Top up 7 k annually to special account to get tax rebate and compound at 4 % interest viable?

SBC

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Can explore SRS too to save on taxation.

I am tax-free till at least 12 years later, due to Parenthood Tax Relief.
Has too many kids. Haha.
 

henrylbh

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There is no certainty that the rate of 4% on SA, MA and RA will remain. Depends on annual announcement by CPF.

If they follow the set rules, the rate should be lower than 4%.
 

OngHuatHuat

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I think if they reduce it, it will bring undesirable political consequence. So most likely they will make it remain at this level. :)

There is no certainty that the rate of 4% on SA, MA and RA will remain. Depends on annual announcement by CPF.

If they follow the set rules, the rate should be lower than 4%.
 

OngHuatHuat

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Wa, good.
For me, i need to crack my head to get relief next year Coz this year I need to declare rental income for my room rental.

Can explore SRS too to save on taxation.

I am tax-free till at least 12 years later, due to Parenthood Tax Relief.
Has too many kids. Haha.
 

expert128sg

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There is no certainty that the rate of 4% on SA, MA and RA will remain. Depends on annual announcement by CPF.

If they follow the set rules, the rate should be lower than 4%.

at least my savings had worked hard for that few years liao..
 

henrylbh

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I have topping up to parent RA every year. Started to draw down $400 plus per month. Still having over 35k.

With 6% interest, every interest is more than 2k.

This old scheme is no longer available. More good years ahead.

See what I top up for my parent without getting any personal tax relief.

With the lastest top-up, his monthly drawdown increased to $1,611 :s13:


CPF%20-%20my%20statement%20on%20top-ups_zpspxu65xjk.jpg


He is getting 6% on first 30k, 5% on next 30k and balance at 4%. :s13:
 

awful999

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So actually open SRS better or just top up 7k better ? and top up 7K is for your example or TS have any calculation formula ?
 

highsulphur

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So actually open SRS better or just top up 7k better ? and top up 7K is for your example or TS have any calculation formula ?

If your tax bracket is high enough, then why not use both?

If it's not that high, then perhaps I would go for cpf first before SRS.
 

henrylbh

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So actually open SRS better or just top up 7k better ? and top up 7K is for your example or TS have any calculation formula ?

If you have just enough for either one, go for top-up and you don't have to think how to invest your SRS.
 

OngHuatHuat

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Srs if you take out within a few years, still need to pay tax. Sometimes after you sell, you don have any good idea, you cannot move it to a high yield account as well.

Top up 7 k Coz this is the maximum allowable for personal tax relief, and this 7 k will be in the highest tax bracket for individual so the savings cna be quite significant.

Anything you want to know about my formula?
The 10000 figure is derived using this formula:
600(extra 1 % on first 60k) + 4800(medisave liability which cannot be avoided) - 2400 (personal + parents medical insurance) + 7000( maximum allowable income tax relief) = 10000

So actually open SRS better or just top up 7k better ? and top up 7K is for your example or TS have any calculation formula ?
 

SBC

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V impressed with Henry planning. Effect is like early drawn down from his CPF Life.

Possible only for guys with high net worth.
If I had remembered correctly, you did not vest with second property.

See what I top up for my parent without getting any personal tax relief.

With the lastest top-up, his monthly drawdown increased to $1,611 :s13:


CPF%20-%20my%20statement%20on%20top-ups_zpspxu65xjk.jpg


He is getting 6% on first 30k, 5% on next 30k and balance at 4%. :s13:
 

awful999

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Thanks TS and all for the explanation :s12:

oh sorry one more question, if I top up 7k to my wife CPF, does it have tax relief for me ? my wife is not working.
 
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expert128sg

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If your tax bracket is high enough, then why not use both?

If it's not that high, then perhaps I would go for cpf first before SRS.

same...always do cpf top up first..

higher interest and no need pay tax..

downside is govt controlled
 

zumaba

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but once your SA has more than minimum sum, then can't topup anymore, right?
 

dork32

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remember your sa will one day become cpf life. i dont like cpf life.
 

henrylbh

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Those who like CPF Life must be either a dumb or has long life.
 
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