Contribution to Parents CPF

[alamakazim]

btw guys

is the tax relief automatic , or must declare when income tax coming

 

[maumu]

it's automatic

anyway, for those who applied for top up by GIRO and had to print and mail the form:
1. do we need to print on single-side or double-side is OK?
2. do we need to fill up the apply-for-GIRO form (page 4)? it says for first time applying GIRO only. so for those of us who have GIRO transactions with CPF board before, don't need to fill up again right?

 

[SBC]

Can contact CPF via its email. They are very helpful.
Worst case, make a visit to its branch office.

 

[jjonghae]

I also deposited 7k to my mum's cpf RA account. she can only get it when she's 65, but that's in less than 10 yr's time. can follow this guide on how to topup: link here

 

[homer123]

Hi Henry, you seem to know the CPF stuff pretty well. I am pretty confused about this CPF thing for retired elderly. I was planning to help my mom who is 70 to put her saving into CPF. I was reading that there is RA account she can put her money and let her earned more than 4% and then I saw you guys talk about this payout thing. Do you know how this payout work?

The counter staff surely got a calculator but they are not giving to us when I ask for it

I asked for the max payout for my father based on a few different top-up amounts and the staff had to key in the amounts and left me know the answers.

Based on those few answers and the past payouts, I could roughly guess the payout on future top-ups as my father's payout started with 690 based on my first top-up, then to 1098 and now 1611. So if I were to top-up 30k anytime, I can make a calculated guess of the new payout

 

[homer123]

Thanks for the replies.. Do you know if the money put under the Minimum Sum Scheme can be withdrawn if my mom has any need for emergency?

Your mum shld be on Minimum Sum Scheme, which I feel is better option than CPF Life.

Similarly, the amounts topped up in her RA, she can apply to CPF to draw down montly & paid to her bank account.

perhaps dont put 300k in one pop ...

You can email CPF Board for details.

Or let others more knowledgeable advise u or correct me.

For her age, she can have OA, SA, MA and RA.

No way can she put 300k into any of the accounts. There is an annual limit for voluntary contributions (37k plus) to OA, SA and MA as well a current cap on topping up ($240k plus) to RA.

 

[homer123]

With recent top up to my father's RA, his monthly payout increased from 1,068 to 1,611

I may top up some more just to earn the min interest of 4% next year and request for even high payout.

what does this RSS and RST means on the statement?

 

[oceanicmanta]

Thanks for the replies.. Do you know if the money put under the Minimum Sum Scheme can be withdrawn if my mom has any need for emergency?

someone here said before ... CPF is not a bank, cannot suka suka OTOT withdraw.

maybe u shld pose the question to CPF Board, under what circumstances can RA monies be withdrawn.

 

[henrylbh]

Thanks for the replies.. Do you know if the money put under the Minimum Sum Scheme can be withdrawn if my mom has any need for emergency?

As mentioned, she can choose a or b or both -

a. make voluntary contribution which will go OA, SA and MA according to her age group (annual limit $37k) and
b. make top-up to her RA (current limit $241k).

Money that goes in RA certainly cannot be withdrawn except by fixed monthly instalments from the month that she request for monthly payout. Amount of payout would depend on the amount in RA and ends when she is about 82 yo assuming she sticks to the min sum scheme.

I am not sure, for her case, whether voluntary contributions that go into OA, SA and MA can be withdrawn. But certainly money that goes in MA cannot be withdrawn as she likes.

I guess OA and SA can be withdrawn as she has passed 55 when min sum was determined and the new rule states that one need not make good the min sum when one decides to withdraw OA and SA.

 

[henrylbh]

someone here said before ... CPF is not a bank, cannot suka suka OTOT withdraw.

maybe u shld pose the question to CPF Board, under what circumstances can RA monies be withdrawn.

CPF is indeed a bank for those above 55, only that many are ignorant or don't trust it.

For those who passed 55 and have met the min sum, they can deposit (by way of voluntary contributions subject to annual limit) and withdraw the money anytime from CPF, except for amount that goes into MA. If MA hits the limit, all contribution will go into OA and SA only.

 

[cscs3]

CPF is indeed a bank for those above 55, only that many are ignorant or don't trust it.

For those who passed 55 and have met the min sum, they can deposit (by way of voluntary contributions subject to annual limit) and withdraw the money anytime from CPF, except for amount that goes into MA. If MA hits the limit, all contribution will go into OA and SA only.

Right on the dot. Also the top up is win win situation. You get high interest rate and also tax rebate. Also take note this contribution may some from you own money but not necessary from your own name. Eg. Your family can top up for you. You get the interest and your family member get the income tax rebate.

 

[Anarchy]

VC has no tax rebate and total VC has a ceiling of $37.7K inclusive of mandatory contribution if one is still working after 55.

 

[elnewbie]

Minimum sum topups will only be paid out as cpf life annuity payments. Cant withdraw in lump sum.

Right on the dot. Also the top up is win win situation. You get high interest rate and also tax rebate. Also take note this contribution may some from you own money but not necessary from your own name. Eg. Your family can top up for you. You get the interest and your family member get the income tax rebate.

