S. M. A. R. T. Investing with TSK

Topup CPF SA vs RA for tax relief – Irony? Why the “young” and the “old” have different focus/objectives?  Or is it because they are both ignorant of what can be done and the benefits? Young (below 55) Prefer to do yearly cash topup to CPF Special Account (SA) of $7k to get tax relief, instead of transferring their OA to SA as soon as possible and let compound interest balloon their SA to beyond FRS earliest possible. (assuming they don't need OA for Housing). Old (above 55) Prefer to transfer SA/OA or cash topup to RA to hit ERS (Enhanced Retirement Sum) at 55 and let it balloon with compound interest, instead of doing topup to RA to get annual tax relief of up to $7k per annum for personal and get tax relief for others if there is still room? Income tax relief is supposed to be more valuable at an older age assuming higher income levels? So why are you making such a decision? Which comes first? Which is more important? Which can help you “guar...

I read that Ms Lorna Tan, ex- The Sunday Times' Invest editor, is now Head of financial planning literacy at DBS bank.   She wrote the most “impressive” article in the Sunday Times on Oct 20, 2019.  Many Hwz forumers “cursed her like mad” for “killing” their lobang, ie. How to Stop CPFB from Transferring your SA to RA. Now I know why she left her “most impressive” article with u for greener pastures!  She also shared how she make use of her Dad's RA as her investment vehicle. Her dad is 84, RA almost depleted, so she can topup his account with cash to get tax relief plus up to 6% interest on first 30k and 5% on first 60k. She did not mention whether she transfer her OA to his RA, so u make your own guess. Her monies in his RA will balloon with compounding interest as her Dad's RA is under RSS, not compulsory to receive mthly payout. If her DAD needs money, she will ask him to start mthly payout. Lorna Tan's story is similar (not exactly the same) t...

Why CPF Policies Make the Rich Richer? Part2 More CPF Policies with loopholes created by CPFB Policy Makers and approved by the MOM continue to make the Rich Richer! And these are not shared publicly yet, by Ms Lorna Tan or any financial blogger? This one I did not write to CPFB to double confirm. Someone shared: A few weeks before 55, he invested his SA (leaving 40k balance) to stop CPFB from transferring the monies to RA. His balance in OA plus 40k in SA is less than FRS. CPFB transferred SA (40k) and OA (leaving 5k) to RA, total in RA is less than FRS. Later he transferred OA (5k) to RA. What he should have done is topup cash to RA as this topup will entitle him to claim tax relief (subject to limits). He missed the opportunity cos he is not aware of this “loophole”. He is also not aware of more “loopholes” in the CPFB @55 Policies which only the “Rich” can benefit: A few weeks before 55, he could have invested his OA (leaving 20k) ...

Why CPF Policies Make the Rich Richer? #1.   First obvious CPF Policy to make the rich richer is CPF@55 loophole/HACK where the rich can stop CPFB from transferring their Special Account (RA) monies to Retirement Account (RA) at 55.  Ms Lorna Tan shared her exploitation of this loophole in the Sunday Times on October 20, 2019.  Read this link on the details. If you read the CPF FAQ on CPF withdrawal rules and its rationale carefully, you will notice that there is a conflict of interest by CPFB Policy writers. Below is extracted from the CPF website: CPF rule quote: "The savings in members’ various CPF accounts attract different interest rates according to whether they are long term or short term funds . ....... When members turn age 55 , their Special Account savings up to the Full Retirement Sum, is transferred and set aside in the Retirement Account, to provide them monthly payouts to supplement their living expenses when they...

Finally, Ms Lorna Tan published this “CPF Hack” article in the Sunday Times today, October 20 2019!   ( Read what I wrote in May/June 2019 on this CPF Hack here) Only after she had exploited the benefits on her 55 th birthday last month, “enjoy” it herself first before she shares for “fear” it might be gone before she could exploit it? So it is true! CPFB policy at 55 is written to benefit those who know the loophole and are “rich” enough (sufficient monies in OA and SA) to exploit it before they turn 55! Why must such public policies be written to benefit the rich only, to make the rich richer?  Why only those who know the loophole can benefit from public policies, when such CPF public policies should be transparent to benefit all CPF members?  U mean only the “rich” pay more income tax, so they should be given some loopholes for them to “take back what they paid for”? I have been waiting for Ms Lorna Tan to publish this CPF Hack since ...

