CPF SA Shielding before RA is formed at age 55

You may have heard of the CPF SA shielding trick or SA shielding hack, something that a person nearing Age 55 may do. But what is this SA shielding that everyone is talking about?

Your CPF is generally a comprehensive social security savings plan whose main aim is to inculcate forced savings in working Singaporeans and set aside funds for their retirement years. Contributions by both employee and employer are allocated to his Ordinary Account (OA), Special Account (SA) and MediSave Account (MA).

Upon reaching Age 55, your Retirement Account (RA) is created with monies from your SA account, then OA account in that order of priority. The prevailing interest rate on your OA, SA, MA and RA are 2.5%, 4%, 4% and 4% respectively.

As SA and RA have the same interest rate at 4%, it is better for your RA to be made up of monies mostly from your OA (which is a lower interest bearing account), instead of SA (which earns 1.5% more). This is where the SA shield is put up or SA shielding trick comes into the picture, which is to block off use of the SA monies first to make up the new RA account.

The SA shielding trick involves the purchase of low-risk investment instrument prior to just age 55 (before RA account formed) and to liquidate it after turning age 55 or your 55th birthday (after RA account formed). You are therefore looking for one that is short tenor and capital guaranteed.

Under the CPF Investment Scheme (CPFIS), the first $20,000 and $40,000 from your OA and SA cannot be used for investment. This means that the first $40,000 of your SA monies cannot be shield with the SA shielding trick. Also, for any investment made with funds from your CPF OA or SA accounts, any gains, dividends or interests earned in your investments will be returned to your respective CPF OA or SA accounts. Monies from the investment after liquidation will flow back to the SA which continues to be a high interest bearing account of 4%.

What can you invest in using your CPF savings from SA?

TypeRemarks
Unit Trusts (UTs)Capital not guaranteed
Investment-linked insurance products (ILPs)Capital not guaranteed
AnnuitiesLump sum payment at the start for regular disbursements in the future
Endowment10 to 25 years tenor
Singapore Government Securities (SGS) Bonds2, 5, 10, 15, 20 or 30 years tenor
Treasury Bills (T-bills)6 months or 1 year tenor

From the above, the choice of using UTs, ILPs, annuities and endowment are out as they defeats the purpose of SA shielding. The main aim is to temporarily block off use of as much SA monies as possible in setting up the RA account, and for it to continue earning the higher interest-bearing of 4% (instead of 2.5% in OA) once liquidated. Capital therefore have to been protected and tenor as short as possible.

While SGS bonds also have a short tenor of 2 years, T-bills are more preferred due to the 6 months and 1 year shortest tenor.

It is important to reiterate here, the initiation of SA shielding must take place BEFORE your 55th birthday and bringing down or removal of SA shielding AFTER your 55th birthday. There is no point buying 6-months T-bills in your early 54th year if it matures before you turn 55. SA shield has failed!

SGS Bonds and T-bills are issued according to the MAS issuance calendar published around October the year before. My advice, look at the issuance calendar and do not wait till the last minute to put up your SA shield. Time does not turn back should you miss it. You have to see which dates are most appropriate for you depending on when is your 55th birthday.

How to purchase SGS Bonds and T-bills with CPFIS OA or SA monies? If you want to use funds from your CPFIS account to buy SGS or T-bills, you need to apply in person at your agent bank’s main branch.

In short, the following diagram shows what happens before and after SA shielding.

From 54th to exactly 55th birthdate

After 55th birthdate

This guide will be useful for those people who wish to carry out CPF SA shielding trick or SA shielding hack when they are nearing Age 55.

77 thoughts on “CPF SA Shielding before RA is formed at age 55

    1. Transferring monies from OA to SA does not change the order in which RA is formed. It is still monies taken from SA first then OA. The main purpose is to block the usage of SA monies to be used for forming the RA and for it to continue earning higher interest rates of 4% as compared to OA 2.5%.

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      1. Yea, why cant i xfer all my money from OA to SA?

        Scenario 1: before 55.
        $0 OA, $400,000 SA, $0 RA.

