[25]build up150k]wife’s greenPortion

Posted on by tiger40490

 

  • $10k self top-up by cash .. excluded from green_portion of cpfRA. “Only meant for CpfLife monthly payout”. No way to withdraw at 55 or any time after.
  • $10k within-family cash top-up, includes my annual 8k .. excluded
  • $10k within-family cpf transfer .. excluded
  • .. In my dashboard there is an amount displayed.
  • $10k self transfer from her own OA (including VCon).. will go into green_portion 🙂
  • $38k VCon -> 3-way split .. about 27k will go into green_portion 🙂
  • .. salary contribution .. similar. Let’s wait for that to kick in.

The green_portion of wifeRA is f4w by “pledging”. As of Feb 2025, 24k is red_portion. Green_portion is about 60k.

It’s crucial to build up a big SA balance before she turns 55, so that when cpfRA is created, it will have a sizeable green_portion.

The timeline and process:

  1. at 55, FRS amount (say 250k) is auto-transferred from OA/SA into my new RA. (There may be an excess balance in OA/SA.)
  2. IFF we pledge my portion of the flat as “collateral” then we can take out the green_portion of cpfRA. We should test this channel after 55, a little bit.
  3. The OA/SA excess balance can be withdrawn 100% any time. We should exhaust this channel beffore touching the green_portion.
  4. After 55 (by 65), I will top up cpfRA to the ERS watermark.
  5. Before wife turns 55, self-transfer OA balance to SA.

bank::CMB招商

Posted on by tiger40490
  • outlets .. 132 in Beijing, far more than HSBC
  • nearest branch 68784030 (9-17:30)
  • hotline +86-755-95555 … after 12 am emergency services only.
  • FB_balance $0
  • webank is discouraged. Mobank is recommended.
  • Transfer-out is Rmb20k/day

— j4 CMB

  • j4: ChannelA 0.5% fee, max Rmb60 for 10k withdrawal.
  • #1 j4 (over PSBC): keep wife’s ChannelA /operable/ when PSBC is frozen? Hopefully
  • j4 (over PSBC): no 绑定码
  • j4 (over PSBC): no NRIC needed on every flight to China
  • j4 (over PSBC): more “foreigner-friendly”
  • j4 (over PSBC): can open account for age 16-17
  • j4 (over PSBC): can open account for age 11, under custody

— account opening .. passport + smrz mobileNum
— mobileNum needs smrz .. Rmb180 can last 2 years.
For Zofia, can set up long-term number at T3 ChnM. Optionally, when we have time, transfer #178 to her. Updating mobileNum is fast but must go to branch, with smrz proof of new number.

— age 11: Option P: Parent can give his smrz mobile number + [ official birth cert + both passports to show relationship] but the birth cert need 海牙认证.

For meimei, this is too complicated due to name change.
— age 16-17: Better give a good reason like wcpay/alipay, and overseas card spend

  • Option P
  • Option 1: If you can get a smrz-mobileNum then the accont can be opened and usable for ChannelA. For boy, can set up a temp 14D mobileNum at T3 Unicom. In Singapore, quickly log in (not required) and start ChannelA. Even after mobileNum expires, we can still transfer in and use ChannelA.
  • Option 3: 非实名认证手机号 might be usable to open the account, with “lower” transaction limits

— What if mobileNum expired? Can transfer in and withdraw, as confirmed with hotline

  • balance check on overseas ATM .. should be FOC
  • balance check via phone banking automated.. requires 查询PIN + card number
  • balance check via phone banking live agent .. requires 查询PIN + card number

 

Posted in chn

lock up100k]cpf if no liquidity need

Posted on by tiger40490

See also

— The worries .. Given 300k [1] idle cash in your bank account, this sitting suck is exposed to (ranked by my worry)

  1. scams … growing threat as we age and lose some of our judgement
  2. splurge .. by anyone in the family
  3. [a] adult children 啃老 .. relying on me
  4. [a] adult children’s housing needs .. their problem, not my duty. I want to help out within my means. Having most of my fund locked into cpfLife obviates these tricky, heavy, stressful decisions.
  5. [a] start-up .. by my adult children or someone else. A good cause. However, beyond my 60s I won’t have big (above 100k) appetite for start-ups.
  6. [a] donations .. Large donation is safer in my will, not an impulsive decision. In contrast, regular contribution can be adjusted at any time.

[a] Some may call me an elderly hoarder but I want to protect my wife and my own retirement.

[1] You may have more idle cash, but let’s focus on a slice of it.

——————————-

If you are between 55 and 65, and foresee no “liquidity needs” after 65, then better lock it away in cpfRA. Time your action to some time close to 65.

If you don’t need this amount of idle cash after 55, then better lock it away in cpfRA. Note you still can withdraw the snap55_FRS_minus_BRS amount (the green portion). See %%big-ticket outlays: 55-65 – dTanbinvest

Q: how much locked up is too_much_locked_up?
A: an amount (like 1000k locked up) that affects my big-ticket purchases.
A: no amount is “too_much_locked_up”, if I have no big-tickets in my old age

— Q: Considering long-term inflation (60~90), but assuming no liquidty needs, should I lock up this huge[1] amount in cpfLife?

