Focus on clients above or near 55
Dear valued clients and friends
In 2025, the CFP Special Accounts of members aged 55 and above will be closed and all monies there will be transferred to their OA which earns only 2.5%
If you are above Age 55 this year (2024):
And you have done the CPF SA Shielding earlier, no action is needed from you now.
Since you have already fulfilled the Full Retirement Sum, in 2025 all monies in your CPF SA will be transferred to your CPF OA and no money from your CPF SA will be transferred to your CPF RA.
Thereafter, if you decide to enhance your CPF RA up to $426K, you must top-up manually using cash or CPF OA.
If you are Age 54 this year (2024):
In 2025, you will not be able to do CPF Shielding because your CPFSA will be closed and the Full Retirement Sum of $213K will be transferred from your SA and the balance will be transferred to your CPFOA.
You can consider investing your excess fund in your CPFOA or use it to Enhance your CPF RA up to
$426K.
If you are Age 55 this year (before Sep 2024):
You can still proceed with CPF SA Shielding because you still will be able to enjoy the 4.08% in your CPF SA for 2024. In 2025, you can consider the below options on deploying your CPF SA effectively to meet your retirement needs.
Options to use your CPF for retirement after 2025 :
Option 1 :
To leave it in CPF OA to earn 2.5% interest for retirement.
Clients who choose this option do not like to take risk and would like the principal to be guaranteed with high liquidity. They also like to leave the principal for their spouse or children.
Alternative :
To invest in Insurance Retirement Plan to provide a stream of income for your retirement with guaranteed principal.
Monthly or yearly coupons payout are between 3.2% to 4% (of principal invested) and clients can cash put the guaranteed principal anytime from the policy year the coupons start paying put.
These policies can also be passed on to client's spouse or children when they passed on.
Option 2 :
Top-up CPF to get the Enhanced Retirement Sum.
Clients who take this option do not mind that the value of top-up will be zero when they pass on and nothing will be left behind for their spouse or children.
They also do not mind that the Top-up amount is illiquid.
Interest earned in CPF Life will go into the CPG Life pool.
After you pass away, your beneficiaries will receive your CPF LIFE premium balance, which is the total initial CPF LIFE premium that you have paid minus the total payouts you have received.
Alternative :
They can invest the $213K in our Dividend Portfolio or Phillip Next Gen Tech Portfolio (PNGT) for potentially higher dividends payouts or yearly profit withdrawals.
The Dividend Portfolio aim to provide about 6% to 7% per annum of dividends to our clients.
Phillip Next Gen Tech Portfolio aims to make about 6% to 9% of profit for withdrawal depending on yearly market conditions.
Principals are not guaranteed due to market fluctuations but are not likely to become zero.
Investors can also WILL these portfolios to their spouse or children after they pass on.
Please feel free to contact me if you have any questions or would like a discussion about how to optimize your CPF balances to meet your specific goals.
Best Regards,
Jason Tan | Mobile : 96369839| Private Portfolio Manager
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