        Scenario 2: after 55.
        $0 OA, $208,000 SA, $192,000 RA (Full Retirement Sum @ year 2020)

        My SA will still enjoy 4% interest aint it?

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      2. Firstly, for the simple reason is that you cannot transfer ALL your monies from OA to SA.

        Scenario 1: before 55 (FRS for 2020 is $181,000)
        Therefore, the max you can transfer is
        $219,000 OA, $181,000 SA, $0 RA

        Scenario 2: after 55
        Without shielding, it would be
        $219,000 OA, $0 SA, $181,000 RA

        With shielding, it would be
        $38,000 OA, $181,000 SA, $181,000 RA

        RA account is formed first with monies from the higher interest-bearing SA before lower interest-bearing OA. Your SA monies will be attempted to be wiped out first, we do not have a choice or say.

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    1. OA and SA monies will be transferred to RA on 55th birthday to form Full Retirement Sum (FRS) amount first. The rest from SA/OA can be withdrawn in cash any point in time after which.

      Basic Retirement Sum (BRS) if property is pledged.

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  1. Ahhhh always talk about OA an SA, most of us dont have much in the OA after paid for housing only limited people with high pay have it. So not suitable for most of us.

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    1. Personally, I didn’t choose to wipe out my OA for housing because interest rate was 1.18% at that time. Even now, my interest rate is 1.98%, therefore putting the OA to better use.

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      1. A big difference in using OA to pay off housing payment vs using bank loan is that the interest accrued in your OA will go back to your OA when you sell off the property. Whatever interest payment incurred in the bank loan goes to bank and ‘lost’ forever.

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      2. One assumption you may have to exert is that when you sell your property, the price sold is more than the loan plus accrued interest. If not, you have to top up the difference in cash to your CPF account.

        Secondly, I treat my OA monies as my very own monies, thus I would rather let it compound it at 2.5% (IF I still have it in OA) and borrow from the bank at current 1.98%. The thing now is that I had consistently done OA to SA transfer on a monthly basis. There is zero dollar lying in my OA and every dollar is in my SA account compounding at 4% per annum.

        4% earned interest versus 1.98% loan.

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    1. Assuming RA is formed with FRS amount or BRS with property pledges, the excess in the SA is now residing in a higher interest-bearing account (4% p.a.) which can be withdrawn any time after age 55.

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      1. Yes while both SA and RA accounts have the same interest rates, they defer on the following aspect.

        RA monies will be used to pay for your CPF LIFE annuity premiums for your monthly LIFE payouts for the rest of your life. For Standard and Escalating plans, ALL of your RA monies is spent to purchase the CPF LIFE annuity. Any interest earned thereafter goes into the Lifelong fund pooled together with all the other CPF members who are on this annuity scheme. In short the interests do not belong to you but the pool.

        SA monies and interests earned stays in your SA account. You can withdraw monies from your SA account any time after age 55 as long as you have fulfilled the FRS requirement or BRS with property pledge requirement.

        Would it be clearer?

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  2. Will this be workable – move SA funds to UT one month prior to 55 and then thereafter move it back to SA a month or more after RA has been set up. Understand that there could be a ‘loss’ but my thoughts is that any ‘loss’ would most likely be covered by the higher interest rate. It will be better than having RA ‘wipe off’ and leaving most of the monies in OA and earning 1.5% less of interest.

    Your expert advise…

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    1. Some people prefer the fastest time (more liquid), others the lowest cost. There is no downside to T-bills or SGS Bonds when held to maturity. UTs may face downside during the period of holding, so potential losses plus management / admin fees have to be accounted for as well. The market is uncertain and we can only guess.

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    1. For retail investors, Individual investors can approach DBS, OCBC and UOB respectively at these 3 branches,

      DBS: 12 Marina Boulevard Level 3
      UOB: 80 Raffles Place
      OCBC: 65 Chulia Street

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  3. Hi, my question is, exactly how much of our SA AND OA can we set aside for shielding after the minimum $40k and $20k? Is there any rules CPF impose? Do we need the balance to meet FRS or BRS requirement? If never meet can CPF take the monies after liquidation of investments after 55 to make up for the shortfall in RA? Thanks in advance.