  • optimist .. I will have work income into my 70s. Part of it, if in Singapore, will go into cpfOA and f4w
  • optimist .. Assuming no liquity needs, my everyday living expensese will Not experience inflation as high as in housing, medical, education,,,
  • if I lock away this huge[1] amount of idle cash, then my monthly payout would be increased by some $x amount. I could invest this $x into inflation-hedging asset such as stocks or FixD
  • Outside cpfLife, I will have other productive assets such as rental prop, dividend stocks

[25]CPF: 2channels: withdraw{55

Posted on by tiger40490

This bpost provides simple binary framework. It is applicable to my and wife’s cpf withdrawals after 55.

Green_portion channel is irreversible, so use it as a last resort.

— channel: from OA

Right after RA creation, “excess” amount flows into OA. Any OA balance is 100% withdrawable any time, including subsequent salary contributions. OA becomes something like a bank account. No restriction like ‘SA top-up amount is not withdrawable’.

— channel: from the green portion of cpfRA. See [21]cpfRA for liquid parking@4% – dTanbinvest

##[25]cpfLife adv over private annuity

Posted on by tiger40490

See also

— advantage: fineprints are well-documented
CPF Life product feature is probably more stable, and better understood. Fewer hidden surprises.

Same (no such thing in private annuities) policy for everyone. Easy to find answers online.

As a auth UI, Singapass shares this advantage.

CPF Life is designed for the less educated. The CPF board is not out to take advantage of its own citizens.

policy fineprints stay the same for decades. (Some private annuities evolve with market, or go out of market.) As a result, I invested dozens of hours to document CPF fineprints in 30+ bposts.

— advantage: hotline + service centers .. CPF customer service is excellent — onsite, prompt help, similar to a local police or WalMart. The information provides is simpler to understand.

As a auth UI, Singapass shares this advantage.

— advantage: expRatio
CPF is not run for profit. If the commercial insurer charges 3% fee a year or has average 5% surplus return from investment, or pays the salesman a commission,  then with CPF Life, these sums would go back into the pool, enhancing the payouts.

Compare a bookstore run by a church vs a commercial bookstore.

— advantage: non-profit .. The insurer is CPF board which I trust more.

If the economy takes a down turn for CPF members, and the CPF Life becomes insufficient as a retirement plan, then I trust CPF would consider adjustments (bending over backward) to help the members. Retirement is the #1 objective of CPF board of a nanny state. In contrast, Allianz is a commercial operator and not a nanny state.

— advantage: (standard plan) stable payout .. monthly payout amount stays constant in the Standard plan, provided cpf int rate and mortality rate stay constant.  I heard this promise in a Feb 2025 hotline conversation, and I trust this “promise”.

In constrast my private annuities have weaker “promises” on payout rate.

The rest are questionable “advantages”, but often cited as advantages

— higher payout_rate .. becuase

  • descending death benefit .. “selling blood to prop up payout_rate”. CpfLife is a “descending annuity”.
  • .. I prefer the words “descending/descent” for its neutral connotation
  • 10Y accumulation at 4 ppa. Many private annuities have 10Y or 20Y but I bought three annuties with 3Y accumu phase.
  • low expRatio

— liquidity (double-edged) .. private annuities have surrender value, an exposure to scams and adult children’s (unwanted) plea for help

As discusssed in lock up100k]cpf, if you don’t need some 100k idle cash for the rest of your life, then why not lock it away in cpfRA permanently to prevent those issues?

##Sgp cCards #Cimb

Posted on by tiger40490

Mission: how can we terminate more ccards n simplify everything?

— “Proactive” pay-down .. To see the automated payoff amount, most reliable is the (immutable) monthly statement. Sugg: Proactively pay down 60% ??? (or 100%) thereof, after the statement is out, before GIRO fixing date.

For MB, GIRO date is the statement due date [around 13th], and GIRO amount is fixed 5 business days earlier:

  • Better send “Proactive pay-down” well before T-5, so that GIRO amount is reduced on T-5.
  • 🙁 If “Proactive 4k” hits after GIRO fixing, then GIRO would deduct the full statement balance,  resulting in a credit balance of 4k
  • Statement balance is the “FullPaymentAmount” in MB inetBanking

— drawbacks of using any ccard…. #
As of 2023, I feel the complexity + baggage of carrying[1] multiple ccards. (Debit cards are simpler.) I felt relieved to cancel multiple ccards —  CIMB, OC,,

Cancellation.. If a Singapore bank gives ccard easily, then I should be aggressive to cancel [2] the ccard whenever I determine it’s no longer needed. This can

  • Simplify ccard payoff, reduce sys2 workload about late payments
  • simplify online shopping… A site often remembers 10+ past credit/debit cards ! Delete as many as possible. The fewer cards left on record, the simpler and quicker.
  • Simplify exp recon… as I may have an invisible/forgotten charge on a card.. Will mess up my exp recon. Extra cards adds worthless, artificial complexity to recon process
  • Simplify annual fees and esp. late fees … This requires vigilance i.e. stress.
  • simplify GIRO-by-ccard
  • simplify my mails and emails from card issuers

[2] Simplest way to cancel a card is reporting lost card. Note in the U.S. Cancellations affect credit score.

I have gone through the legwork to set up the MB “pain killers”, so I can shift more “transactions” to MB. (However, setting up the same pain killers on another ccard could take lots of legwork.) All other ccard usage should be dumb-n-simple.

I currently have ccards from 4 banks: D H S M C

— CIMB .. Spend $500 within 60 days of approval (by 16 Apr). $135 to be credited in 3rd month.