Be Ready With CPF Roadshow 2019! It is that time of the year again, CPF had planned roadshows to be held at various locations until the end of the year. Yes, time to collect freebies at the roadshows again, haha! Today, CPFB took out a full page colourful advertisement in the Straits Times. I bet you still do not know that the first Roadshow will he held this weekend at Suntec? Because nothing is stated in the full page advertisement! What is the purpose of this full page colourful advertisement (it is not cheap to advertise)? Hmmm.... take note of the small print at the bottom of the advertisement, note 2 on transfer of savings to Retirement Account (RA). It is stated: “ For members aged 55 and above, OA savings will only be transferred after SA savings have been fully transferred” Bingo! You can stop CPFB from transferring your SA monies to RA (except $40k + Cash topups exceeding 40k) by using the Hack explained in here , then monies in OA will be transfer...

CPFB started to talk about Risk Pooling only in April 2019 after being queried at Parliament. They have never talked about Risk Pooling since CPF Life was introduced, not even in any Life@55 Talks! Do you know are there other important information CPFB is still not telling you at Life@55 or @facebook? In the past (eg 2014), members have to decide/choose their CPF Life Plan (ie Standard vs Basic) at 55 and part-CPF Life annuity premiums would be deducted from their Retirement Account (RA) for transfer to the CPF Life Pool. Only at 65 when monthly payout starts will the reminder of the CPF Life annuity premiums be transferred from RA to CPF Life Pool. For members turning 55 after July 2015, they only need to choose their CPF Life Plan (ie Standard, Basic or Escalating Plan) if they decide to start payout at 65 or delay till 70. Most members will choose their CPF Life Plan based on guidelines provided by CPFB as follows: Choose Standard Plan if you want more monie...

How to Stop SA to RA Transfer at 55! Your monies in CPF Special Account now earns 4% pa while your OA only earns 2.5%. But CPFB will empty your CPF SA into RA at 55. How can you stop this auto transfer of all monies in SA to RA at 55? Yes, you can do it because there is a big loophole created by CPFB policy makers. If you know the loophole and how to “protect” your SA funds (except 40k) from being automatically transferred to RA on your 55 th birthday, you can continue to earn higher interest of 4% on SA balances. Do I need to explain why having a higher balance in SA is better than a higher balance in OA after 55? One obvious benefit is you are “guaranteed” of a higher cash inflow from the 4% pa interest on SA which you can either withdraw every year or leave it in SA to compound and snowball into a bigger retirement fund. So what is the loophole and how can you “protect” or stop CPFB from transferring all your SA monies into RA? Click here to learn ho...

CPF@55  Policy Designed to Make the Rich Richer! Do you know that  CPF@55  policy can help you get richer with a bigger SA (Special Account Balance) after 55? Yes, provided your are rich with a big OA (Ordinary Account Balance) and SA which exceeds the FRS (Full Retirement Sum).  Assuming you have $240k (SA), $160k (OA) and FRS is $200k, this is how you can become richer after 55: 1.  2 weeks before your 55th birthday, buy a stable Unit Trust Bond Fund with $200k SA under CPFIS/SA investment scheme (minimum $40k SA must be maintained) 2.  On your 55th birthday, CPFB will transfer $40k (SA) and $160k (OA) to your RA (Retirement Account) to form $200k FRS. 3.  Next day, sell your CPFIS/SA investment of $200k, this will be returned to your SA. 4.  You now have $200k (SA) and $0 (OA) after RA is created! What happens on your 55th birthday if you did not do the hack (ie. step 1&3) above?  CPFB will transfer $200k (SA) to...