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    1. There is no limit to how much OA you want to shield. There is a upper limit for SA, which is the prevailing FRS amount or max amount you may have in your SA before 55 minus $40,000. However do note, the point of doing SA shielding is so that money shielded in SA remains in a higher interest bearing account which can be drawn down anytime. You can only draw down (in cash) if you actually meet FRS or BRS with property pledge in your RA. Meaning only excess above FRS or BRS can be drawn out. If this is not met, monies in SA cannot be drawn out at all, meaning “stuck”.

      Automatic creation of RA, and drawing from SA/OA accounts to make up your RA is ONLY done once at age 55. Any other transfers after 55 or creation of RA has to be initiated by members aka manual transfer. Hope it answers.

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      1. Assuming i initiated the SA shielding successfully. So at 55 years old, my OA will be drawn down to form RA.

        However if OA is not enough to achieve FRS, and i have no property available to pledge for BRS, will CPF board wait for my investment in SA to mature then top up to FRS?

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      2. The automatic transfer from SA/OA to RA only takes place once in your life – at age 55. Any other transfers that happen after which can only initiated by yourself or manual initiation.

        I have to add on, there is no point shielding SA if you do not have enough to make up RA to FRS or at least BRS with property pledge. Only excess above FRS or BRS in your RA, can it be withdrawn from your SA/OA. In other words, without this minimum sum in your RA, the monies in your SA are non-withdrawable.

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      3. So RA has to meet FRS in order for me to withdraw any sum up to the full sum of SA from 55 onwards.

        If not SA money will be stuck in SA?! That would be a nightmare…

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      4. Yes correct, only excess above FRS or BRS in your RA can be withdrawn from your SA/OA. In other words, without this minimum sum in your RA, the monies in your SA are non-withdrawable.

        However upon liquidation of your SA/OA investments, as long as you are able to manually initiate a transfer the difference in amount from SA/OA to RA to hit FRS or BRS, you will be able to withdraw the excess monies in your SA/OA.

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  4. Can’t you just let CPF take the money from the SA account to top up the RA account at 55 and then do a manual transfer of funds from the OA account to SA account if you wish to?

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  5. Two questions:

    (1) Is it possible to shield BOTH my CPF OA (after setting aside the minimum $20K) and SA (after setting aside the minimum $40K), and top up my RA using CASH? E.g. if FRS is $181K in 2020 when I am due to reach 55, I can shield both my OA and SA and top up to FRS using $181K – $60K = $141K in cash?

    (2) How do I go about buying T-bills using my CPF OA and SA? From what I read, these are the following steps?

    a. Open CPFIS account with DBS, OCBC or UOB.
    b. Proceed to main branch of bank where you open CPFIS account to purchase T-bills?

    Is it really so simple? Anything else I need to take note of?

    Thanks!

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    1. Sorry, I meant top up $181K – $60K = $121K in cash. To explain, if I have excess cash, then I would prefer to use cash to meet my FRS rather than my OA or SA right, since cash in FD earns a lower rate? Any loopholes in my thinking? Thanks again.

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      1. Yes, you can shield both OA and SA all the way up to (amount minus $60K) or in your example $121K. The creation of RA by drawing from SA, then OA takes place automatically only once when you age 55.

        For retail investors, Individual investors can approach DBS, OCBC and UOB respectively at these 3 branches for using CPFIS,

        DBS: 12 Marina Boulevard Level 3
        UOB: 80 Raffles Place
        OCBC: 65 Chulia Street

        The other thing to take note of is that there are staff who are unsure of how to proceed with CPFIS funds. Be patient or request for a more experienced one who knows what he or she is doing.

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      2. Thanks! I was wondering why everyone only spoke about shielding the SA (and use OA funds to meet FRS) and not both SA and OA (and use cash instead to meet FRS – or for that matter, to meet both FRS and ERS for those who have the excess cash). I assume we can only do the cash top-up after RA is created.