Prefer a big ticket item like

  • $340 flight charged
  • NTUC vouchers
  • medical bills

— DBS::eccard .. Keep this ccard for contingency (Cimb 31 Oct)
* Annual fee started in Aug 2023, but easy and quick to waive (online request)
* 🙂 credit balance xfer-out via digibot. Useful as bill payment target. $2k xfer possible in Oct 2023
* 🙂 automated pay-off by GIRO already set up.
* 🙁 tx history display and ACL calc .. unfamiliar. Looks like ACL is based on last statement and ignores unbilled. To see credit transactions on webank, you must ModifySearch to choose the “unbilled”
— HSBC::revolution … I have relatively few deep Visa cards

  • consider closing now. Can reapply in 12M
  • j4: in Nov 2023, I needed a visa card to avoid $60 Mastercard surcharge
  • j4: 1% cashback on everything

~~ (Recreational complexity) As of Nov 2023, there is a 10x promotion. My $1264 flight spend will earn me about 10264 bonus_points visible in Jan or Feb. After that, I can use the bonus_points to pay for my ccard bill. $1/400 points. The cash credit hits ccard account within 3 weeks.

If you charge $3k in one purchase, you earn 3000 points at end of current statement cycle, and you earn 9x (27000 points), but subject to 9000 points cap, so you will only earn 9000 points, at end of next statement cycle.

—  SCB::scsc [-9933].. Keep for the hassle-free cashback
Cashback .. with no min spend, no cap (FAQ). 1.5% on any SPENDING but excluding [AXS, bx premium, recurring bill payment]. Good for big purchases like flights/hotels, medical, electronics, but better call hotline before buying.

Statement date ~ 10th. Due date is 22 days later. Please pay off statement balance 1~2 bizday in advance if via intra-bank transfer.

! ACL reflects unposted amount
! CurrentBalance is very tricky. It is computed from AvailableCreditLimit and then adjusted to remove unposted amounts.

AnnualFee .. If auto-waiver fails, (Max said) we need to be nice to hotline when requesting waiver.

BilledBalance menas “statement balance”
Billed means “onClosedStatement”
Unbilled means “not on statement”, different from ‘unposted’

Efficiency tips:
* pay statement balance .. cardHistory

==MB::FnF ..

Click into ccard or RBBT account -> choose payStatamenetFullAmt or payStatementMinAmt

23 Feb 2017 will be first time they charge me. Only after it’s charged can I call in (1800-629 2265) to request automatic waiver (1D turnaround). Once waived, will show in Mar bill.

Maybank e-banking keeps last 11 months’ statements IFF you opt for eStatement: left menu -> creditCards -> transactionHistory

cCard# is visible in inetBanking 🙂

— sugg: reduce MB ccard transaction counts

xp: the more transactions, the harder my effort grew during exp-recon, because MB ccard transactions are not so easy to check:

  • transaction date vs posting date
  • I often check my DBS transactions many times a week. If I were to do that for this ccard, then the Mayb website would miss most of my recent transactions. Instead I must use SMS… lower efficiency
  • Sometimes, the SMS can go missing.
  • Suppose you run another recon after 4D, the chance of uneventful recon is .. 92-95%. Risk of “recon event”is rather high. Therefore, this represents the #1 biggest headache and the weakest link in my exp recon process
  • .. the online tx history doesn’t show a running balance after each tx. This makes it hard to reproduce a previous snapshot.

— 8% in 10 spending categories for FF ccard:

Zofia, We can earn 8 cents for every dollar spent in 5 categories:

  1. Groceries like Giant, NTUC,
    • Since we will hit $310 easily, I don’t ever need to borrow wife’s MB card.
  2. Restaurants like Ichiban(confirmed)
  3. Kids shops like Popular Bookstore(confirmed), ToysRUs (confiremd), but KiddyPalace is questionable
  4. Pharmacies like Watson’s (confirmed), Unity (confirmed), Guardian(confirmed)
  5. Telecom like Starhub

Maybank gives only 0.3% with Lazada, electricity,,, (no category)

Each category has a cap $310/Month [posted within 1-31 May window]. If you “post” more than $310 over 1-31 May, there’s no more 8% cashback, for a particular category. The Maybank app on my phone can show me something like “$290 spent so far this month in Groceries category”.

https://www.maybank2u.com.sg/iwov-resources/sg/pdf/cards/fnf-cashrebate-tnc.pdf has the most details

 

cpfVCon>SA #IRAS #Rule37740

Posted on by tiger40490

— Wife cpfSA..
First housing-refund to cpfOa. After full (housing) refund to cpfOA, we can consider voluntary cash top-up to cpf split 3-way, then cpfOA -> cpfSA

Sooner or later, by her age 55 I want to give her enough red_packet for FRS, so shall we do it now? See answer in https://tanbinvest.dreamhosters.com/17194/age-50-asset-allocation-aggressive/

— rules governing the VCon 3-way split
Rule: no limit on SA. Any contribution (by employer or voluntary) will go into SA. In contrast, top up to SA-only .. won’t be allowed after you hit FRS.

Rule: the 3-way split is computed first. If MA has reached 66k, then the MA share will overflow to OA. This is very likely to happen, so SA would end up receiving about 21% of the total contribution, and OA receiving the remainder.

Rule 1: if 5k of your contribution exceeds the annual limit $37740, that 5k will be refunded to you without interest [Rule 1b] and without penalty.

Any OA amount you contributed can be used for housing.

tax exemption (and liquidity restriction) doesn’t cover VCon

— Risk: cpfSA IRF(interest rate floor) is subject to change. No guarantee like cpfOA IRF of 2.5%.

cpfSA rate has been above 4% since 1995.