Yes, I found the relevant section/clause of the CPF Act on Offences relating to investments, see extracts below: A.  CPF Act Offences relating to investments     58A.—(1) No person shall, directly or indirectly, in connection with the making of any investment under any scheme in accordance with any regulations made under section 77(1)( n ) or the sale or disposal of any such investment —              (a) employ any device, scheme or artifice to defraud; or  (b) engage in any act, practice or course of business which operates as a fraud or deception, or is likely to operate as a fraud or deception , upon any person. (2) Any person who contravenes subsection (1) shall be guilty of an offence. B.   By a layman's interpretation of the above clause in the CPF Act, the "CPF Special Account Hack" should be classified as “an act which is likely to operate as a deception”, to deceive CPFB to tra...

CPF Special Account Hack - Are You Ready? - Part 2 Questions: 1. Should CPF Policies/Rules be written to benefit the Rich Only? To make the Rich Richer? 2. Should CPF Policies/Rules be written to benefit those who know the “loophole” only? 3. Should CPF Policies/Rules be written to benefit those who know how to exploit the “loophole” only? 4. Should “tax payers monies” be “distributed” to benefit the above “elite” group of people who know how to Hack? Why does CPFB allow such Hacks to occur “undetected”? A. Investing via CPFIS-SA: CPFB Rationale “A member can choose to invest his SA savings above $40,000 under CPFIS-SA. However, all investments are subject to risk. Risk refers to the possibility of losing part/all of your investments due to financial market changes. Assuming a member has $200,000 in his SA and uses $160,000 to invest under CPFIS-SA. Although he can liquidate his investments after reaching 55, the amount of sales proceeds he will...

CPF Special Account Hack you must know to Retire Rich! Don't miss the boat to Retire Rich! What the Hack! We already missed the boat to Retire Rich? Yes, it is “approved”, written in the CPF Board website rules, but only if you know it and can see the “big loophole” created by policy writers! Here is how it works, as “approved” in the CPFB policies/rules: A. How is the Retirement Account (RA) created? When a member turns 55, a CPF Retirement Account (RA) will be created for him. The Board will first set aside his Full Retirement Sum (FRS) in his RA by transferring funds in the following account sequence: 1.    Funds in his Special Account (SA). 2.    If (1) is insufficient to set aside the FRS in full, funds in the Ordinary Account (OA) will be transferred to the RA to make up the FRS. Excess of the FRS (if any) will remain in his OA/SA which he can withdraw at any time. B.  Grow Your SA Knowing how CPFB creates the...

For those above 55 years old, here is the last chance for you to withdraw your Medisave Account Savings above the current MMS (ie $43,500). You must submit your applications to the Board by Dec 15 2015. However, because CPF has a special method of refunding balances in MA/SA/OA, it will be better for you to first submit a request (email) to CPF to calculate the amount you need to withdraw such that your MA balance will be reduced to $43,500. Then send a formal request online or by post using the withdrawal form to request the withdrawal. CPF actually calculates interest on MA/SA/OA up to month of withdrawal, these will be refunded first, followed by other amounts. The formula is not disclosed at the website yet, oops, at least I cannot find, hahaha Oops, there is no formal announcement by CPF Board nor is above written on the website. However, some information are hidden in the withdrawal form, take a look at the form at the website.

Assumptions: A lower monthly payout is not a major concern for you. You have max Full Retirement Sum (FRS) in your Retirement Account (RA). You still have more than 60k in OA/SA/MA. With or without dependents. When the CPF Life scheme was first started and my brother was required to make a choice, I advised him to opt for higher monthly payout as his income was/is low. He only has one child and I told him he need not worry about bequest to him as he should know how to take care of himself. At that time, I did not study the scheme in detail, only comparing monthly payouts and bequest amounts. Now I study the plans in detail. Under The Standard Plan: 1.  If I do not have dependents and should I die early after joining CPF Life, I do not mind donating my money under the Standard Plan to fellow Singaporeans in the CPF Life Pool since my beneficiaries will get less or nothing in bequest monies. 2.  However, should I not die early but inst...