        I reread Lorna’s article – she had invested in Nikko Shenton Short Term Bond Fund using FSMone. Sounds like quite a stable fund to park my OA/SA monies in perhaps 2 weeks before turning 55, and then quickly returning funds back to CPF after RA created and I have topped up to FRS/ERS using cash. 6 months for T-bills sounds a bit too long for me personally.

        Lastly, besides creating my CPFIS account, do I need to create a CDP account to invest my OA funds in T-bills or the Nikko fund? Thanks again for your useful comments and blog!

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      3. With cash, there is a higher probability to beat OA 2.5%. It is harder to find a low risk yet higher than 4% interest that the SA has. This is perhaps why people shield SA instead of OA.

        You need a CDP if you are investing your OA funds. Not required if you are using SA funds for investment.

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  6. Hi, Would SA shielding work if prior to 55 years old, my SA account is above BRS/FRS? For example if I have $220k in SA, $200k in OA, how should I do the shielding for max benefit? Thanks for your kind assistance.

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    1. What you probably mean is that you wish for your RA to be composed of monies primarily from your CPF OA. The purchase of low-risk investment instrument which is short tenor and capital guaranteed prior to just age 55 still applies. That means that if you were to shield ALL of your SA monies (save the first $40k), you would have to look at purchasing $180K of short term, low-risk investment instrument.

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      1. After purchasing the $180K short term, low-risk investment instrument,
        how soon after the 55years birthday (or formation of RA), then can sell
        and return the money to SA account?

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      2. I would probably leave a good leeway before and after your 55th birthday. Practically, your RA is formed exactly on your birthdate itself. So it is at least one day before your 55th birthday to put up the shield, and at least one day after your 55th birthday to put down your shield.

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    1. Firstly for the whole concept to actually work, one need to have FRS amount in their RA account or BRS with property pledge. The whole idea is for SA to serve as a higher-interest bearing account. Thus, the bulk the forming of RA should come from OA. OA to SA transfer should happen all the way till FRS level in SA. In this case, all except $40k will come from OA. You still need to shield the rest of the monies inside SA.

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      1. I read that you transfer $ from OA to SA. I assume you also transfer from OA to MA.

        Interested to know why you didn’t use cash to topup SA and MA since it is tax deductible……

        One thing I noted: cash topup to SA/OA (and its associated interest earned) will be excluded in the calculation of BRS and FRS for withdrawal purposes at Age 55

        Thanks in advance

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      2. We can’t transfer from OA to MA. I do cash top up to both my SA and MA, though a nominal sum each month.

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  7. Just wondering for cohort in year 2021, where FRS is $191k.

    If I leave $20k in OA (take out everything and throw into unit trust or shared and then after 55 years old, sell it and bring it back to CPF. And $60k in SA per requirement (throw everything into T Bills and then after 55 years, return it back to SA) , ultimately, cpf will have $80k minimum to transfer to my SA. If I pledge 50% of my hdb, then what it would mean is the difference between $80k versus 50% FRS of Of $191k or $95.5. Effectively I could only shield $95.5k – $80k = $15.5k only. Am I correct?

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    1. Let’s take it a step at a time.

      The minimum amount, beyond which that you can use to invest your OA is $20,000 and SA is $40,000.

      To form your RA, it aims to first wipe out your money in your SA first, before wiping out your OA in the attempt to form your FRS amount ($191,000 in your example). When you pledge your property, it means you are trying to form BRS amount. ($95,500 in your example).

      The shielding of OA is irrelevant in the first place. You are trying to shield primarily your SA, such that your FRS amount in your RA is made up of monies mostly from your OA. You will minimally be able to shield the amount above the first $40,000. For SA to serve as a higher yield savings account able to be withdrawn at any time, you first must be able to meet FRS amount in the SA. That is the whole objective of shielding and playing the game right.

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  8. After 55years old and after the RA had been formed,
    when is the soonest time to sell the short term, low-risk investment instrument to complete the shielding,.
    example: there is a 7 days cooling time when buying UT, can we buy a few days before 55 and activate
    the cooling a few days after 55 to return the money back to SA?

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    1. The investment instrument has to be in your name prime and proper to be considered a shield.