— Q1: How about housing-refund to my cpfOA by 50-100k.

(necessity)big-ticket items pre55: CPF top-up has a conclusion.

— Q2: shall we transfer some amount from OA to SA?
Is this transfer safe for wife’s account? I think 1k is ok but she may not understand the implications.

— All CPF accounts are illiquid to varying degrees. Some amounts in OA and SA can be invested. Some amounts in OA/SA can be withdrawn at 55. Some amounts in RA can be withdrawn at 65. CPF-life is the most illiquid.

A cash Top-up transfers liquid cash from bank account into illiquid CPF accounts. Top-up is usually irreversible — You can’t withdraw anything into liquid cash, with certain exceptions.

Lock-in/lock-up means no withdrawal, and is the main drawback of top-up. As to the benefits of top-up, there are two

  • top up 33k to SA and this 33k would earn interest (around 4%) in SA, but this interest is not usable as cash
  • top up 88k to CPF-life and this 88k would produce monthly payout in cash 🙂 and the return rate is rather high.

— At age 65, RA will be used to pay annuity premium, and monthly payout will start.
Any excess across CPF accounts would probably be liquid.

— After age 55, there’s a limited level of liquidity, perhaps incompatible with my plan
— At some time before 55, when I pay down a mortgage, this is the best level of liquidity in CPF-OA
— Here I discuss four forms of top-up.
B1) IFF at 65 you don’t have ERS (Enhanced retired sum) in RA, and decide to top up 100k into RA (not to exceed the ERS), this 100k will be locked in and generating compound 4%. This 100k starts producing monthly payout at 65.

The earlier you top up, the more interest you earn, at the cost of liquidity. For example (I described at Sep 2022 CPF appointment), If you set aside 100k 6M in advance, then you can top up 100k 6M before 65th birthday. Waiting period is 6M. During the waiting period, your 100k earns 4% in RA.

B2) You can also top up, say, 50k to RA at, say, age 58 (after 55), and this 50k would be locked in for a lengthy 7 years until it transfers into cpf-life and starts “producing”.

CC) If you (VCon) top up before age 55, then it (partially) hits SA. You can withdraw it at 55 or any time

CPF confirmed that $2k transferred from OA to SA will earn $30 (1.5%) more every year.

DD) if you top up to OA (up to the housing-refund limit), it pays down the housing portion. This is an interesting option. — discussed in depth at (necessity)big-ticket outlays now till 55

— decision to make at age 65, not 55!
At 65, CPF members choose how much money to committed to CPF-life. The amount will be locked in.

No real minimum participation amount — Even if you have only 20k in RA, it can still transfer to the annuity account.

— Rule 37740 .. Not a separate rule, but a consequence of the 6k rule on OW and 30k rule on AW.

For a max-earner, the contribution “engine” would self-stop (like a self-driving car) at $37740. By design, the engine would never break the 37740 rule and lead to refund from cpf. (If a payroll software system doesn’t use this engine, it could break 6k rule or 30k rule, resulting in refunds from cpf.)

Let’s illustrate with real eg. In my 2021 (and likely 2022),

  • AW [additional wage] contribution by employer+employee was capped at 37% x 30k = $11,100
  • .. If your bonus exceeds 30k, the surplus bonus is ignored by the engine
  • OW [ordinary wage] contribution was capped at 37% x 6k x 12M = 37% x 72k = $26640
  • ^^ add up to 37% x 102k = $37740, also equal to 17M of 6k/M x 37%. As a breakdown
  • employer’s contribution was actually capped at 17% x $10,200/Y = $17,340
  • employee’s contribution was actually capped at 20% x $10,200/Y = $20,400

Deciding factor for the “max-earner” is …. 30k bonus!  If AW hits 30k and OW hits 6k,  then you are (regarded by CPF system) a max-earner and should not make a VCon [voluntary contribution]. Here’s why.

VCon is designed for non-max-earners. Max-earners’ accounts  already receive sufficient OW/AW contributions, so CPF board probably don’t want to pay such high interests on additional amounts contributed by these max-earners. Any VCon would be 100% refunded at end of year, without interest. You would be lending that amount to CPF board at zero interest.

[22]targeted top-up to wifeSA

Posted on by tiger40490
  • j4: yield
  • J4: lock down free cash against missteps or hackers
  • limitation — very poor liquidity.

See also

Rule 1: every $1k I top up to wifeSA is locked up forever. I wrote this in 2022. See wife’s geen portion

Rule 2 (Self-transfer): in my own case, any time after 55, I can apply to withdraw any excess amount from RA as long as remaining RA balance exceeds the BRS watermark. So in 2021, any self-transfer from OA to SA is “unrestricted”… can take out after 55.

— tax benefit .. comes with a severe restriction — any targeted top-up amount can’t be withdrawn at any time, not even after 55 or 65.
* MA account can’t be withdrawn except medical

Rule: Suppose I want to top up 8k in 2024 to enjoy tax benefit:
wife’s 2023 (pervious year) income must be < 8k including dividend, interest etc

Rule: only applies to targeted cash top-up to SA or targeted top-up to MA, including to family member’s accounts.
.. Rule: OA -> SA is unrelated to “income” and ignored by IRAS.
Rule: only the first $8k is recognized by IRAS for each tax year.

VCon amount of 37k (unlike targeted top-up) is NOT tax-exempt even though part of this 37k goes into SA/MA. (As confirmed at cpf appointment), the amount can be used for housing or withdrawn after 55.

