CPF SA Shielding (do this just before you turn 55) - Salary.sg Forums
Salary.sg Forums  

Go Back   Salary.sg Forums > The Salary.sg Discussion Forums: > CPF (Central Provident Fund)

CPF (Central Provident Fund) All about OA, SA, MA and RA, and strategies to optimize your CPF




CPF SA Shielding (do this just before you turn 55)

Reply
 
Thread Tools
  #1 (permalink)  
Old 27-01-2021, 11:29 PM
Senior Member
 
Join Date: Jun 2009
Posts: 45
Salary.sg is on a distinguished road
Default CPF SA Shielding (do this just before you turn 55)

When you turn 55, CPF board will create a Retirement Account (RA) for you.

The money from your Special Account (SA) will first be transferred to your RA, followed by money from your Ordinary Account (OA), up to the Full Retirement Sum (FRS).

Note that FRS is $186k in 2021. It was $181k in 2020.

Because SA pays a higher interest (4%) than OA (2.5%), it makes sense to "shield" your SA money from being transferred.

To do this:

- Just before you turn 55, invest as much of your SA money as possible via the CPF Investment Scheme (CPFIS).

For example, you may buy SGS Treasury Bills (T-Bills) that mature in 6 months. Make sure that they mature AFTER you turn 55.

Note that you have to set aside 40k to remain in your SA, meaning that you can only invest the rest. For example, if you have 300k in your SA, you can invest 260k.

- When you turn 55, the 40k from SA and money from your OA will be transferred to the newly created RA.

- After the T-Bills mature, the money together with its returns will be credited back to your SA. Your SA money will then continue to earn the 4%++ interest.

Reply With Quote
  #2 (permalink)  
Old 27-01-2021, 11:46 PM
Unregistered
Guest
 
Posts: n/a
Default

RA interest rate also 4%



Primary School English Grammar and Vocabulary Drills
Primary School English Grammar and Vocabulary Drills


SG Bus Timing App
SG Bus Timing App - the best bus app - available on iOS and Android


Bursa Stocks Android App - check share prices
Bursa Stocks [Android] App - check latest share prices on the go


SGX Stocks Android App - check share prices
SGX Stocks [Android] App - check latest share prices on the go


SGX Stocks for iPad - check latest Singapore share prices
SGX Stocks [iPad] app
| SGX Stocks [iPhone] app
Reply With Quote
  #3 (permalink)  
Old 28-01-2021, 12:07 AM
Senior Member
 
Join Date: Jun 2009
Posts: 45
Salary.sg is on a distinguished road
Default

Quote:
Originally Posted by Unregistered View Post
RA interest rate also 4%
Suppose you have:
OA 151k
SA 151k

Without shielding, after you turn 55, you will have:
OA 121k <-- 2.5%
SA 0k
RA 181k

With shielding (after T-Bills mature):
OA 10k
SA 111k <-- 4%
RA 40k+141k

The difference is that you will have 111k earning 1.5% more.

Reply With Quote
  #4 (permalink)  
Old 21-02-2021, 03:15 PM
Senior Member
 
Join Date: Jun 2009
Posts: 45
Salary.sg is on a distinguished road
Default

This youtube video explains the CPF Shielding strategy very well:

https://youtu.be/i2n4l5UyfPw
Reply With Quote
  #5 (permalink)  
Old 17-04-2021, 07:34 PM
Senior Member
 
Join Date: Jun 2009
Posts: 45
Salary.sg is on a distinguished road
Default

Check out this asiaone article on the same topic.

Before you turn 55 years old:

Step one: Calculate how much you need to transfer out of your CPF SA, in order to keep just $40,000 in the account

Step two: Transfer that amount of money out of your CPF SA by investing the money in a low risk investment product (more on this in the section below)

Note, you’ll need to be able to invest under the CPFIS before you can do this.

After you turn 55 years old:

Step three: Wait and check for your CPF RA to be formed

Step four: Cash out by selling your investments

Step five: Transfer the money back into your CPF SA

Step six (optional): Consider topping up your CPF RA up to the Enhanced Retirement Sum (ERS) to enjoy higher monthly payouts during your retirement
Reply With Quote
  #6 (permalink)  
Old 10-01-2022, 01:59 AM
Senior Member
 
Join Date: Jun 2009
Posts: 45
Salary.sg is on a distinguished road
Default

Good article with details on the CPF shielding "hack":

https://dollarsandsense.sg/cpf-shiel...inary-account/
Reply With Quote

  #7 (permalink)  
Old 10-01-2022, 10:27 AM
Unregistered
Guest
 
Posts: n/a
Default

Quote:
Originally Posted by Salary.sg View Post
Suppose you have:
OA 151k
SA 151k

Without shielding, after you turn 55, you will have:
OA 121k <-- 2.5%
SA 0k
RA 181k

With shielding (after T-Bills mature):
OA 10k
SA 111k <-- 4%
RA 40k+141k

The difference is that you will have 111k earning 1.5% more.
Can't you just transfer from OA to SA after you turn 55?
Reply With Quote
  #8 (permalink)  
Old 10-01-2022, 10:48 AM
Senior Member
 
Join Date: Jun 2009
Posts: 45
Salary.sg is on a distinguished road
Default

Quote:
Originally Posted by Unregistered View Post
Can't you just transfer from OA to SA after you turn 55?
After 55, no.

