.

Based on my estimation, my SA would reach $356K and the ERS would increase to $345K by then.

You mentioned that once RA account is created or SA FRS limit hit, we are not allowed to top up.

That's means I could lock in my RA based on FRS est $230K in year 2027, keep the balance of $126K in SA to continue earning interest. And top up $155K in cash to my RA when I am 55yo to enjoy the CPF Life higher payout? The top up must be at one go at age 55yo or can be spread over years?

Thanks
Yup, you are right that they will take the FRS amount from your SA when you turn 55, and leave the excess in your SA.

You can then top up your RA with cash by any amount at any time of the year till it reach the ERS limit for the year. Every year the ERS limit amount will grow by $7,500.

If you want to top up your RA with CPF money, they will take from your SA first, depletes that before they will take from your OA.
27-05-2018 11:06 AM
Unregistered Hi,

I learnt something new from you. I am mid-40's and my current SA is $210K.

Based on my estimation, my SA would reach $356K and the ERS would increase to $345K by then.

You mentioned that once RA account is created or SA FRS limit hit, we are not allowed to top up.

That's means I could lock in my RA based on FRS est $230K in year 2027, keep the balance of $126K in SA to continue earning interest. And top up $155K in cash to my RA when I am 55yo to enjoy the CPF Life higher payout? The top up must be at one go at age 55yo or can be spread over years?

Thanks


Quote:
Originally Posted by Unregistered View Post
I will be 58 soon. As far as I can remember, I hit the SA limit when I was 40 yo. With the yearly 4% interest and regular monthly contributions from salary deductions, my SA amount was always above the limit for each new year. There was no way I could top up to my SA from age 40 onwards. Same goes for my MA. Only difference was the excess in MA is transferred to your OA each year.

When I turned 55, they took a sum equivalent to the FRS from my SA to form my RA. Should you not have enough in your SA to form the FRS, they would also take from your OA.

For my case, as my SA amount was always above the yearly limit, I still have quite substantial amount left in my SA after my RA was created with the full amount - FRS. From there I further upped my FRS in my RA to the ERS. And each year, I topped up the RA to the new ERS limit. For this year 2018, the ERS is $256,500. Together with the accumulated interest, my RA now is $280k.

After your RA is created when you turned 55, there is no way to top up your SA. Your SA can still grow from salary contributions or voluntary contributions subject to the yearly limit of $37,740 and according to the allocation to the various CPF accounts. In other words, you cannot transfer money from your OA to your SA when the limit is hit or when your RA is created.

But you can top up your RA.
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