In essence — Tax ^ Liquidity are 2 sides of a coin:

  • with tax benefit, you sacrifice liquidity .. Look at targeted top-up
  • without tax benefit, you have some liquidity .. Look at VCon.

[21]cpfRA for liquid parking@4% #green^red

Posted on by tiger40490

 

Rule 1: After RA is created at 55, you can top up directly to cpfRA. Cpf dashboard will show your “cpfRA topUp each year” including OA->RA transfers. Supposed they add up to 99k over 9Y, then this portion (red portion) of your cpfRA is implicitly locked up, and never f4w (free for withdrawal from cpfRA).

Rule 2: By pledging your portion of your flat, you can incrementally withdraw from green_portion , defined as the age 55 snap55_FRS_minus_BRS.

The green_portion of cpfRA is freed up and becomes f4w when your pledge is approved. This portion starts at 50% of the cpfRA balance. As cpfRA grows, green portion will become a smaller portion, even if dollar amount remains.

Here’s an illustration. Suppose at 55 your cpfSA balance is 284k when FRS watermark is at 250k. This FRS amount will transfer to cpfRA, and the remainder to cpfOA. Now you can [Rule 2] incrementally withdraw the 125k green portion from cpfRA. Meanwhile, you can also top up cpfRA (see cpfRA top-up till 65). For example, you can top up 35k to the red portion, and subsequently withdraw 30k from green portion. Due to Rule 1, this 35k top-up amount is locked up in the red_portion, in some hidden tracking account. The green_portion is now 125k-30k.

After 55, cpfOA balance is also f4w. Only after (not before) you exhaust that, should you withdraw from the green_portion of cpfRA. Don’t touch the green_portion too early and lose the cpfRA interest.

It’s advisable for my wife to max out the snap55, by topping up to OA or SA before 55. If you top up 100k right [1] before 55, this amount becomes basically “free parking” in cpfRA earning 4% compound.

[1] If you top up 3Y before 55, then this amount is inaccessible for 3Y 🙁 However, if you have idle cash not needed for 2 years until age 55, then you can “deposit” that to cpf OA/SA and wait a short while to have it freed up.

Q: Pledging property…. Is my wife a 50% owner or 5% owner? What if she refunds all of her OA amount?
A: still she is considered a co-owner.

— conditions for withdraw from greenPortion

  • RA balance is above FRS
  • if $0 “housing usage”, then submit additional docs to prove that you have a usable Singapore property with enough cash value.
  • .. It’s advisible to leave a bit of housing usage.

(necessity)big-tickets pre55 #boy20.5@2029

Posted on by tiger40490

Before 55, I can housing refund 150k to cpfOA. This amount will lose liquidity.

Q: … but if there’s nothing to require the $150k, then who cares? This blogpost is mostly about the necessity outlays, rather than discretionary items, that I may need before 55.

Note Any time after 55, I can withdraw everything else after committing BRS to RA.

Note on my 55th birthday in 2029, boy is aged 20.5.

Conclusion — to gain 2.5% interest I give up a few year’s liquidity. Not worth it.

— big-ticket: SG home upgrade. Can use OA not SA.
For the proposed OA->SA top up, This big-ticket is perhaps the only big-ticket.

— big-ticket: stocks or gold? Not necessity nor big-ticket items but yes I might want to invest and build up sizeable amounts.
— big-ticket: Medical cost? I think am taken care of in SG (see the blogpost on Cushions), and will be taken care of in the U.S.
— big-ticket: college funding? Discretionary item, as I don’t want to take it on as my job, _b_u_t_ the more spare cash I have, the more flexibility. More importantly, this expense happens mostly after I turn 55. At 55, my son is only 20.5

— big-ticket: U.S. property investment? Discretionary item _b_u_t_without it my rental cost is quite heavy.
So far, I have preferred Asia properties.

When I move to the U.S. I probably want to invest in properties using USD, not SGD.

 

max out CpfLife P2: How #liquidate

Posted on by tiger40490

See also

— @55 is the time to MAX-out on cpf-life

As I confirmed with CPF hotline, let’s compare two twin brothers aged 55 around 2030

  1. AA has extra balance in OA or cash, so he immediately tops up (straight into RA, without split) up to the ERS watermark (eg 500k). Each year thereafter, ERS watermark would rise (by projected 3%), but new ERS watermark would never exceed his 750k balance accruing at 4%.
  2. BB only hits max at or after age 65, to the 2040 ERS watermark. This ERS watermark is most likely far lower than 750k, probably something like 600k.

AA’s plan is the max-out plan i.e. his cpfRA snapshot65 would be the maximum possible.

In terms of the growth of 500k in their wallets as of 2030

  1. AA relies on 4% compound over 10Y by CPF
  2. BB relies on his own investments, which could produce higher return in some years and lower return in other years

In terms of liquidity of the 500k

  1. cpfRA balance has the worst liquidity.
  2. your own investment can also get stuck around age 65, so you are unable to liquidate it for CPF-life

CPF online estimator shows that as of Sep 2020,

  • for someone born 1955 (age 65 in 2020), 275k would immediate generate about $1400/M in basic plan. Assuming 275k is the ERS, then this person is not allowed to top up beyond 275k.
  • for someone born 1965 (age 55 in 2020), 275k (would become some bigger amount) would generate about $1900/M payout
  • Suppose the twin brother of 1965 guy delays top-up by 10 years, and then does a top-up to 275k (not the new ERS), I bet his payout will be closer to $1400 than $1900. By this time, his early-saver brother has grown his 275k to 410k (monthly accrual), generating $1900/M

So the early top-up guy receives significantly more monthly payout due to 10Y loss of liquidity.