 

[leo_llw]

You understand as 3 versions and they told you so? As far as I know, there is only one MSS but several ways to apply or administer it according to many complicating or confusing rules and not all are known to the public.

I believe the officer may be referring to 3 levels of Minimum Sum (Basic, Full and Enhanced). The Basic tier is only eligible if you are willing to pledge your property to offset half the Minimum Sum.

 

[cscs3]

Minimum sum topups will only be paid out as cpf life annuity payments. Cant withdraw in lump sum.

I think if already meet min sum or plus interest meet min sum. The exceeded amount to automatically transferred to OA.

 

[BBCWatcher]

Minimum sum topups will only be paid out as cpf life annuity payments. Cant withdraw in lump sum.

There are exceptions:

(a) Former citizens and former Permanent Residents can withdraw;
(b) Those who have other, qualified annuity streams can opt-out;
(c) You can transfer funds above the Basic Retirement Sum to a spouse (for example), even funds you topped up. Then your spouse may be eligible to withdraw in a lump sum. For example, you start with the BRS then top up another $20,000 (including $7,000 of income exclusion for tax relief). You then get married to a non-working spouse with $0 in his Special Account, and you transfer $15,000 to him. His SA grows but doesn't hit the minimum CPF LIFE level. He then can eventually withdraw the $15,000 plus interest.

Also, if you merely do nothing your CPF LIFE annuity payout doesn't start. If you then die (as we all do, eventually), your heirs get a lump sum payout. The longer you wait (and live), the bigger the payout to heirs.

I think if already meet min sum or plus interest meet min sum. The exceeded amount to automatically transferred to OA.

No, the Special Account continues to grow with compulsory contributions and interest. Hypothetically, a generous benefactor (such as a wealthy parent or grandparent) could contribute $161,000 in one shot to a newborn's Special Account, about 20 years later that individual could start his/her working career and max out the compulsory contributions for a few decades, and all of that would accumulate compounded interest. The Special Account would then end up with well into seven figures. The whole SA gets rolled over to the Retirement Account at age 55, as far as I know. And compulsory contributions continue into the RA if the individual is still working in Singapore.

 

[BBCWatcher]

VC has no tax rebate and total VC has a ceiling of $37.7K inclusive of mandatory contribution if one is still working after 55.

Please note the Retirement Sum Topping Up Scheme does not count toward the CPF Annual Limit (currently $37,740). There is up to $14,000 of income exclusion (tax benefit) available for RSTU contributions, up to $7,000 per person.

 

[BBCWatcher]

CPF is indeed a bank for those above 55, only that many are ignorant or don't trust it.

For those at or above 55 who fit a certain CPF account balance profile, absolutely.

As one simple example, if your (or a dependent's) Medishield account balance is zero, you might as well contribute to Medisave if you can, at least to cover a few years of MediShield Life premiums. You're going to have to pay those premiums (taxes) anyway, assuming you don't qualify for an exemption, so you might as well get some interest along the way.

I would argue that CPF is very bank-like also for under 55s who are already "loosely attached" PRs or citizens. That's because they could tap those funds at any time if they terminate PR or citizenship, as applicable.

 

[BBCWatcher]

You get the interest and your family member get the income tax rebate.

Yes, but some tax relief conditions apply, notably that the recipient cannot have too much income. But if, for example, you're taking time off for a pregnancy and raising a child, that year (or years) would be a great time for a qualified relative who wants to help you out anyway to make that tax-advantaged contribution to your CPF account.

 

[LiteHouse]

There are exceptions:

(a) Former citizens and former Permanent Residents can withdraw;
(b) Those who have other, qualified annuity streams can opt-out;
(c) You can transfer funds above the Basic Retirement Sum to a spouse (for example), even funds you topped up. Then your spouse may be eligible to withdraw in a lump sum. For example, you start with the BRS then top up another $20,000 (including $7,000 of income exclusion for tax relief). You then get married to a non-working spouse with $0 in his Special Account, and you transfer $15,000 to him. His SA grows but doesn't hit the minimum CPF LIFE level. He then can eventually withdraw the $15,000 plus interest.

Also, if you merely do nothing your CPF LIFE annuity payout doesn't start. If you then die (as we all do, eventually), your heirs get a lump sum payout. The longer you wait (and live), the bigger the payout to heirs.


No, the Special Account continues to grow with compulsory contributions and interest. Hypothetically, a generous benefactor (such as a wealthy parent or grandparent) could contribute $161,000 in one shot to a newborn's Special Account, about 20 years later that individual could start his/her working career and max out the compulsory contributions for a few decades, and all of that would accumulate compounded interest. The Special Account would then end up with well into seven figures. The whole SA gets rolled over to the Retirement Account at age 55, as far as I know. And compulsory contributions continue into the RA if the individual is still working in Singapore.

BBCWatcher, those kids who have received a headstart with a $161k topup to their SA. They are destined to have AT LEAST $1.49 million dollars by 55 years old (assuming they remain jobless with no further CPF contributions from 1 year old to 55 years old and the bonus CPF interest rate of 1% to first $40k in SA).

Seems grossly unfair to the average adults who have to work hard for their retirement.