See:
https://www.cpf.gov.sg/member/faq/gr...s-to-my-specia

"No, you will not be able to make CPF transfers to your Special Account (SA) after you turn 55. The Retirement Account (RA) was created for your retirement needs when you turned 55. Hence, top-ups to boost payouts will have to be made to the RA instead of SA."
Reply With Quote
  #9 (permalink)  
Old 12-01-2022, 10:42 AM
Unregistered
Guest
 
Posts: n/a
Default

Has anyone purchase T-Bills using SA for CPF shielding.

I called up my CPFIS bank (UOB) and they said it is not managed thru them.

I searched CPF website but T-bills is not listed -> s://.cpf.gov.sg/member/growing-your-savings/earning-higher-returns/investing-your-cpf-savings

Thanks
Reply With Quote
  #10 (permalink)  
Old 10-06-2022, 05:35 PM
Unregistered
Guest
 
Posts: n/a
Default

One point not mentioned in this thread is that after reaching retirement age, you can withdraw from OA and SA any time (subject to some rules), but you can’t withdraw from RA account. Hence, to the person who asked why not transfer from OA to RA to earn a higher interest, the answer is that if you have more than FRS amount in SA before age 55, it’s best to “shield” some money so that there’s more money in SA (earning higher interest) than in OA even though you can withdraw from both OA and SA.
Reply With Quote
Reply

Bookmarks

Tags
cpf, shielding

« Previous Thread | Next Thread »
Thread Tools

Posting Rules
You may not post new threads
You may post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are On
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Turn your passion into a profitable online business! Leody Freelancers and Freelance Jobs 2 18-02-2021 10:46 PM
Advice: new job don't turn out as expected positivethinker Income and Jobs 12 04-06-2019 07:52 AM
Can I turn down a job after signing a contract? Armageddon Income and Jobs 15 23-05-2016 12:23 AM
Is it ok to turn down an accepted verbal offer? lmaohaha Income and Jobs 13 05-07-2012 01:01 PM

» 30 Recent Threads
Q: Big4 - Yearly salary increment ( 1 2 3... Last Page)
18,154 Replies, 5,483,789 Views
How is life as a doctor in... ( 1 2 3... Last Page)
7,559 Replies, 3,624,575 Views
IMDA (under MCI) ( 1 2 3... Last Page)
1,360 Replies, 701,063 Views
MAS for Mid Career Professionals ( 1 2 3... Last Page)
2,309 Replies, 1,168,281 Views
Roles in accenture singapore ( 1 2 3... Last Page)
8,115 Replies, 2,560,490 Views
DSTA (under Mindef) ( 1 2 3... Last Page)
1,641 Replies, 1,473,792 Views
LTA (Land Transport Authority) ( 1 2 3... Last Page)
887 Replies, 472,301 Views
DBS Graduate Associate Program ( 1 2 3... Last Page)
2,303 Replies, 1,026,285 Views
NCS (SingTel subsidiary) ( 1 2 3... Last Page)
1,510 Replies, 1,238,584 Views
Civil Svc/ Statboard - Typical... ( 1 2 3... Last Page)
6,402 Replies, 3,973,556 Views
Career as Teacher ( 1 2 3... Last Page)
11,725 Replies, 7,164,291 Views
Micron starting pay ( 1 2 3... Last Page)
709 Replies, 423,643 Views
ST Electronics ( 1 2 3... Last Page)
3,936 Replies, 1,663,386 Views
Ex-MOE Teachers ( 1 2 3... Last Page)
432 Replies, 527,037 Views
Factual Local Bank Salaries - DBS... ( 1 2 3... Last Page)
1,936 Replies, 1,547,894 Views
DBS ACE Programme ( 1 2 3... Last Page)
164 Replies, 87,645 Views
Lawyer Salary ( 1 2 3... Last Page)
21,401 Replies, 10,804,747 Views
GIC offer ( 1 2 3)
21 Replies, 1,635 Views
MINDEF DXO (All FAQ on it) ( 1 2 3... Last Page)
6,057 Replies, 4,903,191 Views
AML/Compliance/KYC professionals... ( 1 2 3... Last Page)
1,866 Replies, 1,275,913 Views
HTX (Home Team Science and... ( 1 2 3... Last Page)
941 Replies, 452,950 Views
Work culture in IHiS ( 1 2 3... Last Page)
791 Replies, 591,620 Views
Compare civil service salary ( 1 2 3... Last Page)
16,505 Replies, 12,918,268 Views
How much savings do you have? ( 1 2 3... Last Page)
1,343 Replies, 845,897 Views
MOH Holdings ( 1 2 3... Last Page)
77 Replies, 52,483 Views
Hospital (Private or Public)... ( 1 2 3... Last Page)
840 Replies, 481,452 Views
Compilation of MAs/Analysts Gross... ( 1 2 3... Last Page)
1,271 Replies, 741,552 Views
ITE Polytechnic Scheme ( 1 2 3... Last Page)
356 Replies, 402,845 Views
Queries about Cpib application ( 1 2 3... Last Page)
1,400 Replies, 933,935 Views
Powered by vBadvanced CMPS v3.2.2



All times are GMT +8. The time now is 05:23 AM.


Powered by vBulletin® Version 3.8.5
Copyright ©2000 - 2024, Jelsoft Enterprises Ltd.
Content Relevant URLs by vBSEO 3.3.2