      While MAS guidelines do state that you can change your mind about your fund purchase within 7 calendar days, there is no administrative penalty for cancelling but you may suffer a loss if the fund has fallen in market value after you bought it. If the market value of the fund has risen, you will get a full refund of what you paid for the fund, but you will not be entitled to the gain. In either case, the sales charge will be refunded to you.

      Do note that the right to cancel is not available if:
      You are making additional investments in a fund that you already own
      You purchased a recognised fund or a fund that is listed on the Singapore Exchange

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  9. Hi, I have been following seedly’s guides on how to create a nice cpf account.. very grateful to all of you. Here is what I have done to my CPF: OA 5k, SA 120k MA 36k. As I will be 55 in Oct 2021, I am thinking of cash tops of 100k (SA Sheidling purpose) but hesitated after reading that cash topup to SA/OA and its associated interest earned will be excluded for withdrawal purposes at Age 55. Which cpf account should I do cash topup so that I can withdraw after 55?

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    1. Monies left in the SA and OA can be withdrawn only after upon reaching FRS in the RA, which in your case would not matter which account you are putting in the 100K, as i presum that the 120K currently in SA are not topped up monies but employment contribution monies.

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      1. I had transferred all OA to SA (bal 5k), did a cash topup of 20k to SA and 10k to MA. I have a HDB to pledge too. I appreciate your advice. thanks

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      2. If I were in your shoes, I would still do an outright top-up of SA. But as different individual circumstances may differ, depending on what our CPF balances are currently being used e.g. housing loan, CPFIS, children education etc, it is still better to confirm physically with staff at the CPF service centre as it would also involve a dedicated taking into account the monies that you have topped up in cash yourself versus those transferred from OA and employer/employee contribution.

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    2. In jazz’s example of “CPF: OA 5k, SA 120k MA 36k. As I will be 55 in Oct 2021, I am thinking of cash tops of 100k”.

      Does it work if he shields 80k in his SA with some safe instrument just before age 55?

      Then at age 55, cpf creates his RA with 5k from his OA and 40k from his SA, resulting in RA of 45k.

      Assuming his FRS is 191k, and he is pledging property, his BRS will be 95.5k. Then he just need to topup the difference of 95.5k – 45k =50.5k in cash to his RA to meet BRS with property pledge.

      Then after turning 55,he can sell the instrument in his SA shield and enjoy the 80k in his SA earning 4% and freely withdraw from SA.

      Is my understanding correct?

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  10. Thanks for this informative site; it is very useful. I have some questions :
    1) can I simply call CPF and transfer all my OA amounts to SA ? Is there an upper limit that once SA is reached, no more transfer from OA is allowed? if this is possible, then there is no need to do SA shielding right? and all remaining amount left in my SA (my OA is zero by then) will earn 4% (I turn 55 this july and have enough in my current OA to cover FRS).
    2) we can only decide BRS/FRS/ERS only once ? can i pledge my HDB to any of these, and change my mind of the tier later ?

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    1. It is actually end-June now, so I hope that I am in time to answer your queries.
      1) OA to SA transfer can actually be done online (website) or CPF mobile app. The upper limit or FRS amount is $181,000 this year 2020, and no further transfer is allowed beyond that. When you reach 55 on your birthday, your RA is formed first from monies in your SA (4%), then OA (2.5%). Thus, one would want to do SA shielding so that RA is formed primarily from monies in the OA first. This means SA monies is ‘protected’.
      2) As long as your CPF LIFE monthly payout has not begun, you can still change your mind any time with notice to CPF.

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  11. Assuming I have reached 55 years old and they have proposed that my RA will be on FRS is 181k,
    Can I still change it to BRS by pledging my property ?

    What will happen to the 90.5k. Will CPF return to me in cash or will the money be credited back to SA or OA?

    Can I request them to put the returned money to my SA account ? Thanks

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    1. Even after your RA is formed at age 55 on your birthday, for example if it fulfills FRS amount, you may still change your mind anytime e.g. BRS or even ERS as long as your CPF LIFE monthly payouts have not begin yet. By pledging your property at BRS, this means that you can draw out 90.5K in cash from your CPF RA account. It does not credit back to OA or SA.

