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...

If you can spot the suggested solution already detailed in my prior article here this morning, then all the upcoming changes on Feb 1 2020 will not affect you. Yes, all these changes will be transparent to you if you implement this solution before 15 Feb 2020. What is the suggested solution again? Simply start a Regular Savings Plan (RSP) of $100 per month before Feb 15 2020 to qualify for the Investment Category from Feb 2020 onwards, valid for 12 months. What is RSP? You can read  all about RSP here at DBSwebsite. I provide a summary below: Objective of RSP: The primary purpose/objective of this RSP is just to help you earn bonus interest on the Multiplier Account. It is not meant to be an investment of monies for long term gain. You can either invest in ETFs or Unit Trusts. Read the link above for the 4 ETFs and the  list of Unit Trusts  eligible for RSP. Because my objective is just to earn interest, I will have to ch...

A quick overview of the major changes to the DBS Multiplier Account terms and conditions effective Feb 1 2020 (Just announced at DBS website today): The GOOD If u dun qualify for salary credit in the past, u can now qualify with dividend credit from CDP. A new “category” called INCOME is created. This comprises either (1) salary credit or (2) dividend credit from CDP ( see note A below ). This INCOME “category” replaces the current salary credit “category”. So those without salary credit can now qualify for multiplier bonus interest with dividend credit from CDP ( see note A below ). Those who have built SSB ladder to generate mthly dividend credit fall under this “category”. DBS listens to your feedback! Your difficulty in meeting the salary credit requirements, mostly not within your control, have been resolved. Many companies might switch from giro to more cost efficient payment or transfer methods in the future, so this is a pos...

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 ...