— My current plan — grow some 200k in my own investment account outside cpf. Then top up cpfRA only at the last moment.

  1. Before 55, double-check and triple check that green_portion is feasible.
  2. Once confirmed, if I have 500k cash including FLI150k but excluding USD, I might permanently lock up 50k in the RedPortion of cpfRA.
  3. .. (If you top up 50k to cpfRA at age 58, then this 50k would be locked in for a lengthy 7 years until it transfers into cpf-life and starts “producing milk”.)
  4. Before wife reaches 55, we will build up towards her green_portion of cpfRA (unborn). See [25]build up150k]wife’s green portion – dTanbinvest
  5. When wife reaches 55, I will take stock of my SGD liquidity position (600k?), USD cash position (200k?), income security,,,,
  6. Approaching 65, progressively liquidate assets to aside enough cash, not necessarily the full ERS.

— what assets to liquidate
See also ## assets2designate as legacy #after65

  • My 3 annuities
  • My USD idle cash
  • If I live in the U.S. at that time, then liquidate Asia properties. Hopefully they have recovered by then.
  • If I live in Asia, then liquidate U.S. properties.

max out cpfLife P1

Posted on by tiger40490

CPF-LIFE Liquidity is terrible, inflation-protection is limited (i.e. Escalating payout plan), although payout_rate is high (Y cpfLife payout_rate so high). I worry about imported inflation in Singapore. Assuming I have enough reliable non-work income already, I might put in (and lock up) the minimum amount.

— why it’s a plausible idea to do the max-out only close to 65:

If you top up close to age 65, then no waiting-period like the “accumulation phase” in commercial annuity or endowment policies. At age 65, I top up 100k to RA and immediately start receiving payout from this 100k top-up. Too good to be true but I did confirm with CPF. Estimator also shows that for someone born 1955 (65 in 2020), a 275k balance (top-up) would start producing right away.

— compare to other annuities

Allianz annuity as(poor)cousin@CPF-life provides the best argument why I favor CPF-Life among all annuity products.

I have 3 commercial annuity products [FLI2, FLI2PF and LTIS]. How likely am I to hold them past 65? I will avoid giving a biased impulsive answer. IIF I were to hold these till 65, then I should reduce cpfRA top-up due to inferior liquidity of cpfLife. My commercial annuity products are fully liquid. 

— compared to other nonwork incomes

This CPF annuity has the worst liquidity but the best credit rating among all my nonwork income generators. Zero currency risk.

At 65, my risk appetite and risk tolerance are relatively low, so it may be appropriate to liquidate my overseas or local properties to hit ERS for both me and wife, but total sum would be SGD 700k in cash, possibly too ambitious.

— Warning — CPF LIFE return is higher for a person who participates only with the BRS. When you double your CPF LIFE participation amount from 90.5k to 181k, your payout range is not doubled ( $1,390 is less than 2 x $750 ). This can be easily seen from the projection by CPF. Why?

Answer from CPF officer: it’s all due to tiered (non-linear) interest rate. First 30k earns additional 2%; next 30k earns additional 1%. No magic.

So if SGD 700k cash is challenging, we should try to hit lower targets for both of us.

 

 

SA cash top-up@@ No! Prefer OA→SA

Posted on by tiger40490

Here’s one hidden and confusing restriction about SA top-up: cash top-up to SA can’t be withdrawn at all, even after 55, even if you hit BRS and pledge your property. See https://www.cpf.gov.sg/Members/Schemes/schemes/retirement/retirement-sum-topping-up-scheme and the diagram in https://www.cpf.gov.sg/Assets/members/Documents/Illustration_of_topup_monies_in_RA.pdf

“Cash top-up” means from outside CPF, such as bank accounts.

The liquidity-smart route to SA top-up is

  • $100k housing-refund from bank account to OA, assuming your nett OA-usage for housing is below $100k
  • $100k transfer from OA to SA, assuming your SA is below FRS

This way, you effectively move money from bank account into SA to earn the very lucrative 4% compound interest, and you still can withdraw it after 55. I confirmed this with CPF hotline.

Q: how much, if any, should we transfer from OA to SA, knowing it might become somewhat “free” after 55? See this blogpost

— https://www.bereadywithcpf.gov.sg/articles/how-a-singaporean-accumulated-cpf-full-retirement-sum-in-his-special-account-by-the-age-of-34/ is a personal story featured on CPF website, where a 34-year old SG national did a lot of OA->SA transfer and cash top-up.

See also my blogpost on 1m65

%%big-ticket outlays: 55-65

Posted on by tiger40490

This analysis applies to any amount I transfer to wife’s CPF-SA.

If between 55 and 65 I were to top up $100k to RA to earn 4% interest, that amount is locked in and can’t be spent on “anything”, but is there anything to need that $100k? If nothing, then who cares? After 65 I would start receiving CPF-life payout from that $100k.

— U.S. home purchase or property investment?

— college funding?

— Medical cost?

— cumulative repair costs in U.S., which tend to be much higher than SG

annuity: how much + how long to grow

Posted on by tiger40490

Annuities (possibly inferior to CPF Life) pay out as high as 8.6% of the premium each year, after a 10Y wait. Very attractive, but the liquidity is horrible. So before I commit myself, we need to decide:

Q1: how much premium to invest — knowing you can’t get anything out until the payout trickles in.
Q2: how long to wait (growth phase) before payout trickles in.
Q3: do I need surrender value to be at least equal to premium? By default, surrender value declines as the payout depletes it.