      In fact once RA is created, there is no way to put money into SA, whether it is voluntary top up by cash or OA to SA transfer.

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  12. Can I change the RA from FRS to BRS after 55 years old by pledging my property?

    Will CPF return my 90.5 k ?(assuming the FRS is $181k)

    Is the money returned to me in Cash? Or can I request CPF to put the money into my SA account instead?

    For your advice, Thanks

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  13. My 55th BD is Dec this year. If I buy T bills in July (6-mth maturity) with SA leaving just 40K behind, can I then transfer 141K from OA to SA (up to FRS limit $181K), then buy another 141K T bills with SA, top up SA with OA again to 181K….same cycles before Dec until my OA is left with just 20K and SA with 181K for FRS. When all my T bills (bought with SA) mature after Dec, they’ll all go back to SA to earn the higher interest until a time when I want to draw out in cash. Does CPF allow that? Is it legal? Tks.

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    1. You can only transfer up to the prevailing Full Retirement Sum (FRS = $181,000 for year 2020), minus any SA monies you have utilized for investing under CPFIS. So the cycle of transferring from OA to SA will not work out.

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  14. Hi, can I just check, what would happen if I were to use my CPF SA for shielding and my amount is still held up in an investment upon reaching age 55 which causes my RA to not be able to hit the BRS/FRS?? Thank you

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    1. The current BRS amount is $90,500. If ​you turned 55 on 1 May 2016 and after, you will still be placed on CPF LIFE if you have at least $60,000 in your Retirement Account (RA) six months before you reach your payout eligibility age. You can apply to join anytime between your payout eligibility age and before you turn 80 years old.

      Otherwise, you will just remain on the old Retirement Sum Scheme (RSS).

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  15. Just wondering, since we can withdraw from OA and SA freely after setting aside the FRS in RA, is there still a need to do this shielding if we intend to just withdraw the entire balance from OA and SA after setting aside the FRS in the RA? This shielding method is only for those who wish to keep the balance in their SA to earn the 4% interest after setting aside the FRS, right?

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    1. If the main intention is just to withdraw the entire balance from your OA and SA after FRS amount in RA, yes you are right, then shielding would not apply to you.

      This method is more (like what you have mentioned) for people who wants to keep the higher bulk of their OA/SA monies inside the SA instead for the higher interest of 4%.

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  16. Is it allowed to combine your shielding trick with property pledge in Five steps in following sequence (a) Before 55, trigger SA and OA shield, leaving min balance required to meet BRS (b) At 55, pledge property to create RA with BRS only- and not FRS (c) On 55 yr + 1 day, top up RA using Retirement Sum Topping up Scheme up to ERS with Cash (not OA or SA transfer as they are shielded) (d) Cancel the property pledge (e) finally, liquidate and transfer back investment to OA & SA.

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    1. Good question! Let’s break this up point by point. For the sake of the discussion, let’s also use 2020 FRS of $181,000

      (a) Before 55, trigger SA and OA shield, leaving min balance required to meet BRS
      I believe what you mean is that you will hypothetically leave $90,500 unshielded monies from OA/SA behind so that RA account is created with $90,500 inside aka BRS level.

      (b) At 55, pledge property to create RA with BRS only- and not FRS
      Actually, if you treat FRS and BRS as technical terms, you could have also shielded the maximum from your OA/SA e.g. only monies in excess of $20,000 in your Ordinary Account (OA) and $40,000 in your Special Account (SA) can be invested or shielded. Thus, you could technically have an RA account with $60,000 only.
      There is no need to do a property pledge, in fact you will also be unable to. The logic of doing a property pledge is to withdraw the amount in excess of your BRS (with accrued interest) level from your RA.

      (c) On 55 yr + 1 day, top up RA using Retirement Sum Topping up Scheme up to ERS with Cash (not OA or SA transfer as they are shielded)
      Thus following the discussion from above, you could just top up to ERS from $90,500 or even $60,000 if you so wish to.

      (d) Cancel the property pledge
      No need for property pledge

      (e) finally, liquidate and transfer back investment to OA & SA.
      Final step of the shield.

      Like

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