Note property has better liquidity and is my core portfolio.

A1: most likely I would prefer the smallest, $10k if possible. 100k would be too big a commitment. I believe the payout rate is independent of the premium quantity.

A2: I would probably prefer the shortest growth phase, which damages payout rate, perhaps down to 5 or 6%?

A3: no need.

TJJ’s fair amount of RMB asset

Posted on by tiger40490

To keep things simple, we will assume the shares of TB, LSQ and TJJ is 20:40:40. TJJ’s RMB amount is therefore 40% of Rmb7800k = Rmb 3120k. This 3120k has always stayed in LSQ’s account, but belongs to TJJ. There is no question about this amount. The question is

Qn1: How much personal cash assets TJJ has, in his own bank accounts?  We are focused on how much he should have, as a legitimate, fair share of the couple’s shared assets.

As of mid 2024, right before the 7800k sale, TJJ used one bank only i.e. ICBC (PSBC account was dormant and empty).

  • 380k in ICBC TimeDeposits
  •  80k in ICBC savings
  • no USD in ICBC
  • ——
  • total Rmb 460k

It’s simple yet not unfair to assume that Rmb 460k is the estimated final amount of TJJ’s personal cash asset on his final days. There have been inflows and outflows but these flows largely cancel out each other. Some inflows and outflows are passing through his account and should not affect Qn1.

  • inflow: one-off 100k from 文学所. Supposed to be given to LSQ for DJDJ fees, which add up to about 400k/Y. (100k is an under-payment to LSQ.)
  • inflow: monthly salary, but this used to be given to LSQ since LSQ is paying all family expenses.  (Perhaps an overpayment to LSQ.)
  • inflow: LSQ transferred a few five-figure amounts to TJJ
  • outflow: TB transferred a few amounts including amounts to buy USD. All part of TB’s 20% in transit.

Anwser to Qn1 is 3120k + 460k = Rmb 3580k. I propose to use 3600k as a simpler estimate.

inheritance ex_China

Posted on by tiger40490

 

I feel lucky that DJDJ offers free legal counselling hotline 8525 7135 (护法银龄) exclusively to its paying customers. I will consider paying them for their professional advice.

Imagine one aging parent has 6M of life expectancy. I described my two choices to the legal counsellor. They said #1 (one-shot) is superior:

#1) leave a large cash balance in the aging parent’s bank account. Rely on official SAFE regulation to get the three inheritance amounts released in one shot

Observation: It takes less than “several months” to get the cash distributed to 3 survivors.

Rule: Using authenticated proof, you (and I) can engage SAFE to get your portion released. Few bankers know how to do it, but Bryan Du said HSBC has experience with inheritance by foreign passport-holders.

#2) move cash out of the aging parent’s bank account in advance, to avoid inheritance tax… but there’s no inheritance tax regulation as of 2024.

They also advised me to call SAFE gov hotline… who are familiar with foreign passport holders taking out inheritance. I get the impression that this particular gov system (SAFE) is not so bureaucratic, inefficient, ineffective.

Observation: Inheritance law has been proposed many times but still not implemented. It may take years.

PRC gov policy may relax or tighten (close loopholes) capital control any time, but inheritance law is more stable.

q[property_income]钱生钱: diverging preferences

Posted on by tiger40490

In economics, property_income is an umbrella term for cash cow income i.e. 钱生钱. It is a subset of passive income and nonwork income.  https://en.wikipedia.org/wiki/Property_income lists 3 common types of property income:

  • RR) rent .. main risk is political, legal, physical risks
  • II) interest (+dividend) .. usually periodic [1].
  • PP) realized profit
  • —-
  • aa) realized rEstate appreciation .. is not property_income IMO. This profit is similar to buy/sell of paintings.

Company profit can become unrealized gain for a small partnership, but in stock market, profit shows up as either dividend payout (or buyback) or stock rally.

[1] 1 in 20 credible stocks have a history of random dividend that is utterly unreliable. In all other stocks, either there’s no expectation of dividends, or management has the responsibility to meet shareholder expectation of non-zero dividend every year.

— I am different from peer investors in my attitudes towards property_income
Many of my U.S. peers favor PP, like a windfall
Many of my Singapore and China peers favor aa over PP (denoted “aa > PP”)
I am different. I favor RR > II > PP

— credit risk .. affects II most, also RR
— market risk .. affects PP most, and also dividends

PFIOL=PF intOnlyLoan #PFSA

Posted on by tiger40490

PFIOL = prem financing interest-only loan
Wayne pointed out “interest-only” is quite common wherever lender owns an insurance policy as collateral. I am the beneficiary not the owner of the policy.

Q: why this PFIOL is acceptable while others aren’t? Actually I don’t remember the others in detail

  • A: current LIR is high, so I can easily visualize high LIR. Worst-case plann is easier.
  • A: pay_down is easy and free. simplicity
  • A: I can liquidate full policy after 36M. Prison term is shorter. simplicity
  • A: loan quantum is relatively small
  • A: no currency risks
  • A: LIR risk is “contained” within the final 14M window… simplicity

Q3: pay_down? See quote below
A: Note the first 2 of the 3 windows have good LIR. During the 3rd (final) window, if LIR skyrockets, I ought to pay down, perhaps using the first FLI2, or my USD (around 200k), provided by then I have yet to deploy USD elsewhere
A: After prison term, I think I should pay down iFF I have too much idle cash and unable to genertate 2.77 ppa (an hypothetical LIR).

Q3b: Both loans carry the same LIR, so pay down which first?
A: FWD, because I may soon surrender this one, and keep FLi250 leveraged.
A: FLi250, to protect this deal from default hazard

— COF is the overall cost across the CIMB buseiness.

🙁 COF is opaque, not as transparent as Sora.

👍 COF is stable… Sora is too volatile for the lender, so a thicker buffer (1 ppa spread) is imposed.  As of Nov 2024, for all-in LIR, Sora is worse than COF.

CIMB offers COF to loan customers as an option. If uncompetitive, customer can choose Sora, or customer can pay off the loan or default.

As of 27 Jan 2025, COF is 3.09 ppa.

— GIRO .. Repeated Giro failures would prompt Cimb to terminate the loan via policy surrender. (Annual prepayment is not an option.)

Scheme 1 .. To minimize monthly operational risk, I can switch to FWD monthly payout option. I will only withdraw surplus balance from PFSA [PremFinancing service acct] once a few months.

Scheme 1b .. after I receive each annual payout, I will withdraw surplus and leave sufficient balance for 12M

Current Scheme 2 .. Remind myself (gCalendar?) to top up PFSA periodically (quarterly?) and monitor PFSA balance as part of recon.

— I Looked into why (based on 3% loan rate for the final 19M) the net loss is so much higher than in the Singlife deal. I think the main reason is … I’m paying CIMB 6 months of additional interest. 3% x 190k for 6M = $2850 of additional interest. This $2850 is partially offset by a higher upfront rebate (1.87% vs Singlife 1.37%) and higher annual payout rate (3.38% vs Singlife 3.21%)

Actually, I will have more than 228k idle cash sitting in some bank accounts. During the final 14 months, I might be willing to keep the 228k loan at 3% LIR, and simultaneously earn a higher DIR. This /stance/posture/attitude/perspective/ might help cushion the pain and regret of “exit FWD deal at a loss”. That’s Scenario A.

Here’s Scenario B. The earliest exit time is Nov 2027 for FWD. If in early 2027, I foresee that I will exit ASAP, and I can’t earn a better DIR than LIR, then I would sink in up to 228k to pay_down (or even wipe out) the loan. This will make the end-to-end PnL positive (or less negative :). I think this is viable, according to the email thread “loan pay-down i.e. partial pre-payment”.

However, the bigger my total PFL quantum, the heavier is my debt burden, the slower I could pay_down. I would probably surrender my very first FLI2 for pay_down. 

Penalty for prepayment? See loan offer letter. Two scenarios — 1) within free-look period 2) short-notice. Silvester replied that

There’s no lock in for the loan and you can choose to redeem anytime. However, there is a 1 month notice period for partial repayment, and 3 months’ notice period for full repayment. Since there’s no limit to partial repayment, if such events were to occur, you could partial pay off majority of the loan after 1 month. It will be left with $10k as the remaining loan which you are able to pay fully and redeem your policy 2 months after your partial payment.

 

placeholder

Posted on by tiger40490

This comparison proves to me that cpfOA is an inferior parking space.

Therefore, I should consider housing refund from FSM to OA to SA.

SA OA FSM bank
(comp)return@$1k marginal amount 4% 2.5% 2-3%
.. dependable return? yes no yes
how soon can take out without loss age 55 6M 1D
use for edu #after 55? BRS yes
use for housing before 55? no yes yes
use for U.S. housing/edu? no no yes
use for stocks mostly US no unlikely yes

(involution)躺平[def]=barebones ffree #w1r2

Posted on by tiger40490

 

Set in the contemporary China context, This blogposts compares 躺平 to barebones_ffree, and then clarifies the fundamentals of involution vs 躺平, two popular but vague Chinese phrases open to interpretation and widespread misuse. Every writer on the subject has had to clarify them, otherwise they are pretty much meaningless.

https://www.channelnewsasia.com/news/asia/china-lying-lie-flat-low-desire-life-work-15152540 is the first article I read. Target group is young professionals in their 20s to 30s. The bbc1 article says “中产阶级的年轻人”.  (Other articles have different target groups. ) The same 躺平 actions and attitudes will, thanks to social media, gain currency at the _lower_ socioeconomic /strata/, but somewhat involuntary and under crushing force. That’s largely because of economic position. (Remember, micro-economics is all about personal choices.) In 10 years, I don’t know which target groups will be more associated with this phrase, but for the time being the most relevant group consists of highly educated, highly mobile and in-demand professionals in their 20s to 40s, basically the two generation after me. This group is more established, with more resources, so their 躺平 is less involuntary. more resignation than surrender.

處事態度具体内涵包括“不买房、不买车、不工作、维持最低生存标准，拒绝成为他人赚钱的机器和被剥削的奴隶”.  I have omitted those other attitudes drastically different from me. Still, there’s too much to read. In this blogpost, I will pick a few points relevant to me.

— sucessE, successZ
躺平 and 摆烂/bai3lan4 are popular among Chinese graduates and young parents, but actually Applicable across age groups. They are comparable to the broad definitions of successE and related to successZ.

— ffree based on minimalistic spending of the young elite
A 27-year-old architect in Beijing said she started saving as a teenager to achieve financial freedom. Same as me.

“From September 2020, when I saw all my savings had reached 2 million (yuan) (US$300,000), I lay down…” Nana said she turned down a job that paid 20,000 yuan (US$3,000) per month.